UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 10)*
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)
January 23, 1997
-----------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]**. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d- 1(a) for other parties to whom copies are to be
sent.
Continued on following page(s)
Page 1 of 81 Pages
Exhibit Index: Page 21
- -----------------
* Initial filing with respect to Winston Partners, L.P. and Chatterjee
Fund Management, L.P.
** A filing fee is not being paid with this statement pursuant to SEC
Release No. 33-7331 whereby the filing fee has been eliminated for
Schedule 13D.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 2 of 81 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 11,090,449
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 11,090,449
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
11,090,449/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
15.47%/1/
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 3 of 81 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 11,090,449
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 11,090,449
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
11,090,449/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
15.47%/1/
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 4 of 81 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WINSTON PARTNERS, 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 170,000
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 170,000
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
170,000/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
.28%/1/
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 5 of 81 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CHATTERJEE FUND MANAGEMENT, L.P.
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 170,000
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 170,000
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
170,000/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[x]
13 Percent of Class Represented By Amount in Row (11)
.28%/1/
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 6 of 81 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
Cayman Island
7 Sole Voting Power
Number of 214,171
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 214,171
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
214,171/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
.35%/1/
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 7 of 81 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 106,965
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 106,965
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
106,965/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
.18%/1/
14 Type of Reporting Person*
OO; IV
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 8 of 81 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 321,136
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 321,136
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
321,136/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
.53%/1/
14 Type of Reporting Person*
OO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 9 of 81 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 321,136
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 321,136
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
321,136/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[X]
13 Percent of Class Represented By Amount in Row (11)
.53%/1/
14 Type of Reporting Person*
CO; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 10 of 81 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*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [X]
6 Citizenship or Place of Organization
United States
7 Sole Voting Power Number of
Number of 11,811,585
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 11,811,585
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
11,811,585/1/
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[_]
13 Percent of Class Represented By Amount in Row (11)
16.31%/1/
14 Type of Reporting Person*
IA; IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- -------------
/1/ See Item 5. This number does not include certain securities of the
Issuer of which the Reporting Person may be deemed the beneficial owner.
<PAGE>
Page 11 of 81 Pages
This Amendment No. 10 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. 10 is being filed by the Reporting Persons (as
defined herein) to report the acquisition by the Reporting Persons (as defined
herein) of securities of the Issuer convertible into, or exercisable for, the
Shares. As more fully set forth herein, this statement constitutes an initial
statement for two of the Reporting Persons which, as a result of the
transactions reported herein, may be deemed to be the beneficial owner of
Shares. Capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Initial Statement. The Initial Statement is
supplementally amended as follows:
Item 2. Identity and Background.
This statement is being filed on behalf of the following persons
(collectively, the "Reporting Persons"):
(i) S-C Rig Investments-III, L.P. ("S-C Rig III");
(ii) S-C Rig Co. (the "General Partner");
(iii) Winston Partners, L.P. ("Winston L.P.");
(iv) Chatterjee Fund Management, L.P. ("CFM");
(v) Winston Partners II LDC ("Winston LDC");
(vi) Winston Partners II LLC ("Winston LLC");
(vii) Chatterjee Advisors LLC ("Chatterjee Advisors");
(viii) Chatterjee Management Company ("Chatterjee Management");
and
(ix) Purnendu Chatterjee ("Dr. Chatterjee");
This statement constitutes an initial filing with respect to
Winston L.P. and CFM. This statement relates to securities held for the accounts
of S-C Rig III, Winston L.P., Winston LDC and Winston LLC.
The Reporting Persons
Winston L.P. and CFM
- --------------------
Winston L.P. is a Delaware limited partnership which is
principally engaged in investing in securities. CFM is a Delaware limited
partnership and the general partner of Winston L.P. Dr. Chatterjee is the sole
general partner of CFM. The principal business purpose of CFM is to serve as the
sole general partner of Winston L.P. The principal office of Winston L.P. and
CFM is located at 888 Seventh Avenue, 30th Floor, New York, New York 10106.
<PAGE>
Page 12 of 81 Pages
Pursuant to regulations promulgated under Section 13(d) of the 1934 Act, CFM, as
the sole general partner of Winston L.P., and Dr. Chatterjee, as the sole
general partner of CFM, each may be deemed a beneficial owner of securities held
for the account of Winston L.P.
During the past five years, neither Winston L.P. nor CFM has been
(a) convicted in a criminal proceeding, or (b) a party to any civil proceeding
as a result of which he 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.
Item 3. Source and Amount of Funds or Other Consideration.
On December 31, 1996 S-C Rig III, Winston LDC and Winston LLC
entered into a letter agreement with the Issuer (the "Letter of Intent"), a copy
of which is attached hereto as Exhibit P and incorporated herein by reference in
response to this Item 3. Pursuant to the terms of the Letter of Intent, S-C Rig
III, Winston LDC and Winston LLC agreed in principle to purchase from the
Issuer, subject to certain conditions, 500 shares of Series P Convertible
Preferred Stock, par value $0.01 per share, convertible into Shares (the "Series
P Stock"), and warrants to purchase an aggregate of 850,000 Shares at an initial
exercise price of $9.2625 per Shares, subject to adjustment for certain capital
transactions (the "Series P Initial Warrants").
On January 23, 1997, each of S-C Rig III, Winston LDC and Winston
LLC, as well as Winston L.P., entered into a Convertible Securities Subscription
Agreement (the "Subscription Agreement") with the Issuer, a copy of which is
attached hereto as Exhibit Q and incorporated herein by reference in response to
this Item 3, pursuant to which each of the Reporting Persons subscribed for
Series P Stock and the Series P Initial Warrants.
Pursuant to the terms of the Subscription Agreement:
(i) S-C Rig III expended approximately $15,000,000 of its working
capital to purchase 300 Shares of Series P Stock and Series P Initial Warrants
to purchase 510,000 Shares, which are the only securities of the Issuer that
have been purchased for its account over the last 60 days;
(ii) Winston L.P. expended approximately $5,000,000 of its working
capital to purchase 100 Shares of Series P Stock and Series P Initial Warrants
to purchase 170,000 Shares, which are the only securities of the Issuer that
have been purchased for its account over the last 60 days;
(iii) Winston LDC expended approximately $3,666,667 of its working
capital to purchase 66 2/3 Shares of Series P Stock and Series P Initial
Warrants to purchase 113,333 Shares, which are the only securities of the Issuer
that have been purchased for its account over the last 60 days; and
(iv) Winston LLC expended approximately $1,333,333 of its working
capital to purchase 33 1/3 Shares of Series P Stock and Series P Initial
Warrants to purchase 56,667 Shares, which are the only securities of the Issuer
that have been purchased for its account over the last 60 days.
The Certificate of Designation of the Series P Stock (the
"Certificate of Designation") provides that until the fifth anniversary of the
issuance of the Series P Stock (when the Series P Stock will be mandatorily
<PAGE>
Page 13 of 81 Pages
converted into Shares), subject to certain restrictions, the holders of Series P
Stock may convert such Series P Stock into fully paid and nonassessable Shares.
The Certificate of Designation provides that each share of the Series P Stock is
convertible into the number of Shares that may be purchased with the "Designated
Price" of such share of Series P Stock. The Certificate of Designation defines
Designated Price as $50,000 per share, subject to certain adjustments (none of
which are currently applicable). The price per Share used for the purpose of
determining the number of Shares that may be purchased with the Designated Price
under the Certificate of Designation is the "Average Stock Price," which
generally equals the lowest daily volume-weighted average price of a Share for
the four trading days immediately preceding the date of conversion. Such price
is subject to certain adjustments, none of which are currently applicable,
depending on the length of time that the Series P Stock has been held after the
issuance thereof. For the purposes of this Schedule 13D, in determining the
amount of Shares into which the Series P Stock are convertible, an assumption
will be made that the Average Stock Price is $6.50. This price approximates the
recent trading price of Shares. Based on this price, which fluctuates on a daily
basis and is only an estimate for the purposes of this filing, each share of
Series P Stock would be convertible into approximately 7,692.31 Shares.
The Common Stock Purchase Warrant dated January 23, 1997 for the
Series P Initial Warrants (the "Common Stock Purchase Warrant") issued to each
of the Reporting Persons pursuant to the Subscription Agreement, in the form
attached hereto as Exhibit R and incorporated herein by reference provides that
each such Series P Initial Warrant may be exercised by the holder thereof, in
whole or in part, at any time at an exercise price of $9.2625 per Share, subject
to adjustment in the event of certain capital transactions by the Issuer.
The securities held for the accounts of the Reporting Persons may
be held through margin accounts maintained with brokers, which extend margin
credit as and when required to open or carry positions in its margin accounts,
subject to applicable federal margin regulations, stock exchange rules and such
firm's credit policies. The positions which may be held in the margin accounts,
including the Shares, are pledged as collateral security for the repayment of
debit balances in the respective accounts.
Item 4. Purpose of Transaction.
All of the Shares reported herein as having been acquired for the
accounts of the Reporting Persons were acquired for investment purposes. Neither
the Reporting Persons, nor, to the best knowledge of the Reporting Persons, any
of the other individuals identified in response to Item 2, has any plans or
proposals which relate to or would result in any of the transactions described
in subparagraphs (a) through (j) of Item 4 of Schedule 13D. The Reporting
Persons reserve the right to acquire additional securities of the Issuer, to
dispose of such securities at any time or to formulate other purposes, plans, or
proposals regarding the Issuer or any of its securities, to the extent deemed
advisable in light of general investment and trading policies of the Reporting
Persons, market conditions or other factors.
Item 5. Interest in Securities of the Issuer.
(a) (i) Excluding the Series P Stock, the aggregate number of Shares of
which each of S-C Rig III and the General Partner may be deemed a beneficial
owner is 11,090,449 (approximately 15.47% 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, except for the Series P
Stock). 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 Shares 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, (vi) 112,500 Shares issuable upon exercise of the June
Warrants held for the account of S-C Rig III and (vii) 510,000 Shares issuable
upon exercise of the 510,000 Series P Initial Warrants.
<PAGE>
Page 14 of 81 Pages
Based on the assumptions set forth in Item 3 with respect to the
Series P Stock, which are incorporated herein by reference, assuming the
conversion of all of the Series P Stock held for the account of S-C Rig III, the
aggregate number of Shares of which each of S-C Rig III and the General Partner
may be deemed a beneficial owner is 13,398,142 (approximately 18.11% 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 assumes the conversion of 300 shares of Series P Stock
into 2,307,693 Shares.
(ii) Excluding the Series P Stock, the aggregate number of Shares
of which each of Winston L.P. and CFM may be deemed a beneficial owner is
170,000 (approximately .28% 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 L.P., except for the Series P Stock). This
number represents the 170,000 Shares issuable upon the exercise of the 170,000
Series P Initial Warrants held for the account of Winston L.P.
Based on the assumptions set forth in Item 3 with respect to the
Series P Stock, which are incorporated herein by reference, assuming the
conversion of all of the Series P Stock held for the account of Winston L.P.,
the aggregate number of Share of which each of Winston L.P. and CFM may be
deemed a beneficial owner is 939,231 (approximately 1.53% of the total number of
Shares which would be outstanding assuming the exercise or conversion by Winston
L.P. of all of the convertible securities held for its account). This number
assumes the conversion of 100 shares of Series P Stock into 769,231 Shares.
(iii) Excluding the Series P Stock, the aggregate number of
Shares of which Winston LDC may be deemed a beneficial owner is 214,171
(approximately .35% 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, except for the Series P Stock). This number consists of
(i) 75,818 Shares issuable upon conversion of the Series N Shares held for its
account, (ii) 25,020 Shares issuable upon exercise of the June Warrants held for
its account, and (iii) 113,333 Shares issuable upon the exercise of the 113,333
Series P Initial Warrants.
Based on the assumptions set forth in Item 3 with respect to the
Series P Stock, which are incorporated herein by reference, assuming the
conversion of all of the Series P Stock held for the account of Winston LDC, the
aggregate number of Shares of which Winston LDC may be deemed a beneficial owner
is 726,992 (approximately 1.19% of the total number of Shares which would be
outstanding assuming the exercise or conversion by Winston LDC of all of the
convertible securities held for its account). This number assumes the conversion
of 6 2/3 shares of Series P Stock into 512,821 Shares.
(iv) Excluding the Series P Stock, the aggregate number of Shares
of which Winston LLC may be deemed a beneficial owner is 106,965 (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 LLC, except for the Series P Stock). This number consists of (i) 37,818
Shares issuable upon conversion of the Series N Shares held for its account,
(ii) 12,480 Shares issuable upon exercise of the June Warrants held for its
account, and (iii) 56,667 Shares issuable upon the exercise of the 56,667 Series
P Initial Warrants.
<PAGE>
Page 15 of 81 Pages
Based on the assumptions set forth in Item 3 with respect to the
Series P Stock, which are incorporated herein by reference, assuming the
conversion of all of the Series P Stock held for the account of Winston LLC, the
aggregate number of Shares of which may be deemed a beneficial owner is 363,375
(approximately .59% of the total number of Shares which would be outstanding
assuming the exercise or conversion by Winston LLC of all of the convertible
securities held for its account). This number assumes the conversion of 33 1/3
shares of Series P Stock into 256,410 Shares.
(v) Excluding the Series P Stock, the aggregate number of Shares
of which each of Chatterjee Advisors and Chatterjee Management may be deemed a
beneficial owner is 321,136 (approximately .53% 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,
except for the Series P Stock). This number consists of (i) 214,171 Shares which
Winston LDC may be deemed to own beneficially, and (ii) 106,965 Shares which
Winston LLC may be deemed to own beneficially.
Based on the assumptions set forth in Item 3 with respect to the
Series P Stock, which are incorporated herein by reference, assuming the
conversion of all of the Series P Stock held for the accounts of Winston LDC and
Winston LLC, the aggregate number of Shares of which each of Chatterjee Advisors
and Chatterjee Management may be deemed a beneficial owner is 1,090,367
(approximately 1.77% 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 assumes the conversion of 100
shares of Series P Stock held for the accounts of Winston LLC and Winston LDC
into 769,231 Shares.
(vi) Excluding the Series P Stock, the aggregate number of Shares
of which Dr. Chatterjee may be deemed a beneficial owner is 11,811,585
(approximately 16.31% 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, except for the Series P Stock).
This number consists of (i) 11,090,449 Shares which S-C Rig III and the General
Partner may be deemed to own beneficially, (ii) 30,000 Shares issuable upon
exercise of the options held directly for the personal account of Dr.
Chatterjee, (iii) 200,000 Shares issuable upon exercise of the options held by
XTEC, (iv) 321,136 Shares which Chatterjee Advisors and Chatterjee Management
may be deemed to own beneficially, and (v) the 170,000 Shares of which Winston
L.P. and CFM may be deemed to own beneficially.
Based on the assumptions set forth in Item 3 with respect to the
Series P Stock, which are incorporated herein by reference, assuming the
conversion of all of the Series P Stock held for the accounts of S-C Rig III,
Winston L.P., Winston LDC and Winston LLC, the aggregate number of Shares of
which Dr. Chatterjee may be deemed a beneficial owner is 15,657,740
(approximately 20.54% 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 assumes the conversion of 500
shares of Series P Stock held for the accounts of S-C Rig III, Winston L.P.,
Winston LDC and Winston LLC into 3,846,155 Shares.
(b) (i) Each of S-C Rig III and the General Partner has sole power to
vote and dispose of the Shares issuable upon the conversion or exercise of the
all of the convertible securities reported herein as being held for the account
of S-C Rig III.
<PAGE>
Page 16 of 81 Pages
(ii) Each of Winston L.P. and CFM has the sole power to direct
the voting and disposition of the Shares issuable upon the conversion or
exercise of the all of the convertible securities reported herein as being held
for the account of Winston L.P.
(iii) Winston LDC has sole power to direct the voting and
disposition of the Shares issuable upon the conversion or exercise of the all of
the convertible securities reported herein as being held for its account.
(iv) Winston LLC has sole power to direct the voting and
disposition of the Shares issuable upon the conversion or exercise of the all of
the convertible securities reported herein as being held for its account.
(v) Each of Chatterjee Advisors and Chatterjee Management has the
sole power to direct the voting and disposition of the Shares issuable upon the
conversion or exercise of the all of the convertible securities reported herein
as being held for the accounts Winston LDC and Winston LLC.
(vi) Dr. Chatterjee may be deemed to have the sole power to
direct the voting and disposition of the Shares issuable upon the conversion or
exercise of the all of the convertible securities reported herein as being held
for the accounts of S-C Rig III, Winston L.P., Winston LDC and Winston LLC.
Dr. Chatterjee also may be deemed to have the sole power to vote
and dispose of the 230,000 Shares issuable upon exercise of the 30,000 options
held directly by him and the 200,000 options held by XTEC.
(c) Except as disclosed in Item 3 and Item 6 hereof, which is
incorporated by reference in this Item 5, there have been no transactions
effected with respect to the Shares since November 30, 1996 (60 days prior to
the date hereof) by any of the Reporting Persons.
(d) (i) The partners of S-C Rig III, including Tivadar Charitable Lead
Trust, created under agreement dated 9/30/82 by Mr. George Soros as grantor,
have the right to participate in the receipt of dividends from, or proceeds from
the sale of, the securities described herein as being held for the account of
S-C Rig III in accordance with their partnership interests in S-C Rig III.
(ii) The partners of Winston L.P. have the right to participate
in the receipt of dividends from, or proceeds from the sale of, the securities
described herein as being held for the account of Winston L.P. in accordance
with their partnership interests in Winston L.P.
(iii) The shareholders of each of Winston LDC, including Winston
Partners II Offshore Ltd., a British Virgin Islands international business
corporation, and Winston LLC have the right to participate in the receipt of
dividends from, or proceeds from the sale of, the securities described herein as
being held for the account each of Winston LDC and Winston LLC, respectively, in
accordance with their ownership interests in Winston LDC and Winston LLC.
(iv) Dr. Chatterjee has the sole right to receive dividends from,
or proceeds from the sale of, the 30,000 options described herein as being held
directly for his personal account.
<PAGE>
Page 17 of 81 Pages
(v) The shareholders of XTEC, including Dr. Chatterjee, have the
right to receive dividends from, or proceeds from the sale of, the 200,000
options described herein as being held for the account XTEC in accordance with
their ownership interests in XTEC.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings in Relationship with
Respect to Securities of the Issuer.
In connection with its acquisition of securities reported herein,
certain of the Reporting Persons entered into the following agreements, each of
which is incorporated herein by reference: (i) the Letter of Intent attached
hereto as Exhibit P, (ii) the Subscription Agreement attached hereto as Exhibit
Q, (iii) the Common Stock Purchase Warrant in the form attached hereto as
Exhibit R, (iv) a Registration Rights Agreement dated January 23, 1997 between
the Issuer, S-C Rig III, Winston L.P., Winston LDC and Winston LLC attached
hereto as Exhibit S (the "Registration Rights Agreement"), and (v) a Letter
Agreement dated January 23, 1997 between the Issuer and each of S-C Rig III,
Winston L.P., Winston LDC and Winston LLC in the form attached hereto as Exhibit
T (the "Letter Agreement").
The Letter of Intent, the Subscription Agreement and the Common
Stock Purchase Warrant are described in Item 3 hereto and such disclosure is
incorporated herein by reference; however, such disclosure is qualified in its
entirely by reference to the specific provisions of such agreements, which
provisions are incorporated herein by reference.
The Letter Agreement contains certain agreements between each of
S-C Rig III, Winston L.P., Winston LDC and Winston LLC and the Issuer concerning
transactions in the securities of the Issuer. The Letter Agreement generally
provides, among other things, that unless the Issuer and holders of at least 66
2/3% of the Series P Stock otherwise agree, each holder of Preferred Stock may
convert, in the aggregate, not more than a limited percentage of Series P Stock
held by such holder. The percentages to which each holder are limited are based
on the number of days that have passed after December 31, 1996 and such
percentages are set forth in Exhibit T hereto and are incorporated herein by
reference.
The Letter Agreement also provides for certain trading
restrictions on the Series P Stock. It provides that if the market price for the
Shares is below a certain price for five consecutive trading days, that the
Issuer may, at its option, provide the holders of the Series P Stock with
written notice of a "Trading Restriction Period" during which holders of Series
P Stock would be restricted from engaging in trades involving the Shares. In
addition, the Letter Agreement provides that in the event the Issuer commences a
firmly underwritten public offering of its Shares and so requests, the holders
of the Series P Stock will refrain from engaging in any trades involving Shares
issued pursuant to a conversion of the Series P Stock or exercise of the Series
P Initial Warrants. The Letter Agreement also includes certain other provisions
affecting transactions in the securities of the Issuer, principally those
involving compliance with securities laws and the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended. All of such provisions are incorporated
herein by reference.
The Registration Rights Agreement entered into in connection with
the acquisition of the Series P Stock and the Series P Initial Warrants
obligates the Issuer to have the Shares underlying such securities registered
within a certain period of time. The Registration Rights Agreement provides that
the Issuer shall file and use its best efforts to cause to become effective, as
promptly as possible, but in any event by the 90th calendar day after January
23, 1997 a registration statement on Form S-3 under the Act or, if Form S-3 is
<PAGE>
Page 18 of 81 Pages
not then available, another appropriate form covering the resale of Shares
issuable upon conversion of the Series P Stock and upon the exercise of the
Series P Initial Warrants.
The Registration Rights Agreement contains other provisions
relating to registration procedures, indemnification and contribution and other
miscellaneous matters, all of which are incorporated herein by reference.
From time to time, each of the Reporting Persons may lend
portfolio securities to brokers, banks or other financial institutions. These
loans typically obligate the borrower to return the securities, or an equal
amount of securities of the same class, to the lender and typically provide that
the borrower is entitled to exercise voting rights and to retain dividends
during the term of the loan. From time to time to the extent permitted by
applicable laws, the Reporting Persons may borrow securities, including the
Shares, for the purpose of effecting, and may effect, short sale transactions,
and may purchase securities for the purpose of closing out short positions in
such securities.
Except as disclosed above, 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.
O. Joint Filing Agreement, dated as of January 29, 1997, by and
among S-C Rig III, the General Partner, Winston L.P., CFM, Winston LDC, Winston
LLC, Chatterjee Advisors, Chatterjee Management and Purnendu Chatterjee.
P. Letter Agreement dated December 31, 1996 between the Issuer
and S-C Rig III, Winston LDC and Winston LLC.
Q. Form of the Subscription Agreement dated January 23, 1997
entered into between the Issuer and each of S-C Rig III, Winston L.P., Winston
LDC and Winston LLC.
R. Form of the Common Stock Purchase Warrant issued to each of
S-C Rig III, Winston L.P., Winston LDC and Winston LLC.
S. Registration Rights Agreement dated January 23, 1997 between
the Issuer and S-C Rig III, Winston L.P., Winston LDC and Winston LLC.
T. Form of the Letter Agreement dated January 23, 1997 between
the Issuer and each of S-C Rig III, Winston L.P., Winston LDC and Winston LLC.
<PAGE>
Page 19 of 81 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.
January 29, 1997 S-C RIG INVESTMENTS-III, L.P.
By: S-C RIG CO., its General Partner
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Vice President
S-C RIG CO.
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Vice President
WINSTON PARTNERS, L.P.
By: Chatterjee Fund Management, L.P.,
its General Partner
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
-----------------------------
Peter Hurwitz
Attorney-in-Fact
CHATTERJEE FUND MANAGEMENT, L.P.
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Attorney-in-Fact
<PAGE>
Page 20 of 81 Pages
WINSTON PARTNERS II LDC
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Attorney-in-Fact
WINSTON PARTNERS II LLC
By: Chatterjee Advisors LLC, its Manager
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Manager
CHATTERJEE ADVISORS LLC
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Manager
CHATTERJEE MANAGEMENT COMPANY
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Vice President
PURNENDU CHATTERJEE
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Attorney-in-Fact
<PAGE>
Page 21 of 81 Pages
INDEX OF EXHIBITS
EXHIBIT PAGE
- ------- ----
O. Joint Filing Agreement, dated as of January 29, 1997, by and
among S-C Rig Investments-III, L.P., S-C Rig Co., Winston
Partners, L.P., Chatterjee Fund Management, L.P., Winston
Partners II LDC, Winston Partners II LLC, Chatterjee
Advisors LLC, Chatterjee Management Company and Purnendu
Chatterjee. 22
P. Letter Agreement dated December 31, 1996 between the Issuer
and S-C Rig-III Investments, L.P., Winston Partners II LDC
and Winston Partners II LLC. 24
Q. Form of the Subscription Agreement dated January 23, 1997
entered into between the Issuer and each of S-C Rig-III
Investments, L.P., Winston Partners, L.P., Winston Partners
II LDC and Winston Partners II LLC. 28
R. Form of the Common Stock Purchase Warrant issued to each of
S-C Rig III Investments, L.P., , Winston Partners, L.P.,
Winston Partners II LDC and Winston Partners II LLC. 46
S. Registration Rights Agreement dated January 23, 1997 between
the Issuer, S-C Rig-III Investments, L.P., Winston Partners,
L.P., Winston Partners II LDC and Winston Partners II LLC. 62
T. Form of the Letter Agreement dated January 23, 1997 between
the Issuer and each of S-C Rig-III Investments, L.P.,
Winston Partners, L.P., Winston Partners II LDC and Winston
Partners II LLC. 78
Page 22 of 81 Pages
EXHIBIT O
The undersigned hereby agree that the statement on Schedule 13D
with respect to the Common Stock of Geotek Communications, Inc., dated January
29, 1997 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.
January 29, 1997 S-C RIG INVESTMENTS-III, L.P.
By: S-C RIG CO., its General Partner
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Vice President
S-C RIG CO.
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Vice President
WINSTON PARTNERS, L.P.
By: Chatterjee Fund Management, L.P.,
its General Partner
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
-----------------------------
Peter Hurwitz
Attorney-in-Fact
CHATTERJEE FUND MANAGEMENT, L.P.
By: Purnendu Chatterjee,
its General Partner
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Attorney-in-Fact
<PAGE>
Page 23 of 81 Pages
WINSTON PARTNERS II LDC
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Attorney-in-Fact
WINSTON PARTNERS II LLC
By: Chatterjee Advisors LLC, its Manager
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
Manager
CHATTERJEE ADVISORS LLC
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Manager
CHATTERJEE MANAGEMENT COMPANY
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Vice President
PURNENDU CHATTERJEE
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Attorney-in-Fact
Page 24 of 81 Pages
EXHIBIT P
December 31, 1996
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Attention: Yaron I. Bitan, President
Re: 500 shares of Series P Convertible Preferred Stock, $50,000
liquidation preference per share (the "Series P Stock"), created
pursuant to a Certificate of Designation in respect of the Series
P Stock (the "Series P Certificate of Designation")
----------------------------------------------------------------
Gentlemen:
Geotek Communications, Inc. (the "Company"), has today sold
(including all related transactions, the "Series O Sale") to a group of
institutional investors led by Promethean Investment Group, L.L.C. (the
"Promethean Investors"), 1,000 shares of its Series O Convertible Preferred
Stock, $50,000 liquidation preference per share (the "Series O Stock"), for an
aggregate purchase price of $50 million. As part of the Series O Sale, the
Company delivered Warrants (the "Initial Warrants") to purchase 1.7 million
shares of its common stock, per value $.01 per share (the "Common Stock"), and
entered into a Convertible Securities Purchase Agreement, dated the date hereof
(the "Purchase Agreement"), a registration rights agreement dated the date
hereof (the "Registration Rights Agreement"), and a side letter dated the date
hereof (the "Side Letter"). The Certificate of Designation in respect of the
Series O Stock (the "Series O Certificate of Designation"), the warrants to
purchase shares of Common Stock attached thereto (the "Redemption Warrants"),
the Initial Warrant, the Registration Rights Agreement, the Purchase Agreement
and the Side Letter are attached hereto and are herein collectively called the
"Series O Documentation".
The Company and S-C Rig Investments - III, L.P., Winston Partners
II LLC, and Winston Partners II LDC (collectively the "Buyers"), hereby agree as
follows:
1. Subject to the terms and conditions hereof, on January 23, 1997, the Company
shall sell (including all related transactions, the "Series P Sale") to the
Buyers, and the Buyers shall purchase from the Company,
(a) 500 shares of Series P Stock, and
<PAGE>
Page 25 of 81 Pages
(b) a warrant (the "Series P Initial Warrant") to purchase 850,000
shares of Common Stock at an initial exercise price equal to the
initial exercise price of the Initial Warrant.
The aggregate purchase price for the shares of Series P Stock and the Series
P Initial Warrant is $25 million.
2. In connection with the Series P Sale, the parties shall execute and deliver
to each other a Convertible Securities Purchase Agreement, a Registration
Rights Agreement (the "Series P Registration Rights Agreement") and a side
letter (collectively, with the Series P Certificate of Designation
(including the warrants attached thereto (the "Series P Redemption
Warrants")) and the Series P Initial Warrant, the "Series P Documentation").
3. The terms of the Series P Sale (including the Series P Documentation) shall
be, in Buyers' reasonable judgment, substantially the same as those in
respect of the Series O Sale (determined without regard to clauses (a)
through (g), inclusive, below), including, the Series O Documentation, and,
in addition, shall:
(a) provide that restrictions on conversion pursuant to Sections
13(b) and (c) of the Series O Certificate of Designation be
restrictions only on trading;
(b) provide a mechanic, acceptable to Buyers, to facilitate
compliance with the Hart-Scott- Rodino Antitrust Improvements Act
of 1976, as amended, in respect of the conversion of the Series P
Stock and exercise of all related warrants;
(c) eliminate any reference to a limitation on the amount of
securities the Buyers or their affiliates may own;
(d) amend the earlier registration rights agreements to which the
Buyers or their affiliates are parties to include Common Stock
which Buyers may acquire upon conversion of the Series P Stock
and exercise of the related warrants and include in the Series P
Registration Rights Agreement all other registrable securities
covered by earlier registration rights agreements to which the
Buyers or their affiliates are parties;
(e) include in the definition of Registrable Securities in the Series
P Registration Rights Agreement Common Stock received as
dividends on the Series P Stock;
(f) provide that the time periods comparable to those in the
definition of Conversion Date Market Price and in paragraph 3 of
the Side Letter run from the date hereof; and
(g) provide that the Series P Initial Warrants and Series P
Redemption Warrants adjust in respect of transactions occurring
after the date hereof but before their issuance as if they had
been issued on the date hereof.
<PAGE>
Page 26 of 81 Pages
4. The Company hereby represents and warrants to the Buyers that:
(a) It is duly authorized to enter into this Agreement with Buyers
and that the same constitutes the valid and binding agreement of
the Company and is enforceable against the Company in accordance
with its terms except for the enforcement of equitable remedies
and as enforcement may be affected by insolvency laws;
(b) The execution and delivery by the Company of this Agreement and
the consummation thereby of the transactions contemplated hereby
or by the Series P Documentation will not
i) result in a breach or violation of the Certificate of
Incorporation or By laws of the Company,
ii) results in a violation of law or the rules and regulations
of any self-governing body applicable to the Company;
iii) result in a breach (or give rise to a right to terminate),
whether with the giving of notice or lapse of time or both,
any agreement to which the Company or any of its
subsidiaries is a party; and
iv) require the consent or approval of any person or entity, the
absence of which would likely result in a material advise
effect on the business, prospects or financial condition of
the Company; and
(c) True and correct copies of the Series O Documentation are
attached hereto. The Series O Documentation constitutes all
agreements and understandings in respect of the Series O Sale and
the transactions contemplated thereby.
Very truly yours,
S-C RIG INVESTMENTS - III, L.P.
By: S-C Rig Co.,
its general partners
By: /S/ PETER HURWITZ
----------------------------------
Peter Hurwitz
<PAGE>
Page 27 of 81 Pages
WINSTON PARTNERS II LLC
By: Chatterjee Advisors L.L.C.,
its Manager
By: /S/ PETER HURWIT
----------------------------------
Peter Hurwitz, Manager
WINSTON PARTNERS II LDC
By: /S/ PETER HURWITZ
---------------------------------------
Peter Hurwitz
Attorney-in-fact
Accepted and agreed to:
GEOTEK COMMUNICATIONS, INC.
By: _______________________
EXHIBIT Q
CONVERTIBLE SECURITIES SUBSCRIPTION AGREEMENT
This Convertible Securities Subscription Agreement (the "Agreement") has been
executed by the undersigned (the "Subscriber") in connection with the sale of
certain shares of Series P Convertible Preferred Stock, $.01 par value, and an
initial Designated Price (as defined in the Certificate of Designation with
respect thereto) of $50,000 per share (the "Preferred Stock"), of Geotek
Communications, Inc., a Delaware corporation (the "Company"), convertible into
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company. The
rights and preferences of the Preferred Stock, including the terms on which the
Preferred Stock may be converted into Common Stock and the terms of certain
warrants issuable in connection with the Company's redemption of the Preferred
Stock, are set forth in the Certificate of Designation attached hereto as
Exhibit A (the "Certificate of Designation") which shall have been executed,
- ---------
acknowledged, filed, recorded and become effective in accordance with the
General Corporation Law of the State of Delaware prior to the acceptance by the
Company of this Agreement. The terms of certain warrants (collectively with the
warrants issuable in connection with the Company's redemption of the Preferred
Stock, the "Warrants") issuable in connection with the issuance of the Preferred
Stock are set forth in Exhibit A-1 attached hereto. The solicitation of this
-----------
Agreement and, if accepted by the Company, the offer and sale of Preferred Stock
and Warrants, are being made in reliance upon the provisions of Regulation D
("Regulation D") promulgated by the Securities and Exchange Commission ("SEC")
under the United States Securities Act of 1933, as amended (the "Securities
Act"), or under the provisions of Section 4(2) of the Securities Act. The
Preferred Stock, the Warrants and the Common Stock issuable upon conversion or
exercise thereof are sometimes collectively referred to in this Agreement as the
"Securities." The Common Stock issuable upon conversion of the Preferred Stock
and upon exercise of the Warrants is sometimes referred to as the "Underlying
Stock." The Subscriber wishes to subscribe for the number of shares of Preferred
Stock and at the aggregate purchase price set forth in Section 13 and in
accordance with the other terms and conditions of this Agreement, the
Certificate of Designation and the Registration Rights Agreement attached hereto
as Exhibit B. In consideration of the mutual promises, representations,
----------
warranties and conditions set forth herein, and intending to be legally bound
hereby, the Company and the Subscriber agree as follows:
1. Agreement to Subscribe; the Subscriber
1.1 Purchase and Issuance of Preferred Stock and Warrants. The Subscriber
-----------------------------------------------------
hereby subscribes for the number of shares of Preferred Stock and
Warrants at the aggregate purchase price set forth in Section 13. The
<PAGE>
Page 29 of 81 Pages
closing of the purchase of such shares of Preferred Stock and Warrants
(the "Closing") shall occur on January 23, 1997 or such other date as
the Company and the Subscriber shall agree (the "Closing Date") and
shall be deemed to have occurred when (i) a copy of the Certificate of
Designation as filed and certified by the Secretary of State of the
State of Delaware has been delivered to the Subscriber, (ii) this
Agreement and the Registration Rights Agreement have been executed and
delivered by both the Subscriber and the Company, (iii) the purchase
price has been delivered by the Subscriber to the Company (in same day
funds via wire transfer pursuant to instructions previously delivered
for such purpose), and (iv) certificates representing the shares of
Preferred Stock and Warrants subscribed for hereby have been delivered
by the Company to Subscriber.
1.2 Nature of the Subscriber. The Subscriber is purchasing the Preferred
-------------------------
Stock for its own account and the Subscriber represents and warrants
that it is an "Accredited Investor" as that term is defined in Rule
501 of Regulation D.
1.3 Conditions Precedent to the Obligation of the Company to Issue and
----------------------------------------------------------------------
Sell the Preferred Stock and Warrants. The obligation hereunder of the
-------------------------------------
Company to issue and/or sell the Preferred Stock and Warrants to the
Subscriber is subject to the satisfaction, at or before the Closing,
of each of the conditions set forth below. These conditions are for
the Company's sole benefit and may be waived by the Company at any
time in its sole discretion.
(a) Accuracy of the Subscriber's Representations and Warranties. The
------------------------------------------------------------
representations and warranties of the Subscriber shall be true
and correct as of the date when made and as of the Closing Date
as though made at each such time.
(b) Performance by the Subscriber. The Subscriber shall have
--------------------------------
performed, satisfied and complied in all respects with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Subscriber at
or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
-------------
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction or any stock exchange, interdealer
quotation system or other self-regulatory organization with
jurisdiction over the Company or its securities which prohibits
or adversely affects any of the transactions contemplated by this
<PAGE>
Page 30 of 81 Pages
Agreement, nor shall any proceeding have been commenced which may
have the effect of prohibiting or adversely affecting any of the
transactions contemplated by this Agreement.
(d) Side Letter Agreement. The Company and the Subscriber shall have
---------------------
entered into a letter agreement in substantially the form
attached hereto as Exhibit C concerning block trade sales, short
---------
sale transactions and certain other matters.
1.4 Conditions Precedent to the Obligation of the Subscriber to Purchase
the Preferred Stock and Warrants. The obligation of the Subscriber
hereunder to purchase the Preferred Stock from the Company is subject
to the satisfaction, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Subscriber's
sole benefit and may be waived by the Subscriber at any time in its
sole discretion.
(a) Accuracy of the Company's Representations and Warranties. The
-----------------------------------------------------------
representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as
though made at each such time.
(b) Performance by the Company. The Company shall have performed,
---------------------------
satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior
to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
-------------
decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits or adversely affects any
of the transactions contemplated by this Agreement, nor shall any
proceeding have been commenced which may have the effect of
prohibiting or adversely affecting any of the transactions
contemplated by this Agreement.
(d) Adverse Changes. Since September 30, 1996, no event which had or
---------------
is likely to have a Material Adverse Effect (as defined in
Section 3.5 below) on the Company has occurred.
(e) No Suspension of Trading in or Delisting of Common Stock. Trading
--------------------------------------------------------
in the Common Stock shall not have been suspended by the SEC or
<PAGE>
Page 31 of 81 Pages
the Nasdaq National Market ("Nasdaq" or the "Exchange") and the
Common Stock shall not have been delisted from the Exchange.
(f) Legal Opinion. The Company shall have delivered to the Subscriber
-------------
the opinion of Messrs. Klehr, Harrison, Harvey, Branzburg &
Ellers, independent counsel to the Company, in substantially the
form attached hereto as Exhibit D.
---------
(g) Officer's Certificate. The Company shall have delivered to the
----------------------
Subscriber a certificate in form and substance reasonably
satisfactory to the Subscriber, executed by an executive officer
of the Company, to the effect that all the conditions to the
Closing shall have been satisfied as of the Closing Date.
(h) Filing of the Certificate of Designation. The Certificate of
-------------------------------------------
Designation, conforming to the terms of this Agreement, shall
have been duly filed with the Secretary of State of the State of
Delaware and a certified copy thereof shall have been delivered
to the Subscriber.
(i) Registration Rights Agreement. The Company and the Subscriber
-------------------------------
shall have entered into the Registration Rights Agreement in the
form attached as Exhibit B.
---------
2. Representations and Warranties of Subscriber
The Subscriber represents and warrants to the Company that:
2.1 No Government Recommendation or Approval. The Subscriber understands
-----------------------------------------
that no United States federal or state agency or similar agency of any
other country, has passed upon or made any recommendation or
endorsement of the Company or the offering of the Securities.
2.2 Intent. The Subscriber is purchasing the Securities for its own
------
account and not with a view towards distribution in violation of
securities laws, and the Subscriber has no present arrangement
(whether or not legally binding) at any time to sell the Securities to
or through any person or entity; provided, however, that by making the
representations herein, the Subscriber does not agree to hold the
Securities for any minimum or other specific term and reserves the
right to dispose of the Securities at any time in accordance with
<PAGE>
Page 32 of 81 Pages
federal and state securities laws applicable to such disposition. The
Subscriber has been advised of or is aware of the provisions of Rule
144 promulgated under the Securities Act.
2.3 Sophisticated Investor. The Subscriber is a sophisticated investor (as
----------------------
defined in Rule 506(b)(2)(ii) of Regulation D) and an accredited
investor (as defined in Rule 501 of Regulation D), and has such
experience in business and financial matters that it is capable of
evaluating the merits and risks of an investment in the Securities.
The Subscriber acknowledges that the Securities are speculative and
involve a high degree of risk. The Subscriber understands that there
is no established market for the Preferred Stock or the Warrants and
that no public market therefor is foreseen.
2.4 Independent Investigation. The Subscriber, in making its decision to
--------------------------
purchase the Securities subscribed for hereunder, has relied upon an
independent investigation made by it and/or its representatives and
has not relied on any information or representations made by third
parties or on any oral or written representations or assurances from
the Company or any representative or agent of the Company, other than
as set forth in this Agreement, in the public filings of the Company
and in the documents described below. Prior to the date hereof, the
Subscriber has been furnished with and has reviewed the Company's
Annual Report on Form 10- K for the period ended December 31, 1995
(the "1995 Form 10-K") sent to the Company's shareholders and all
documents filed by the Company with the SEC since December 31, 1995,
pursuant to sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (excluding
preliminary proxy statement filings) (such documents are collectively
referred to in this Agreement as the "Exchange Act Reports"),
including, without limitation, the Company's Reports on Form 10-Q for
the periods ended March 31, 1996, June 30, 1996 and September 30,
1996, as filed with the SEC on May 10, 1996, August 14, 1996 and
November 14, 1996, respectively, and a copy of the Company's
Registration Statement on Form S-3 declared effective by the SEC on
September 30, 1996. The Subscriber has had a reasonable opportunity to
ask questions of and receive answers from the Company concerning the
Company and the offering of the Securities contemplated hereby.
2.5 Authority. This Agreement has been duly authorized and validly
executed and delivered by the Subscriber and is a valid and binding
agreement enforceable against the Subscriber in accordance with its
terms, subject to general principles of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights generally.
<PAGE>
Page 33 of 81 Pages
2.6 No Legal Advice From Company. The Subscriber acknowledges that it has
----------------------------
had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with its own legal counsel and tax
advisors. The Subscriber is relying solely on such counsel and
advisors and not on any statements or representations of the Company
or any of its representatives or agents for legal, tax or investment
advice with respect to this investment.
2.7 No Broker. The Subscriber has taken no action which would give rise to
---------
any claim by any person for brokerage commission, finder's fees or
similar payments by the Company relating to this Agreement or the
transactions contemplated hereby.
2.8 [Intentionally Omitted]
2.9 Reliance on Representations and Warranties. The Subscriber understands
------------------------------------------
that the Securities are being offered and sold to it in reliance on
specific provisions of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth in this Agreement in order
to determine the applicability of such provisions.
2.10 Transfer or Resale. The Subscriber understands that (i) except as
-------------------
provided in the Registration Rights Agreement, the Securities have not
been and are not being registered under the Securities Act or any
state securities laws, and may not be transferred unless (a)
subsequently registered thereunder or (b) the Subscriber shall have
delivered to the Company an opinion of counsel (which opinion and
counsel shall be reasonably acceptable to the Company) to the effect
that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration; (ii) any
sale of such Securities made in reliance on Rule 144 promulgated under
the Securities Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of
such Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as
that term is defined in the Securities Act) may require compliance
with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor
any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder (in each
case, other than pursuant to the Registration Rights Agreement).
<PAGE>
Page 34 of 81 Pages
2.11 Legends. The Subscriber understands that the Preferred Shares,
-------
Warrants and, until such time as the Underlying Stock has been
registered under the Securities Act, as contemplated by the
Registration Rights Agreement or otherwise may be sold by the
Subscriber pursuant to Rule 144 under the Securities Act (or any
successor rule thereto) without any restriction as to the number of
securities acquired hereunder that can then be immediately sold, the
certificates for the Underlying Stock, may bear a restrictive legend
in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Securities):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
securities have been acquired for investment and may not be sold,
transferred or assigned in the absence of an effective registration
statement for the securities under said Act, or an opinion of counsel,
in form, substance and scope reasonably acceptable to the Company,
that registration is not required under said Act."
The legend set forth above shall be removed and the Company shall
issue a certificate without such legend to the holder of any Security upon which
it is stamped, if, unless otherwise required by state securities laws, (a) the
sale of such Security is registered under the Securities Act or (b) such holder
provides the Company with an opinion of counsel, in form, substance and scope
reasonably acceptable to the Company, to the effect that a public sale or
transfer of such Security may be made without registration under the Securities
Act or (c) such holder provides the Company with reasonable assurances that such
Security can be sold pursuant to Rule 144 under the Securities Act (or a
successor rule thereto) without any restriction as to the number of Securities
acquired as of a particular date that can then be immediately sold. The
Subscriber agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, in compliance with
applicable securities law. In the event the above legend is removed from any
Security, the Company may, upon reasonable advance notice to the Subscriber,
require that the above legend be placed on any Security that cannot then be sold
pursuant to an effective registration statement or Rule 144 under the Securities
Act (or any successor rule thereto) without any restriction as to the number of
securities acquired hereunder that can then be immediately sold.
3. Representations and Warranties of the Company
The Company represents and warrants to the Subscriber that:
<PAGE>
Page 35 of 81 Pages
3.1 Company Status. The Company has registered its Common Stock pursuant
---------------
to Section 12(b) or 12(g) of the Exchange Act, is in full compliance
with all reporting requirements of the Exchange Act, and the Company
has maintained all requirements for the continued listing of its
Common Stock, and such Common Stock is currently listed on the
Exchange, which Exchange is the principal market for the Company's
Common Stock.
3.2 Current Public Information. The Exchange Act Reports are the only
----------------------------
filings made by the Company since December 31, 1995 pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act.
3.3 No General Solicitation in Regard to this Transaction. Neither the
--------------------------------------------------------
Company nor any of its affiliates nor any distributor or any person
acting on its or their behalf has conducted any general solicitation
(as that term is used in Regulation D) with respect to any of the
Securities, nor have they made any offers or sales of any security or
solicited any offers to buy any security under circumstances that
would require the registration of the Securities under the Securities
Act.
3.4 Capitalization; Valid Issuance of Preferred Stock and Common Stock.
---------------------------------------------------------------------
The Company has an authorized capitalization set forth on Schedule
--------
3.4. Except as set forth on Schedule 3.4, no shares of Preferred Stock
---
or options, warrants or other securities convertible or exercisable
into Common Stock have been issued or are outstanding. The Company has
issued and outstanding that number of shares of Common Stock and
preferred stock of various series, as set forth on Schedule 3.4, and
------------
all such shares have been duly and validly authorized and issued, are
fully paid and non-assessable; prior to the Closing Date, the
authorized capitalization shall include the Securities; upon issuance
of the Securities, the Securities will be duly and validly issued,
fully paid and non-assessable; the Underlying Stock, when issued and
delivered in accordance with the terms of the Certificate of
Designation, will be duly and validly issued, fully paid and
non-assessable; and, except as set forth on Schedule 3.4 hereto, the
------------
holders of outstanding capital stock of the Company are not and shall
not be entitled to preemptive or other rights afforded by the Company
to subscribe for the Securities or the Underlying Stock. As of the
Closing Date, the Company shall have duly filed the Certificate of
Designation, and all of the rights, preferences and privileges of the
Preferred Stock shall be as set forth in the Certificate of
Designation, a copy of which, certified by the Secretary of State of
the State of Delaware, shall be delivered to the Subscriber on or
before the Closing Date.
<PAGE>
Page 36 of 81 Pages
3.5 Organization and Qualification. The Company is a corporation duly
--------------------------------
incorporated and existing in good standing under the laws of the State
of Delaware and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The
Company does not have any subsidiaries, except as set forth on
Schedule 3.5. The Company is duly qualified to do business as a
-------------
foreign corporation and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it
makes such qualification necessary other than those in which the
failure so to qualify would not have a Material Adverse Effect.
"Material Adverse Effect" means any material adverse effect on the
business, operations, properties, prospects of the entity taken as a
whole, or the consolidated financial condition of the entity with
respect to which such term is used, or with respect to any other
entity controlled by such entity, and/or any condition or situation
which would prohibit or otherwise interfere with the ability of the
entity with respect to which said term is used to enter into or
perform its obligations under this Agreement, the Certificate of
Designation or the Registration Rights Agreement.
3.6 Authorization; Enforcement. (i) The Company has the requisite
----------------------------
corporate power and authority to enter into and perform this Agreement
and the Registration Rights Agreement and to issue the Securities
subject to the limitations and conditions contained in and otherwise
in accordance with the terms hereof and of the Certificate of
Designation, the Warrants and the Side Letter, (ii) the execution and
delivery of this Agreement by the Company and the consummation by it
of the transactions contemplated hereby including, without limitation,
the issuance of the Underlying Stock (based on the conversion price in
effect on the date hereof), have been duly authorized by all necessary
corporate action, and no further consent or authorization of the
Company or its Board of Directors or stockholders is required, (iii)
this Agreement and the Registration Rights Agreement have been duly
executed and delivered by the Company, and (iv) this Agreement and the
Registration Rights Agreement constitute the valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, except (x) as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application and
(y) as rights to indemnity or contribution may be limited by federal
and state securities laws and public policy considerations.
3.7. Corporate Documents. The Company has furnished or made available to
--------------------
the Subscriber true and correct copies of the Company's Certificate of
<PAGE>
Page 37 of 81 Pages
Incorporation as in effect on the date hereof (the "Certificate"), and
the Company's By-Laws, as in effect on the date hereof (the
"By-Laws").
3.8 No Conflicts. The execution, delivery and performance of this
-------------
Agreement and the Registration Rights Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
and thereby including, without limitation, the issuance of any of the
Securities or the Underlying Stock (based on the conversion price in
effect on the date hereof), do not and will not (i) result in a
violation of the Certificate or By-Laws or (ii) conflict with, or
constitute a default (or an event which, with notice or lapse of time
or both, would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or result in a violation of any federal
state, local or foreign law, rule, regulation, order, judgment or
decree (including Federal and state securities laws and regulations)
applicable to the Company or any of its subsidiaries or by which any
property or asset of the Company or any of its subsidiaries is bound
or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect);
provided that, for purposes of such representation as to Federal,
state, local or foreign law, rule or regulation, no representation is
made herein with respect to any of the same applicable solely to the
Subscriber and not to the Company. The business of the Company is not
being conducted in violation of any law, ordinance or regulations of
any governmental entity, except for possible violations which either
singly or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under Federal, state or local law,
rule or regulation in the United States to obtain any consent which
has not been obtained, or authorization or order of, or make any
filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under
this Agreement or issue and sell the Securities in accordance with the
terms hereof and thereof (other than any SEC, Nasdaq or state
securities filings in connection with this offering which may be
required to be made by the Company subsequent to the Closing, and any
registration statement which may be filed pursuant hereto); provided
that, for purposes of the representation made in this sentence, the
Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Subscriber and/or its principals
herein.
3.9 Exchange Act Reports. The Company has delivered or made available to
--------------------
the Subscriber true and complete copies of the Exchange Act Reports
<PAGE>
Page 38 of 81 Pages
(including, without limitation, proxy information and solicitation
materials). As of their respective dates, the Exchange Act Reports
complied in all material respects with the requirements of the
Exchange Act and rules and regulations of the SEC promulgated
thereunder and other federal, state and local laws, rules and
regulations applicable to such Exchange Act Reports, and none of the
Exchange Art Reports contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of the Company included in the Exchange Act
Reports comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
SEC or other applicable rules and regulations with respect thereto.
Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
during the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company
as of the dates thereof and the results of operations and cash flows
for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
3.10 No Material Adverse Change. Since September 30, 1996, the end of the
---------------------------
period for which the most recent Quarterly Report of the Company on
Form 10-Q was filed with the SEC, a copy of which is included in the
Exchange Act Reports, no Material Adverse Effect has occurred or
exists with respect to the Company or its subsidiaries.
3.11 No Undisclosed Liabilities. The Company and its subsidiaries have no
---------------------------
liabilities or obligations not disclosed in the Exchange Act Reports,
other than those incurred in the ordinary course of the Company's or
its subsidiaries' respective businesses since September 30, 1996 and
which, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company and its subsidiaries taken as a
whole.
3.12 No Integrated Offering. Neither the Company, nor any of its
-------------------------
affiliates, nor any person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would require
registration of the Securities under the Securities Act.
<PAGE>
Page 39 of 81 Pages
3.13 Broker. The Company has taken no action which would give rise to any
------
claim by any person for brokerage commission, finder's fees or similar
payments by the Subscriber relating to this Agreement or the
transactions contemplated hereby.
3.14 Acknowledgment of Dilution. The number of shares of Underlying Stock
---------------------------
issuable upon conversion of the Series P Preferred Stock will increase
substantially in certain circumstances, including the circumstance
wherein the trading price of the Common Stock declines. The Company
acknowledges that its obligation to issue Underlying Stock upon
conversion of the Preferred Stock in accordance with the Certificate
of Designation is absolute and unconditional, regardless of the
dilution that such issuance may have on the ownership interests of
other stockholders, but is nevertheless subject to the terms and
conditions of general application imposed upon the Company by
governmental decrees and by the Exchange.
4. Covenants of the Company
4.1 Registration Rights. The Company shall, at the Closing, enter into a
--------------------
Registration Rights Agreement with the Subscriber in substantially the
form annexed hereto as Exhibit B.
---------
4.2 Reservation of Common Stock. The Company has reserved four million
-----------------------------
(4,000,000) shares of Common Stock and the Company shall continue to
reserve and keep available at all times, free of preemptive rights and
subject to such legal limits and rules of exchanges on which the
Common Stock may be traded, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue shares of its
Common Stock upon conversion of the Series P Preferred Stock and
exercise of the outstanding Warrants; provided, however, that from and
-------- -------
after the date of the Company's annual shareholders' meeting in
calendar year 1997, the number of shares so reserved shall at no time
be less two hundred percent (200%) of that number of shares of the
Company's Common Stock for which Preferred Stock and Warrants are then
convertible or exercisable, as equitably adjusted pursuant to any
stock splits, split ups, recapitalization or reorganization of shares
of Common Stock. The number of shares so reserved may be reduced by
the number of shares actually delivered pursuant to conversion of
Series P Preferred Stock; provided that in no event shall the number
--------
of shares so reserved be less than the maximum number required to
satisfy remaining conversion rights on the unconverted Series P
Preferred Stock.
4.3 Listing of Underlying Stock. The Company hereby agrees, promptly
-----------------------------
following the Closing of the transaction contemplated by this
<PAGE>
Page 40 of 81 Pages
Agreement, to take such action to cause the Underlying Stock to be
listed on the Exchange as promptly as possible but no later than
ninety (90) days following the Closing. The Company further agrees
that, if the Company applies to have the Common Stock traded on any
principal stock exchange, it will include in such application the
Underlying Stock and will take such other action as is necessary or
desirable to cause the Underlying Stock to be listed on such exchange
as promptly as possible.
4.4 Exchange Act Registration. For so long as the Company is in existence
-------------------------
and Preferred Stock remains outstanding, the Company will cause its
Common Stock to continue to be registered under Section 12(g) or 12(b)
of the Exchange Act, will comply in all respects with its reporting
and filing obligations under said Act and will not take any action or
file any document (whether or not permitted by said Act or the rules
thereunder) to terminate or suspend such registration or to terminate
or suspend its reporting and filing obligations under said Act. The
Company will take all action necessary to continue the listing and
trading of its Common Stock on the Exchange and will comply in all
respects with the Company's reporting, filing and other obligations
under the by-laws or rules of the Exchange; provided, however, that
the Company may terminate such listing at any time so long as the
Company's Common Stock is then listed on either the American Stock
Exchange or the New York Stock Exchange.
4.5 Corporate Existence. The Company will take all steps necessary to
--------------------
preserve and continue the corporate existence of the Company;
provided, however, that this sentence shall not limit the Company's
ability to engage in any bona fide corporate transaction or
reorganization otherwise consistent with this Agreement.
5. [Intentionally Omitted]
6. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of
conflicts of law or choice of law, except for matters arising under
the Securities Act or the Exchange Act, which matters shall be
construed and interpreted in accordance with such Acts. The Company
hereby agrees that all actions or proceedings arising directly or
indirectly from or in connection with this Agreement shall, at the
Subscriber's sole option, be litigated only in the Supreme Court of
the State of New York or the United States District Court for the
Southern District of New York located in New York County, New York.
<PAGE>
Page 41 of 81 Pages
The Company consents to the jurisdiction and venue of the foregoing
courts and consents that any process or notice of motion or other
application to either of said courts or a judge thereof may be served
inside or outside the State of New York or the Southern District of
New York by registered mail, return receipt requested, directed to the
Company at its address set forth in this Agreement (and service so
made shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other manner as
may be permissible under the rules of said court.
7. Assignment; Entire Agreement; Amendment
(a) Neither this Agreement nor any obligations of the Company
hereunder may be assigned by the Company to any other person or
entity. The provisions of this Agreement shall inure to the
benefit of, and be enforceable by, any transferee of any of the
Securities with respect to the Securities held by such person.
(b) This Agreement, the Warrants, the Certificate of Designation, the
Registration Rights Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof
and thereof, and supersedes all prior agreements (including,
without limitation, that certain letter agreement dated December
31, 1996 between the Company and S-C Rig Investments-III, L.P.,
Winston Partners II LLC and Winston Partners II LDC),
understandings and negotiations, both written and oral, between
the parties with respect to the subject matter of this Agreement.
No party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except as
specifically set forth in this Agreement or therein. Except as
expressly provided in this Agreement, neither this Agreement nor
any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge or
termination is sought.
8. Publicity
The Company agrees that it will not disclose, and will not include in
any public announcement, the name of the Subscriber without its
consent, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such
requirement.
<PAGE>
Page 42 of 81 Pages
9. Notices, Etc.; Expenses; Indemnity
(a) Any notice, demand or request required or permitted to be given
by either the Company or the Subscriber pursuant to the terms of
this Agreement shall be in writing and shall be deemed given when
delivered personally or by facsimile, with a hard copy to follow
by two day courier addressed to the parties at the addresses of
the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
Copies of all notices to the Subscriber shall be sent to its
designee or representative.
(b) Each party shall indemnify the other against any loss, cost or
damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty,
covenant or agreement in this Agreement.
10. Counterparts
This Agreement may be executed in any number of counterparts each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one
instrument.
11. Survival; Severability; Specific Performance
The representations, warranties, covenants and agreements of the
parties hereto shall survive the Closing for a period of four (4)
years (except for the covenants contained in Sections 4.2, 4.3, 4.4
and 4.5 which shall survive indefinitely). In the event that any
provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said
provision. Notwithstanding anything in this Agreement, the Warrants,
the Registration Rights Agreement or the Certificate of Designation to
the contrary, nothing shall limit the Subscriber's right to pursue any
and all available remedies, whether at law or at equity (including,
without limitation, specific performance), in connection therewith.
12. Title and Subtitles
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.
<PAGE>
Page 43 of 81 Pages
13. Amount; Delivery
The undersigned hereby subscribes for ___________ shares of Preferred
Stock and Warrants to purchase _________shares of Common Stock pays
herewith funds in the amount of ______________________.
The Company hereby delivers to the undersigned the Preferred Stock
purchased by the Subscriber, together with such Warrants, if any,
which the undersigned is acquiring upon initial issuance of the
Preferred Stock.
<PAGE>
Page 44 of 81 Pages
Name of Subscriber:
By:
---------------------------------------
Name:
Title:
Date of Subscription: January 23, 1997
----------------
Place of Execution: New York, New York
------------------
Place of Organization or Citizenship:
--------------------------------------------
Place of Residency and/or Principal
Place of Business:
(Telephone):
-------------------------------
(Fax):
-------------------------------------
Registration Instructions:
-----------------
(Name)(Please Print):
----------------------
<PAGE>
Page 45 of 81 Pages
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 23rd DAY OF JANUARY, 1997.
GEOTEK COMMUNICATIONS, INC.
By:
---------------------------------------
--------------------------------------------
Name:
Title:
Page 46 of 81 Pages
EXHIBIT R
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN APPLICABLE EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
Right to Purchase ________ Shares of
Common Stock of
Geotek Communications, Inc.
-------------------------
Common Stock Purchase Warrant
Geotek Communications, Inc., a Delaware corporation having an address
at 20 Craig Road, Montvale, New Jersey 07645 (the "Company"), hereby certifies
-------
that for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, _____________________________, having an address at
__________________________________ ("Purchaser") or any other Warrant Holder is
---------
entitled, on the terms and conditions set forth below, to purchase from the
Company at any time after the date hereof and ending forty-eight (48) months
after the date hereof, ____________________________ (_______) shares of fully
paid and nonassessable shares of Common Stock, $.01 par value, of the Company
(the "Common Stock"), at the Purchase Price (hereinafter defined), as the same
------------
may be adjusted pursuant to Section 5 herein.
1. Definitions.
-----------
(a) the term "Warrant" shall mean this Common Stock Purchase Warrant.
-------
(b) the term "Warrant Holder" shall mean the Purchaser or any assignee
--------------
of all or any portion of this Warrant at any given time who, at the time of
<PAGE>
Page 47 of 81 Pages
assignment, acquired the right to purchase at least 20,000 Warrant Shares (such
number being subject to adjustment after the date hereof pursuant to Section 5
herein.)
(c) the term "Warrant Shares" shall mean the shares of Common Stock or
--------------
other securities issuable upon exercise of this Warrant.
(d) the term "Purchase Price" shall mean ____ United States Dollars
---------------
and ________ Cents ($_____) per share of Common Stock, as adjusted upon any
stock split, split up, recapitalization or other reorganization with respect to
the Common Stock.
(e) the term "Act" shall mean the Securities Act of 1933, as amended.
---
(f) the term "Exchange Act" shall mean the Securities and Exchange Act
------------
of 1934, as amended.
(g) the term "SEC" or "Commission" shall mean the Securities and
--- ----------
Exchange Commission or any successor agency.
(h) the term "Rule 144" shall mean Rule 144 promulgated under the Act,
--------
as amended, and any successor rules promulgated under the Act.
(i) other terms used herein which are defined in that certain
Convertible Securities Subscription Agreement, dated January 23, 1997 (the
"Subscription Agreement"), between the Company and the initial purchasers of the
----------------------
Company's Series P Convertible Preferred Stock shall have the same meanings
herein as therein.
2. Exercise of Warrant.
-------------------
This Warrant may be exercised by the Warrant Holder, in whole or in
part, at any time and from time to time by surrender of this Warrant, together
with the form of exercise at the end hereof duly executed by the Warrant Holder,
and delivery of the Purchase Price for such Warrant Shares to the Company, at
the Company's principal office. In the event that the Warrant is not exercised
in full, the number of Warrant Shares shall be reduced by the number of such
Warrant Shares for which this Warrant is exercised, and the Company, at its
expense, shall forthwith issue and deliver to or upon the order of the Warrant
Holder a new Warrant of like tenor in the name of the Warrant Holder or as the
Warrant Holder (upon payment by the Warrant Holder of any applicable transfer
taxes) may request, reflecting such adjusted Warrant Shares.
<PAGE>
Page 48 of 81 Pages
3. Delivery of Stock Certificates.
------------------------------
(a) Subject to the terms and conditions of this Warrant, as soon
as practicable after the exercise of this Warrant in full or in part, and in any
event within two (2) business days thereafter, the Company at its expense
(including, without limitation, the payment by it of any applicable issue taxes)
will cause to be issued in the name of and delivered to the Warrant Holder, or
as the Warrant Holder (upon payment by the Warrant Holder of any applicable
transfer taxes) may lawfully direct, a certificate or certificates for the
number of fully paid and non-assessable shares of Common Stock to which the
Warrant Holder shall be entitled on such exercise, together with any other stock
or other securities or property (including cash, where applicable) to which the
Warrant Holder is entitled upon such exercise.
(b) This Warrant may not be exercised as to fractional shares of
Common Stock. In the event that the exercise of this Warrant, in full or in
part, would result in the issuance of any fractional share of Common Stock, then
the number of Warrant Shares for which this Warrant shall have been exercised
shall be rounded up or down to the nearest whole number of Warrant Shares.
(c) Upon the exercise of this Warrant in full, or its exchange
pursuant to clause (ii) of paragraph (d) of Section 5 below, or the issuance of
any replacement Warrant pursuant to Section 9 hereof, this Warrant and rights of
the Warrant Holder relating to its exercise and the right of the Warrant Holder
to receive any additional shares of the Company's Common Stock under the terms
of this Warrant shall terminate.
(d) Notwithstanding anything in this Section 3 to the contrary,
in the event a Warrant Holder instructs the Company in writing at the time of
exercise of this Warrant Holder not to issue all or any portion of the shares of
Common Stock to which such holder is entitled upon exercise hereof or the
Company determines that it is prohibited from issuing all or any portion of such
shares of Common Stock, in any such case, due to the requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the Company shall promptly deliver certificates representing such portion
of the shares of Common Stock that may be issued without compliance with the HSR
Act and shall refrain from issuing any additional shares of Common Stock
<PAGE>
Page 49 of 81 Pages
issuable to such Warrant Holder with respect to such exercise until permitted to
do so under the HSR Act. In the event any portion of this Warrant is not
exercised as a result of this paragraph, the date of exercise of this Warrant
shall remain unchanged and the Warrant Holder shall be treated as a holder of
the Common Stock issuable upon such exercise as of such exercise date for all
purposes (including, without limitation, for purposes of participating in any
stock splits, distributions, reorganizations or reclassifications having a
record date for determining Common Stockholders entitled to participate therein
as of or after such exercise date); provided, however, that no such Warrant
Holder shall be entitled to vote any shares of Common Stock that have not been
so issued prior to the date of the meeting or the consent at which the vote of
holders of Common Stock is counted and provided, further, that no distributions
so payable with respect to any such shares of Common Stock shall be paid until
the issuance of the Common Stock to which such distribution relates.
4. Covenants Of the Company.
------------------------
(a) The Company shall use its reasonable best efforts to insure
that a Registration Statement under the Act covering the issuance of the Warrant
Shares and the resale or other disposition thereof by the Warrant Holder is
effective as provided in the Registration Rights Agreement.
(b) The Company shall take all necessary action and proceedings
as may be required and permitted by applicable law, rule and regulation,
including, without limitation the notification of the National Association of
Securities Dealers, Inc., for the legal and valid issuance of this Warrant and
the Warrant Shares to the Warrant Holder under this Warrant.
(c) From the date hereof through the last date on which this
Warrant is exercisable, the Company shall take all steps reasonably necessary
and within its control to insure that the Common Stock remains listed on either
the Nasdaq National Stock Market, the American Stock Exchange or the New York
Stock Exchange (collectively, the "Exchange") and shall not amend its
--------
Certificate of Incorporation or By-laws so as to adversely affect in any
material way any rights of the Warrant Holder under this Warrant.
(d) The Company shall at all times reserve and keep available,
solely for issuance and delivery as Warrant Shares hereunder, such shares of
Common Stock as shall from time to time be issuable as Warrant Shares.
(e) The Warrant Shares, when issued in accordance with the terms
hereof, will be duly authorized and, when issued in accordance with the terms
hereof, shall be validly issued, fully paid, non-assessable, free and clear of
any liens created by the Company and shall be, as long as the Warrant Shares are
subject to an effective registration statement or the applicable SEC Rule 144(k)
<PAGE>
Page 50 of 81 Pages
waiting period has expired, free of any restrictive legends. The Company has
authorized and reserved for issuance to the Warrant Holder the requisite number
of shares of Common Stock to be issued pursuant to this Warrant.
(f) With a view to making available to the Warrant Holder the
benefits of Rule 144 promulgated under the Act and any other rule or regulation
of the SEC that may at any time permit the Warrant Holder to sell securities of
the Company to the public without registration, the Company agrees to use its
reasonable best efforts to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144, at all times;
(ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the Exchange Act;
and
(iii) furnish to any Warrant Holder forthwith upon request a
written statement by the Company that it has complied with the
reporting requirements of Rule 144 and of the Act and the Exchange
Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed by the Company
as may be reasonably requested to permit any such Warrant Holder to
take advantage of any rule or regulation of the SEC permitting the
selling of any such securities without registration.
(g) For purposes of complying with any applicable provisions of
the HSR Act, each Warrant Holder and 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 and its affiliates which is necessary for
the 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 a Warrant Holder is required to file a premerger notification
under the HSR Act with respect to the exercise of this Warrant, the Warrant
Holder and the Company shall promptly prepare and make all such required filings
and shall request early termination of the waiting period with respect thereto.
5. Adjustment of Exercise Price and Number of Shares. The number of
--------------------------------------------------
and kind of securities purchasable upon exercise of this Warrant and the
Purchase Price shall be subject to adjustment from time to time as follows:
<PAGE>
Page 51 of 81 Pages
(a) Subdivisions, Combinations and Other Issuances. If the
--------------------------------------------------
Company shall at any time after the date hereof but prior to the expiration of
this Warrant subdivide its outstanding securities as to which purchase rights
under this Warrant exist, by split-up or otherwise, or combine its outstanding
securities as to which purchase rights under this Warrant exist, the number of
Warrant Shares as to which this Warrant is exercisable as of the date of such
subdivision, split-up or combination shall forthwith be proportionately
increased in the case of a subdivision, or proportionately decreased in the case
of a combination. Appropriate adjustments shall also be made to the purchase
price payable per share, but the aggregate purchase price payable for the total
number of Warrant Shares purchasable under this Warrant as of such date shall
remain the same.
(b) Stock Dividend. If at any time after the date hereof the Company
---------------
declares a dividend or other distribution on Common Stock payable in Common
Stock or other securities or rights convertible into or exchangeable or
exercisable for Common Stock ("Common Stock Equivalents") without payment of any
------------------------
consideration by holders of Common Stock for the additional shares of Common
Stock or the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon exercise or conversion thereof), then the number of shares
of Common Stock for which this Warrant may be exercised shall be increased as of
the record date (or the date of such dividend distribution if no record date is
set) for determining which holders of Common Stock shall be entitled to receive
such dividends, in proportion to the increase in the number of outstanding
shares (and shares of Common Stock issuable upon conversion of all such
securities convertible into Common Stock) of Common Stock as a result of such
dividend, and the Purchase Price shall be adjusted so that the aggregate amount
payable for the purchase of all the Warrant Shares issuable hereunder
immediately after the record date (or on the date of such distribution, if
applicable) for such dividend shall equal the aggregate amount so payable
immediately before such record date (or on the date of such distribution, if
applicable).
(c) Other Distributions. If at any time after the date hereof the
--------------------
Company distributes to holders of its Common Stock, other than as part of its
dissolution, liquidation or the winding up of its affairs, any shares of its
capital stock, any evidence of indebtedness or any of its assets (other than
cash, Common Stock or securities convertible into Common Stock), then the per
share Purchase Price of this Warrant shall be adjusted so that the same shall
equal the price determined by multiplying the Purchase Price in effect
immediately prior to the date of such distribution by a fraction whose numerator
shall be the closing price per share of Common Stock on the Exchange on the
effective date of distribution less the then fair market value (as determined by
the Company's Board of Directors and the Holder or, if they cannot agree, by a
<PAGE>
Page 52 of 81 Pages
mutually acceptable third party at the Company's expense) of the capital stock,
or evidences of indebtedness or other assets so distributed with respect to each
share of Common Stock and whose denominator shall be such closing price per
share of the Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall be retroactively effective as of immediately
after the record date for the determination of stockholders entitled to receive
such distribution.
(d) Merger, etc. If at any time after the date hereof there shall be a
-----------
merger or consolidation of the Company with or into or a transfer of all or
substantially all of the assets of the Company to another entity, then before
such transaction may be consummated and become effective, the Warrant Holder
shall have received (1) prior notice thereof at such time as notice thereof
shall be publicly released or furnished to its stockholders generally by the
Company, whichever is earlier, and (2) such information with respect such
transaction as is furnished by the Company, or otherwise made available, to its
stockholders generally, all at the time such information is so furnished to the
Company's stockholders and, in any event, sufficiently prior to such transaction
becoming effective in order to give the Holder a reasonable opportunity to
decide upon and make the election hereinafter provided, and the Warrant Holder
shall be entitled to receive upon such transfer, merger or consolidation
becoming effective, at the election of the Warrant Holder made prior to the same
becoming effective, either (i) upon payment of the Purchase Price then in
effect, the number of shares or other securities or property of the Company or
of the successor corporation resulting from such merger or consolidation, which
would have been received by Warrant Holder for the shares of stock subject to
this Warrant had this Warrant been exercised just prior to such transfer, merger
or consolidation becoming effective or to the applicable record date thereof, as
the case may be, or (ii) a warrant to acquire common stock or other securities
of such other entity at an exercise price and upon such other terms as will
provide the Warrant Holder with economic and other benefits and rights
substantially equivalent to those provided herein.
(e) Reclassification, etc. If at any time after the date hereof there
----------------------
shall be a reorganization or reclassification of the securities as to which
purchase rights under this Warrant exist into the same or a different number of
securities of any other class or classes, then the Warrant Holder shall
thereafter be entitled to receive upon exercise of this Warrant, during the
period specified herein and upon payment of the Purchase Price then in effect,
the number of shares or other securities or property resulting from such
reorganization or reclassification, which would have been received by the
Warrant Holder for the shares of stock subject to this Warrant had this Warrant
at such time been exercised.
<PAGE>
Page 53 of 81 Pages
(f) Purchase Price Adjustment. In the event that the Company at any
---------------------------
time after the date hereof issues or sells any Common Stock or securities which
are convertible into or exchangeable for its Common Stock, or any warrants or
other rights to subscribe for or to purchase, or any options for the purchase
of, its Common Stock or any such convertible or exchangeable securities (other
than in connection with a public offering, the Preferred Stock, the warrants to
be issued by the Company in conjunction with the Preferred Stock, shares or
options issued or which may be issued pursuant to the Company's employee or
director option plans or shares issued upon exercise of options, warrants or
rights, or upon exercise, conversion or exchange of securities convertible into
or exercisable or exchangeable for other securities of the Company, whether now
or hereafter outstanding, or pursuant to the terms of the Preferred Stock
outstanding on the date of the Subscription Agreement and listed in the Exchange
Act Reports) at an effective purchase price per share which is less than the
Purchase Price then in effect or the fair market value, whichever is lower, of
the Common Stock on the trading day next preceding such issue or sale, then in
each such case, the Purchase Price in effect immediately prior to such issue or
sale shall be reduced effective concurrently with such issue or sale to an
amount determined by multiplying the Purchase Price then in effect by a
fraction, (x) the numerator of which shall be the sum of (1) the number of
shares of Common Stock outstanding immediately prior to such issue or sale, plus
----
(2) the number of shares of Common Stock which the aggregate consideration
received by the Company for such additional securities would purchase at such
fair market value or Purchase Price, as the case may be, then in effect, plus
----
(3) the number of shares of Common Stock issuable upon exercise, conversion or
exchange of all of the Company's then outstanding convertible securities which
are, as of the time of the new issuance, convertible or exchangeable into the
Company's Common Stock; and (y) the denominator of which shall be the sum of (1)
the number of shares of Common Stock of the Company outstanding immediately
after such issue or sale plus (2) the number of shares of Common Stock issuable
----
upon exercise, conversion or exchange of all of the Company's then outstanding
convertible securities which are, as of the time of the new issuance,
convertible or exchangeable into the Company's Common Stock.
In the event of any such issuance for a consideration which is less
than such fair market value and also less than the Purchase Price then in
effect, then there shall be only one such adjustment by reason of such issuance,
such adjustment to be that which results in the greatest reduction of the
Purchase Price computed as aforesaid. For the purposes of this Section 5(f), the
"aggregate consideration received by the company" is equal to the total amount,
if any, received or receivable by the Company as consideration for the issuance
or sale of all such securities, plus the minimum aggregate amount of additional
<PAGE>
Page 54 of 81 Pages
consideration, if any, payable to the Company upon the exercise, conversion or
exchange thereof at the time such securities first become exercisable,
convertible or exchangeable.
6. No Impairment. The Company will not, by amendment of its
--------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Warrant Holder
against impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, and (b) will take all such action as
may be reasonably necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant.
7. Notice of Adjustments; Notices. Whenever the Purchase Price or
--------------------------------
number of Shares purchasable hereunder shall be adjusted pursuant to Section 5
hereof, the Company shall execute and deliver to the Warrant Holder a
certificate setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated and the Purchase Price and number of shares purchasable hereunder
after giving effect to such adjustment, and shall cause a copy of such
certificate to be mailed (by first class mail, postage prepaid) to the Warrant
Holder.
8. Rights As Stockholder. Prior to exercise of this Warrant, the
----------------------
Warrant Holder shall not be entitled to any rights as a stockholder of the
Company with respect to the Warrant Shares, including (without limitation) the
right to vote such shares, receive dividends or other distributions thereon or
be notified of stockholder meetings. However, in the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right (other than a right to
vote), the Company shall mail to each Warrant Holder, at least ten (10) days
prior to the date specified therein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right.
<PAGE>
Page 55 of 81 Pages
9. Replacement of Warrant. On receipt of evidence reasonably
------------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Warrant and, in the case of any such loss, theft or destruction of the Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company, upon receipt by it of a
form of Warrant reflecting the terms of the new Warrant, at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
10. Specific Enforcement; Consent to Jurisdiction.
---------------------------------------------
(a) The Company and the Warrant Holder acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Warrant were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Warrant and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which either of them may be entitled by
law or equity.
(b) Each of the Company and the Warrant Holder (i) hereby
irrevocably submits to the jurisdiction of the Supreme Court of the State of New
York and the United States District Court for the Southern District of New York
for the purposes of any suit, action or proceeding arising out of or relating to
this Warrant and (ii) hereby waives, and agrees not to assert in any such suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Warrant Holder consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address in effect for notices to it under this Warrant and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing in this paragraph shall affect or limit any right to
serve process in any other manner permitted by law.
11. Entire Agreement; Amendments. This Warrant and the provisions
------------------------------
contained in the Subscription Agreement, the Registration Rights Agreement or
the Certificate of Designation and incorporated into this Warrant and the
Warrant Shares contain the entire understanding of the parties with respect to
the matters covered hereby and thereby and, except as specifically set forth
herein and therein, neither the Company nor the Warrant Holder makes any
<PAGE>
Page 56 of 81 Pages
representation, warranty, covenant or undertaking with respect to such matters.
No provision of this Warrant may be waived or amended other than by a written
instrument signed by the party against whom enforcement of any such amendment or
waiver is sought.
12. Restricted Securities. Sections 2.1, 2.2, 2.3 and 2.4 of the
----------------------
Subscription Agreement are incorporated herein by reference and hereby made a
part hereof.
13. Notices. Any notice or other communication required or permitted
-------
to be given hereunder shall be in writing and shall be effective (a) upon hand
delivery or receipt by telex (with correct answer back received), telecopy or
facsimile at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received),
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
to the Company:
Geotek Communications, Inc.
20 Craig Road
Montvale, NJ 07645
Attn: General Counsel and
Secretary Fax: (201) 930-9614
with copies to:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Attn: Leonard M. Klehr, Esq.
Fax: (215) 568-6603
to the Warrant Holder:
<PAGE>
Page 57 of 81 Pages
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Fax: (___) ___-____
with copies to:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Fax: (___) ___-____
Either party hereto may from time to time change its address for notices under
this Section 13 by giving at least ten (10) days prior written notice of such
changed address to the other party hereto.
14. Miscellaneous. This Warrant and any term hereof may be changed,
-------------
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of New York. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
15. Expiration. The right to exercise this Warrant shall expire
----------
forty-two (42) months after the date hereof; provided, however, that such period
-------- -------
shall be increased by and for the number of days during which the Warrant Holder
is precluded from exercising this Warrant because of any set-off period,
black-out period, failure of the Company to have filed or accurately maintained
effective registration of the Registration Statement or otherwise.
16. Transfer Restrictions.
(a) Neither this Warrant nor the securities issuable upon
exercise hereof may be transferred, disposed of or encumbered (any such action,
<PAGE>
Page 58 of 81 Pages
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 issuance of the
Warrant Shares, this Warrant may only be transferred to an "Accredited Investor"
(as defined in the Securities Act) and the Company may require the Warrant
Holder 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.
(b) This Warrant may not be sold or otherwise transferred to a
competitor of the Company engaged in, or to the knowledge of the holder of this
Warrant, planning to engage in the business of providing wireless voice or data
communications services to mobile customers or of providing equipment in
connection therewith.
<PAGE>
Page 59 of 81 Pages
Dated: ______ __, ____ GEOTEK COMMUNICATIONS, INC.
By: ____________________________
Name:
Title:__________________________
[CORPORATE SEAL]
Attest:
By:_______________________
Its:
NAME OF INVESTOR:
-----------------------
By its:
By: ____________________________
Name:
Title:__________________________
<PAGE>
Page 60 of 81 Pages
FORM OF WARRANT EXERCISE
(To be signed only on exercise of Warrant)
TO _________________________
The undersigned, the holder of the within Warrant, hereby
irrevocably elects to exercise this Warrant for, and to purchase thereunder,
_________ shares of Common Stock of Geotek Communications, Inc., a Delaware
corporation (the "Company"), and herewith makes payment of $__________ therefor,
and requests that the certificates for such shares be issued in the name of, and
delivered to _________________, whose address is
__________________________________.
Dated: __________________________________
(Signature must conform to name of holder as
specified on the face of the Warrant)
----------------------------------
(Address)
Tax Identification Number:________
<PAGE>
Page 61 of 81 Pages
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto
_________________ the right represented by the within Warrant to purchase
_____________ shares of Common Stock of Geotek Communications, Inc., a Delaware
corporation, to which the within Warrant relates, and appoints _________________
Attorney to transfer such right on the books of Geotek Communications, Inc.,
with full power of substitution in the premises.
Dated:
----------------------------------
(Signature must conform to name of holder
as specified on the face of the Warrant)
----------------------------------
(Address)
Signed in the presence of:
- ----------------------------
Page 62 of 81 Pages
EXHIBIT S
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights
Agreement"), entered into as of January 23, 1997, between S-C Rig
Investments-III, L.P., Winston Partners II LLC, Winston Partners II LDC, Winston
Partners L.P. (collectively, the "Purchaser"), and Geotek Communications, Inc.,
a Delaware corporation with its principal office at 20 Craig Road, Montvale, New
Jersey 07645 (the "Company").
W I T N E S S E T H:
WHEREAS, pursuant to a Convertible Securities Subscription Agreement,
dated as of January 23, 1997 (the "Agreement"), by and between the Company and
the Purchaser, the Company has agreed to sell and the Purchaser has agreed to
purchase U.S.$25,000,000 of the Company's Series P Convertible Preferred Stock
at a price of $50,000 per share (the "Preferred Stock") convertible into shares
of the Company's Common Stock, $.01 par value (the "Shares");
WHEREAS, pursuant to the Agreement, the Company is issuing warrants
for the purchase of the Shares and pursuant to the Company's Certificate of
Designation of Series P Convertible Preferred Stock (the "Certificate of
Designation"), the Company is required to issue to the holders of the Preferred
Stock certain other warrants for the purchase of the Shares upon the Company's
redemption of the Preferred Stock (collectively, the "Warrants");
WHEREAS, pursuant to the terms of and in partial consideration for,
the Purchaser's agreement to enter into the Agreement, the Company has agreed to
provide the Purchaser with certain registration rights with respect to the
Shares and other shares of Common Stock issuable upon conversion or exercise of
securities of the Company currently held by the Purchaser (collectively, the
"Existing Securities") ;
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in the
Agreement, Certificate of Designation and this Registration Rights Agreement,
the Company and the Purchaser agree as follows:
<PAGE>
Page 62 of 81 Pages
1. Certain Definitions. As used in this Registration Rights Agreement,
--------------------
the following terms shall have the following respective meanings:
"SEC" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Registrable Securities" shall mean: (i) Shares issued to Purchaser or
its designee upon conversion, exercise or exchange of the Preferred Stock, the
Warrants or any Existing Securities or upon any stock split, stock dividend
(pursuant to the Certificate of Designation or otherwise), recapitalization or
similar event with respect to such Shares; (ii) any Shares issued to Purchaser
as dividends on the Preferred Stock or any Existing Securities; and (iii) any
securities issued or issuable to Purchaser or any Holder upon the conversion or
exercise or exchange of any Preferred Stock, Warrants, Existing Securities or
Shares.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with Purchaser's exercise of its registration rights under
this Registration Rights Agreement, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company and blue sky fees and expenses (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"Selling Expenses" shall mean all underwriting discounts and selling
commissions, if any, applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for Holder.
"Holder" shall include the Purchaser and any transferee of Preferred
Stock, Warrants, Existing Securities, Shares or Registrable Securities which
have not been sold to the public to whom the registration rights conferred by
this Registration Rights Agreement have been transferred in compliance with
Section 12 of this Registration Rights Agreement.
"Registration Statement" shall have the meaning set forth in Section
2(a) herein.
<PAGE>
Page 64 of 81 Pages
"Regulation D" shall mean Regulation D as promulgated pursuant to the
Securities Act, and as subsequently amended.
"Securities Act" shall mean the Securities Act of 1933, as amended.
2. The Registration Requirements. The Company represents and warrants
-------------------------------
that it is qualified and eligible to use the registration statement on Form S-3
under the Securities Act. The Company shall file and use its best efforts to
cause to become effective, as promptly as possible and in any event by the 90th
calendar day after the Closing Date, a registration statement on Form S-3 under
the Securities Act or, if Form S-3 is not then available, another appropriate
form covering the resale of the Shares issuable on conversion of the Preferred
Stock and upon exercise of the Warrants and shall take all action necessary to
qualify the Shares under state "blue sky" laws as hereinafter provided. The
Company shall use its diligent best efforts to effect the registration
contemplated by the foregoing (including, without limitation, the execution of
an undertaking to file post- effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) and as
would permit or facilitate the sale and distribution of all the Registrable
Securities in all states reasonably requested by the Holder for purposes of
maximizing the proceeds realizable by the Holder from such sale and
distribution. Such best efforts by the Company shall include, without
limitation, the following:
(a) The Company shall file (i) a registration statement with the
SEC pursuant to Rule 415 under the Securities Act on Form S-3
under the Securities Act and the Company shall use its best
efforts to qualify for the use of such Form (or in the event that
the Company is ineligible to use such form, such other form as
the Company is eligible to use under the Securities Act) covering
the Registrable Securities (other than the Registrable Securities
issuable upon conversion or exercise or otherwise with respect to
the Existing Securities) to be registered (the "Registration
Statement"); (ii) such blue sky filings as shall be reasonably
requested to permit such sales; provided, however, that the
-------- -------
Company shall not be required to register the Registrable
Securities in any jurisdiction that would subject it to general
service of process in any such jurisdiction where it is not then
so subject or subject the Company to any tax in any such
jurisdiction where it is not then so subject or to require the
Company to qualify to do business in any jurisdiction where it is
not then so qualified; and (iii) any required filings with the
Nasdaq National Market ("Nasdaq") and any exchange where the
Shares are traded, all as soon as practicable after the date
hereof. The Company shall use its best efforts to have such
<PAGE>
Page 65 of 81 Pages
Registration Statement and other filings declared effective as
soon thereafter as may be practicable.
(b) The Company shall enter into such customary agreements
(including a customary underwriting agreement with the
underwriter or underwriters, if any) and take all such other
reasonable actions, in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities and
in such connection whether or not the Registrable Securities are
to be sold in an underwritten offering, the Company shall:
(i) make such representations and warranties to the
Holder and the underwriter or underwriters, if any, in form
and substance and scope as are customarily made by issuers
to underwriters in secondary underwritten offerings;
(ii) cause to be delivered to the sellers of
Registrable Securities and the underwriter or underwriters,
if any, opinions of counsel to the Company, dated the date
of delivery of any Registrable Securities sold pursuant
thereto, which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriter or underwriters and the appointed representative
or counsel of the Holder, addressed to the Holder and each
underwriter:
(A) in the case of an underwritten offering,
covering the matters customarily covered in opinions
requested in secondary underwritten offerings; or
(B) in the case of any offering that is not
underwritten, covering the effectiveness of the
registration statement;
(iii) in the case of an underwritten offering, cause to
be delivered at the time of delivery of any Registrable
Securities sold pursuant thereto, letters from the Company's
independent certified public accountants addressed to the
Holder and each underwriter stating that such accountants
are independent public accountants within the meaning of the
Securities Act and the applicable published rules and
regulations thereunder, and otherwise in customary form and
covering such financial and accounting matters as are
customarily covered by letters of the independent certified
<PAGE>
Page 66 of 81 Pages
public accountants delivered in connection with secondary
underwritten public offerings;
(iv) if an underwriting agreement is entered into,
cause the same to set forth indemnification and contribution
provisions and procedures which are no less favorable to the
Holder and the Company than those contemplated by sections 8
and 9 hereof with respect to all parties to be indemnified
pursuant to such sections;
(v) deliver such documents and certificates as may be
reasonably requested by the Holder of the Registrable
Securities being sold or the managing underwriter or
underwriters, if any, to evidence compliance with clause (i)
above and with any customary conditions contained in the
underwriting agreement, if any, or other agreement entered
into by the Company;
the foregoing in this paragraph 2(b) shall be done at each
closing under any such underwriting or similar agreement or as
and to the extent required thereunder; provided, however, the
foregoing in paragraph 2(b) shall not be required on more than
two (2) occasions;
(c) The Company shall make available for inspection, review and
comment by a representative or representatives of the Holder, any
underwriter participating in any disposition pursuant to a
Registration Statement, and any attorney or accountant retained
by such Holder or underwriter, any such registration statement or
amendment or supplement or any blue sky, Nasdaq or other filing,
all financial and other records, pertinent corporate documents
and properties of the Company as they may reasonably request for
the purpose, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in
connection with such Registration Statement.
3. Underwritten Distribution. If the Holder intends to distribute the
--------------------------
Registrable Securities covered by a Registration Statement by means of an
underwriting, the Holder shall so advise the Company and, within thirty (30)
days of the date thereof and without limiting the generality of other provisions
hereof, the Company will prepare and file such amendment or amendments to the
Registration Statement and make such other filings as may be necessary or
appropriate to effect any such underwritten distribution. The managing
<PAGE>
Page 67 of 81 Pages
underwriter for any such distribution shall be an investment banking firm of
national reputation selected by the Holders participating in such distribution,
subject to the Company's consent, which shall not be unreasonably withheld.
4. Multiple Holders. If there is more than one Holder, such Holders shall
----------------
act with respect to their rights under this Registration Rights Agreement
according to the vote of a majority-in-interest.
5. Expenses of Registration. All Registration Expenses incurred in
--------------------------
connection with any registration, qualification or compliance pursuant to this
Registration Rights Agreement shall be borne by the Company, and all Selling
Expenses shall be borne by the Holder.
6. Registration Delay or Failure. The Company acknowledges that its
-------------------------------
failure to register the Registrable Securities in accordance with the Agreement
and this Registration Rights Agreement will cause the Holder to suffer damages
in an amount that will be difficult to ascertain. Accordingly the parties agree
that it is appropriate to include herein a provision for liquidated damages and
to compensate the Holder fairly for the additional risk undertaken by the Holder
resulting from the Company's delay or failure to effect such registration. The
parties acknowledge and agree that the liquidated damages provisions set forth
in the Agreement represent the parties' good faith effort to quantify such
damages and, as such, agree that the form and amount of such liquidated damages
are reasonable and will not constitute a penalty; provided, however, that
nothing in this Section 6 shall limit the Holder's right to pursue equitable
relief, including without limitation, specific performance.
(a) If the Registration Statement covering the resale of the Shares is
not declared effective by the one-hundred-twentieth (120th) calendar
day after the Closing Date, then the Applicable Percentages (as
defined in the Certificate of Designation) used in determining the
Conversion Date Market Price (as defined in the Certificate of
Designation) shall each be increased by two and one-half (2 1/2)
percentage points and the Applicable Percentages as so increased shall
then and thereafter be applicable to and upon conversion of the
Preferred Stock in lieu and in place of the Applicable Percentages set
forth in the Certificate of Designation.
(b) If such Registration Statement still has not been declared
effective by the one-hundred-fifty-first (151st) calendar day after
the Closing Date, then the Applicable Percentages, as theretofore
reduced pursuant to Section 6(a) hereof, shall be further increased by
two and one-half (2 1/2) percentage points, and, as further so
<PAGE>
Page 68 of 81 Pages
increased, shall then and thereafter be applicable to and upon
conversion of the Preferred Stock.
(c) On each succeeding thirtieth (30th) day after such
one-hundred-fifty-first (151st) calendar day after the Closing Date,
upon which such Registration Statement still has not become effective,
the Applicable Percentages as theretofore increased pursuant to
Sections 6(a) and 6(b) hereof shall be further increased by another
two (2) percentage points and, as further so increased, shall then and
thereafter be applicable to and upon conversion of the Preferred
Stock.
(d) For the avoidance of doubt, the Company shall not be subject to
any liquidated damages provisions under this Agreement with respect to
its failure to register on a timely basis any Shares issued or
issuable with respect to any Existing Securities.
7. Registration Procedures. In the case of each registration effected by
the Company pursuant to this Registration Rights Agreement, the Company will
keep the Holder advised in writing as to initiation of each registration and as
to the completion thereof. At its expense, the Company will use its best efforts
to:
(a) Keep such registration effective for the period of sixty (60)
months or until all the Securities are sold or eligible for sale
pursuant to Rule 144(k) of the SEC or any successor or similar
provision, whichever is earlier.
(b) Furnish such number of prospectuses and other documents incident
thereto as the Holder from time to time may reasonably request.
(c) Notify the Holder of any event or circumstance the result of which
is that the Company's Registration Statement or prospectus included
therein contains an untrue statement of material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading and shall (i) in the case
of any event or circumstance not provided for in clause (ii) below,,
within thirty (30) business days of such notification or (ii) in the
case of any acquisition, merger or other similar material transaction
requiring additional disclosure to correct any such untrue statement
or omission, within sixty (60) days of such notification, amend or
supplement the Registration Statement or prospectus to correct such
inaccuracy or disclose such development; provided, however, that upon
-------- -------
receipt of such notice, the Holder shall immediately discontinue
<PAGE>
Page 69 of 81 Pages
dispositions of Registrable Securities thereunder until the Holder's
receipt from the Company of a supplemented or amended prospectus and,
if so requested by the Company, the Holder shall deliver to the
Company all copies (other than permanent file copies in the Holder's
possession) of the prospectus covering the Registrable Securities
current at the time of receipt of such notice; and provided further,
that if the Registration Statement or prospectus is not amended or
supplemented so as to remedy any inaccuracy or disclose such
development by the thirtieth (30th) business day in the case of clause
(i), or the sixtieth (60th) business day in the case of clause (ii),
in each case, after notice of inaccuracy is given by the Company to
the Holder, then the Company shall issue Holder upon each subsequent
conversion by Holder of any Preferred Stock which was convertible into
Common Stock at any time from the applicable date upon which such
Registration Statement was required to be supplemented or amended
(i.e., the thirtieth (30th) business day or sixtieth (60th) business
day after notification, as the case may be) (the "Required
Registration Statement Amendment Date") until such date as the
Registration Statement is so amended (the "Registration Statement
Amendment Date"), such additional shares of Common Stock as would have
been issuable to the Holder upon such conversion had the Applicable
Percentage used in determining the Conversion Date Market Price for
such conversion been increased by the Amendment Penalty Discount in
the case of an event described in clause (i) or the Alternative
Penalty Discount in the case of an event described in clause (ii). As
used herein, (x) the "Amendment Penalty Discount" shall initially
equal zero percent (0%) on a Required Registration Amendment Date in
the case of an event described in clause (i) and shall increase by one
percent (1%) for every fifth (5th) business day thereafter until the
applicable Registration Statement Amendment Date and (y) the
Alternative Penalty Discount shall initially equal two and one-half
percent (2 1/2%) on a Required Registration Statement Amendment Date
with respect to an event described in clause (ii) and shall increase
by two and one-half percent (2 1/2%) on the thirtieth (30th) business
day thereafter if the applicable Registration Statement Amendment Date
has not then occurred and shall increase by two percent (2%) for every
thirtieth (30th) business day thereafter until the applicable
Registration Statement Amendment Date. For the avoidance of doubt, the
Company shall not be required to issue any additional shares of Common
Stock under this Agreement for a failure to maintain the registration
of any Shares issued or issuable with respect to any Existing
Securities.
8. Indemnification.
---------------
<PAGE>
Page 70 of 81 Pages
(a) Company Indemnity. The Company will indemnify the Holder, each of
-----------------
its officers, directors and partners, and each person controlling the
Holder within the meaning of Section 15 of the Securities Act and the
rules and regulations thereunder with respect to which registration,
qualification or compliance has been effected pursuant to this
Registration Rights Agreement, and each underwriter, if any, and each
person who controls, within the meaning of Section 15 of the
Securities Act and the rules and regulations thereunder, any
underwriter, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained
in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to
any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the
Securities Act or any state securities law or in either case, any rule
or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse the
Holder, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses
reasonably incurred in connection with investigating and defending any
such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any
such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon written
information furnished to the Company by Holder or the underwriter and
stated to be specifically for use therein. The indemnity agreement
contained in this Section 8(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 will not be unreasonably withheld).
(b) Holder Indemnity. The Holder will, if Registrable Securities held
----------------
by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company,
each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter
within the meaning of Section 15 of the Securities Act and the rules
and regulations thereunder, each other Holder (if any), and each of
their officers, directors and partners, and each person controlling
such other Holder against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue
<PAGE>
Page 71 of 81 Pages
statement (or alleged untrue statement) of a material fact contained
in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to make the
statement therein not misleading and will reimburse the Company and
such other Holders and their directors, officers and partners,
underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information
furnished to the Company by Holder and stated to be specifically for
use therein; provided, however, that the obligations of Holder shall
not apply to amounts paid in settlement of any such claims, losses,
damages or liabilities if such settlement is effected without the
consent of Holder (which consent shall not be unreasonably withheld).
(c) Procedure. Each party entitled to indemnification under this
---------
Article (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim in any
litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at such party's
expense, and provided further that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Article except to the
extent that the Indemnifying Party is actually prejudiced by such
failure to provide notice. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified of a release
from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the
defense of such claim and litigation resulting therefrom.
<PAGE>
Page 72 of 81 Pages
9. Contribution. If the indemnification provided for in Section 8 herein
------------
is unavailable to the Indemnified Parties in respect of any losses, claims,
damages or liabilities referred to herein, then each such Indemnifying Party, in
lieu of indemnifying such Indemnified Party, shall contribute to the amount paid
or payable by such Indemnified party as a result of such losses, claims, damages
or liabilities (i) as between the Company and the Holder on the one hand and the
underwriters on the other, in such proportion as is appropriate to reflect the
relative benefits received by the Company and the Holder on the one hand or
underwriters, as the case may be, on the other from the offering of the
Registrable Securities, or if such allocation is not permitted by applicable
law, in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand and of the
Holder or underwriters, as the case may be, on the other, in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations and (ii) as
between the Company on the one hand and the Holder on the other, in such
proportion as is appropriate to reflect the relative fault of the Company and of
the Holder in connection with such statements or omissions.
The relative benefits received by the Company on the one hand and the
Holder or the underwriters, as the case may be, on the other shall be deemed to
be in the same proportion as (x) the proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by the Company from the initial sale of the Preferred Stock by the Company to
the Holder pursuant to the Agreement and from the exercise of the Warrants by
the Holder bear to (y) the gain realized by such Holder or the total
underwriting discounts and commissions received by the underwriters as set forth
in the table on the cover page of the prospectus, as the case may be. The
relative fault of the Company on the one hand and of the Holder or underwriters,
as the case may be, on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission to state a material fact relates to information supplied by the
Company, by the Holder or by the underwriters.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 9 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 8(a) or 8(b) hereof had been
available under the circumstances.
The Company and the Holder agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Holder or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
<PAGE>
Page 73 of 81 Pages
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to contribute any amount in excess of the amount by which (i) in the
case of the Holder, the net proceeds received by the Holder from the sale of
Registrable Securities or (ii) in the case of an underwriter, the total price at
which the Registrable Securities purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that the Holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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.
10. Survival. The Indemnity and contribution agreements contained in
--------
Sections 8 and 9 and the representations and warranties of the Company referred
to in Section 2(b)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Indemnified Party or by or on behalf of the Company and
(iii) the consummation of the sale or successive resales of the Registrable
Securities.
11. Information from Holder. The Holder shall furnish to the Company such
-----------------------
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
12. Transfer or Assignment of Registration Rights. The rights granted to
-----------------------------------------------
Purchaser by the Company under this Registration Rights Agreement to cause the
Company to register Registrable Securities, may be transferred or assigned to a
transferee or assignee, provided that the Company is given written notice by
Holder at the time of or within a reasonable time after said transfer or
assignment, stating the name and address of said transferee or assignee and
<PAGE>
Page 74 of 81 Pages
identifying the securities with respect to which such registration rights are
being transferred or assigned, and provided further that the transferee or
assignee of such rights is not deemed by the board of directors of the Company,
in its reasonable judgment, to be a competitor of the Company, and provided
further that the transferee or assignee of such rights agrees to be bound by
this Registration Rights Agreement.
13. Miscellaneous.
-------------
(a) Entire Agreement. This Registration Rights Agreement contains the
----------------
entire understanding and agreement of the parties, and may not be modified or
terminated except by a written agreement signed by both parties.
(b) Notices. Any notice or other communication required or permitted
-------
to be given hereunder shall be in writing and shall be effective (i) upon hand
delivery or delivery by telex (with correct answer back received), telecopy or
facsimile, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (ii) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
to the Company:
Geotek Communications, Inc.
20 Craig Road
Montvale, NJ 07645
Attention: General Counsel and Secretary
Fax: (201) 930-9614
with copies to:
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Attention: Leonard M. Klehr, Esq.
Fax: (215) 568-6603
to the Purchaser:
<PAGE>
Page 75 of 81 Pages
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Fax: (___) ___-____
with copies to:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Fax: (___) ___-____
with copies to:
Either party hereto may from time to time change its address for notices under
this Section 13(b) by giving at least 10 days' written notice of such changed
address to the other party hereto.
(c) Gender of Terms. All terms used herein shall be deemed to include
---------------
the feminine and the neuter, and the singular and the plural as the context
requires.
(d) Governing Law; Consent to Jurisdiction. This Registration Rights
--------------------------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to principles of conflicts of law or choice of
law, except for matters arising under the Securities Act or the Exchange Act
which matters shall be construed and interpreted in accordance with such Acts.
The Company hereby agrees that all actions or proceedings arising directly or
indirectly from or in connection with this Registration Rights Agreement shall,
at the Purchaser's sole option, be litigated only in the Supreme Court of the
State of New York or the United States District Court for the Southern District
of New York located in New York County, New York. The Company consents to the
jurisdiction and venue of the foregoing courts and consents that any process or
notice of motion or other application to either of said courts or a judge
thereof may be served inside or outside the State of New York or the Southern
District of New York by registered mail, return receipt requested, directed to
the Company at its address set forth in this Registration Rights Agreement (and
service so made shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other manner as may be
permissible under the rules of said court.
<PAGE>
Page 76 of 81 Pages
(e) Titles. The titles used in this Registration Rights Agreement are used for
------
convenience only and are not to be considered in construing or interpreting this
Registration Rights Agreement.
(f) Additional Registration Rights.
------------------------------
(ii) The Purchaser acknowledges that the Company does not have any
obligation to include any Registrable Securities issuable upon conversion,
exercise or otherwise with respect to the Existing Securities in the
registration statement as initially filed with the SEC pursuant to Section 2(a)
hereof. Notwithstanding the foregoing, in the event the Purchaser shall at any
time request in writing that the Company amend such registration statement to
include therein any or all of the Registrable Securities issuable upon
conversion, exercise or otherwise with respect to the Existing Securities, the
Company shall promptly take such actions to amend or otherwise effect the
inclusion of such Registrable Securities in such registration statement.
(ii) The Company has previously granted the Purchaser certain
registration rights with respect to Purchaser's Common Stock which it now owns
or hereafter acquires pursuant to each of those Stock Purchase Agreements dated
November 1, 1993 and September 28, 1994 (the "Stock Purchase Agreements"). The
Company acknowledges and agrees that the Registrable Securities actually issued
and issuable pursuant to the Preferred Stock and Warrants shall constitute
"Registrable Securities" for purposes of the Stock Purchase Agreements and
Holder shall be entitled to the rights set forth in Section 6 of each of the
Stock Purchase Agreements with respect to such Registrable Securities. For the
avoidance of doubt, all shares of Common Stock issuable upon conversion or
exercise of Preferred Stock and Warrants (whether or not such shares of Common
Stock have been issued) shall be counted as "secondary securities" (as defined
in the Stock Purchase Agreements) for purposes of determining the number of
secondary securities a holder may include in an underwritten offering pursuant
to Section 6.7 of the Stock Purchase Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
Page 77 of 81 Pages
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first above written.
GEOTEK COMMUNICATIONS, INC.
By: /s/
---------------------------------------
Name:
Title:
S-C RIG INVESTMENTS-III, L.P.
By: S-C Rig Co.
Its general partner
By: /s/ Peter Hurwitz
----------------------------------
Name: Peter Hurwitz
Title: Vice President
WINSTON PARTNERS II LLC
By: Chatterjee Advisors L.L.C.
Its manager
By: /s/ Peter Hurwitz
----------------------------------
Name: Peter Hurwitz
Title: Manager
WINSTON PARTNERS II LDC
By: /s/ Peter Hurwitz
---------------------------------------
Name: Peter Hurwitz
Title: Attorney-in-Fact
WINSTON PARTNERS L.P.
By: Chatterjee Fund Management, L.P.,
its general partner
By: /s/ Peter Hurwitz
----------------------------------
Name: Peter Hurwitz
Title: Attorney-in-Fact
Page 78 of 81 Pages
EXHIBIT T
January 23, 1997
Board of Directors
Geotek Communications, Inc.
20 Craig Road
Montvale, NJ 07645
Re: Regulation D Offering
---------------------
Ladies and Gentlemen:
Reference is made to the Convertible Securities Subscription Agreement
(the "Agreement") of even date and delivery herewith between the undersigned
persons, (each an "Investor" and collectively, the "Investors"), and Geotek
Communications, Inc. (the "Company"). Capitalized terms contained in this letter
shall have the same meanings ascribed to them in the Agreement.
In addition to the representations and covenants of the Investors
contained in the Agreement, the Company has required all Investors to execute
and deliver this letter pursuant to which the Investors further covenant and
agree as follows:
1. In the event that any Investor, individually or collectively with
any other Investor, engages in any Block Trade Sales (as hereinafter defined),
such Investor agrees to complete those Block Trade Sales at a price(s) which
would be (x) on a neutral or uptick versus the price of the last market
transaction in the Common Stock of the Company and (y) greater than the previous
day's closing market price of the Common Stock of the Company. For purposes
herein, Block Trade Sales shall mean any executed sale of more than 100,000
shares of the Common Stock of the Company.
2. In the event an Investor (or any of such Investor's affiliates)
engages in short sales transactions or other hedging activities during a day
which such Investor utilizes to determine the Conversion Date Market Price (the
"Pricing Period") which involve, among other things, sales of shares of the
Common Stock of the Company, the Investor will place (or shall cause its
affiliate to place) its sale orders for common stock in the course of such
activities so as not to complete or effect any such sale on any trading day
during the Pricing Period at a price which is lower than the lowest sale
effected on such day by persons other than the Investor and its affiliates. In
addition, in each computation of the Average Stock Price, each Investor agrees
to calculate the Average Stock Price without including any trades for common
stock that such Investor or any of its affiliates executed on the day utilized
<PAGE>
Page 79 of 81 Pages
in determining the Conversion Date Market Price.
3. Convertible Percentage. Unless the Company and holders of at least
66 2/3% of the Series P Preferred Stock of the Company (the "Preferred Stock")
otherwise agree, each holder of Preferred Stock may convert, in the aggregate,
not more than that percentage of Preferred Stock held by such holder set forth
in the column below (the "Convertible Percentage") opposite the time period
during which any Holder Conversion Date (as defined in the Certificate of
Designation) occurs; provided, however, that in the event the Company effects a
-------- -------
Disposition Transaction (as defined in the Certificate of Designation), the
Convertible Percentage shall become one hundred percent (100%) effective on the
date such Disposition Transaction is consummated:
- -------------------------------------------------------------------------------
Holder Conversion Date
(Number of Days after December 31, 1996) Percentage of all Preferred Shares
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
0 to 90 0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
91 to 180 20%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
181 to 365 50%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
366 to 540 80%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
541 and thereafter 100%
- -------------------------------------------------------------------------------
4. Except as permitted in Section 13 of the Certificate of Designation
for the Preferred Stock, during any Trading Restriction Period or any Stand-Off
Period (each as defined in the Certificate of Designation for the Preferred
Stock), each holder of Preferred Stock shall be prohibited from trading any
Common Stock. Notwithstanding the foregoing, nothing herein shall prevent a
holder of Preferred Stock from converting any shares of Preferred Stock or
exercising any Warrants during a Trading Restriction Period or a Stand-Off
Period.
5. No Investor shall effect any transfer of any share of Preferred
Stock unless, prior to and as a condition of such transfer, the proposed
transferee executes and delivers to the Company a counterpart of this letter
agreement agreeing to comply with and be bound by all of its terms; provided,
--------
however, that in the event that the proposed transferee is not an affiliate of
- -------
any of the Investors, such proposed transferee must execute and deliver to the
Company a letter agreement in the form of that certain Letter Agreement, dated
as of December 31, 1996, by and between the Company and the subscribers of the
Company's Series O Convertible Preferred Stock (the "Series O Letter
Agreement"), agreeing to comply and be bound by all of its terms with respect to
<PAGE>
Page 80 of 81 Pages
the Preferred Stock. A copy of the Series O Letter Agreement is attached hereto
as Exhibit A.
6. For purposes of complying with any applicable provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), each holder of Preferred Stock and 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 and its affiliates which is
necessary for the 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 a holder of Preferred Stock is
required to file a premerger notification under the HSR Act with respect to the
transactions contemplated by the Agreement, the holder of Preferred Stock and
the Company shall promptly prepare and make all such required filings and shall
request early termination of the waiting period with respect thereto.
7. For so long as an Investor owns any Preferred Stock, on the last
day of each quarterly calendar period beginning March 31, 1997, such Investor
shall deliver to the Company a certificate signed by one of its duly authorized
officers or agents stating that it has complied with all of the terms of this
letter agreement, or if it has not so complied, the details of each such
violation. An Investor's failure to deliver any such certificate under this
Section 7 shall not constitute a violation of this letter agreement for purposes
of Section 8 unless such failure continues for a period of ten (10) business
days after its receipt of notice from the Company of such failure.
8. In the event an Investor violates any of the terms of this letter
agreement, the Company shall be entitled, in addition to any other remedies
available to it, to recover from such Investor an amount equal to the greater of
(i) all profits derived by such Investor in the transactions conducted by such
Investor in violation of this letter agreement and (ii) $10,000 for each such
violation. Such amount shall be payable in United States dollars, free of any
tax or other deduction, and shall include interest from the date of the
applicable violation of this Agreement to the date on which the award is paid,
at a rate determined by the arbitrators referred to below.
9. The Company hereby agrees to seek the approval of its shareholders
at their annual meeting in 1997 of a vote approving the issuance of Common Stock
in conjunction with (i) the exercise of conversion rights contained in the
Certificate of Designation for the Preferred Stock and (ii) the exercise of
Warrants, in each case to the extent that the exercise of those rights would
result in the Company issuing a number of shares of Common Stock which exceeds
twenty percent (20%) of the Company's Common Stock outstanding as of the date
hereof.
<PAGE>
Page 81 of 81 Pages
10. Any claim, dispute or controversy arising out of or in connection
with this Agreement shall be settled by binding arbitration conducted in New
York, New York before three arbitrators, with each party appointing one
arbitrator and those two arbitrators choosing the third arbitrator. If a party
hereto fails to appoint an arbitrator within fifteen (15) days after receiving
notice of the other party's selection of an arbitrator, the last two arbitrators
shall be selected by the first arbitrator. Any arbitration hereunder shall be
conducted in accordance with the rules observed by the American Arbitration
Association. The parties hereto consent to the jurisdiction of the courts of the
Supreme Court of New York and the United States District Court for the Southern
District of New York for purposes of enforcement of any final award by the
arbitrators.
Very truly yours,
Investor:
By:
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Its:
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Agreed and accepted on January 23, 1997
GEOTEK COMMUNICATIONS, INC.
By:
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Title:
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