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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 31, 1996
GEOTEK COMMUNICATIONS, INC.
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(Exact name of registrant as specified in charter)
Delaware 0-17581 22-2358635
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(State or other juris- (Commission File Number) (IRS Employer Identi-
diction of incorporation) fication No.)
20 Craig Road, Montvale, New Jersey 07645
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(Address of principle executive offices) (Zip Code)
Registrant's telephone number, including area code 201-930-9305
N/A
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(Former name or former address, if changed since last report.)
Exhibit Index appears at page 7
Page 1 of 66 Pages
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Item 5. Other Events
On December 31, 1996, Geotek Communications, Inc. (the "Company") sold
to a group of accredited investors 1,000 shares of the Company's Series O
Convertible Preferred Stock (the "Series O Stock") and warrants (the "Warrants")
to purchase 1,700,000 shares of the Company's common stock, $.01 par value per
share ("Common Stock"), for an aggregate purchase price of $50,000,000. The
Company also agreed to sell to a group of investors affiliated with George Soros
and Purnendu Chatterjee, a director of the Company (the "Soros Group"), and the
Soros Group agreed to purchase from the Company, shares of a new class of
preferred stock (the "New Preferred Stock") and warrants to purchase 850,000
shares of Common Stock for an aggregate purchase price of $25,000,000. The New
Preferred Stock and warrants to be issued to the Soros Group shall contain terms
which are substantially similar to those set forth in the Series O Stock and
warrants issued in connection therewith.
Each share of Series O Stock has a stated value of $50,000. Dividends
accrue on the stated value of the Series O Preferred Stock at a rate of ten
percent (10%) per annum (twelve percent (12%) per annum after a dividend payment
failure) and are payable quarterly, at the Company's option, in either shares of
Common Stock or cash. Commencing April 1, 1997, each share of Series O Stock is
convertible by the holder thereof into such number of shares of Common Stock as
is obtained by dividing (x) the $50,000 stated value thereof plus all accrued
and unpaid dividends through the date of conversion by (y) the lowest daily
volume-weighted average price of the Company's Common Stock during the four (4)
business days immediately preceding conversion multiplied by the Conversion
Factor (as defined below); provided however, that holder of Series O Stock may
only convert up to a maximum of (i) 20% of such shares prior to June 29, 1997,
(ii) 50% of such shares prior to December 31, 1997, (iii) 80% of such shares
prior to June 29, 1998 and (iv) 100% thereafter. The Conversion Factor begins at
100% and becomes 95%, 90% and 88% on each of June 29, 1997, December 31, 1997
and June 29, 1998. In the event that the market price for a share of Common
Stock remains below $6.00 per share for five (5) consecutive trading days, the
Company may restrict holders from converting any shares of Series O Stock while
such market price remains below $6.00; provided, that the aggregate number of
days subject to all such conversion restriction periods may not exceed sixty
(60).
Based on a conversion price of $7.50 (the closing market price of the
Company's Common Stock on January 6, 1997), the Series O Stock and New Preferred
Stock would be convertible into an aggregate of 10,000,000 shares of Common
Stock. However, the actual number of shares of Common Stock issuable upon
conversion of the Series O Stock and New Preferred Stock will increase or
decrease based on the market price and Conversion Discount in effect at the time
of
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conversions. In this regard, the Company has agreed to seek the approval of its
stockholders at its 1997 annual meeting to issue in excess of 11,977,389 shares
of Common Stock (the "Threshold Amount") upon conversions of the Series O Stock
and the New Preferred Stock, if such issuances become necessary. If such
approval is not obtained and the Company has issued the Threshhold Amount upon
conversions of the Series O Stock and New Preferred Stock, the Company may be
required to purchase (for cash or other securities of the Company, at the
option of the Company) any shares of Series O Stock and New Preferred Stock
which then remain outstanding.
To the extent permissable under the Company's charter documents and
other agreements, holders of shares of Series O Stock also may cause the Company
to redeem purchase holders' shares in the event that (i) the Company's Common
Stock is not listed or eligible for trading for a designated period on the
NASDAQ National Market, the American Stock Exchange or the New York Stock
Exchange, (ii) a change of control of the Company occurs or (iii) the Company
violates certain provisions of the Certificate of Designation governing the
Series O Stock (the "Certificate of Designation"), including any purchase
effected by the Company as an alternative to any issuance of shares in excess of
the Threshold Amount. The purchase price per share of Series O Stock for any
purchase required by the Certificate of Designation is equal to 110% of the
stated value thereof plus, in each instance other than a change of control,
warrants to purchase 2,500 shares of Common Stock at a price equal to 130% of
the market price of a share of Common Stock at the time of the purchase.
The Company, at its option, may redeem all of the Series O Stock at
any time before June 30, 1997. The Company, at its option, may also redeem all
of the Series O Stock then outstanding (i) at any time prior to December 31,
1998 that the market price for shares of Common Stock is below $6.00 per share
(subject to certain adjustments for the number of shares outstanding) or (ii) on
December 31, 1998. The redemption price per share of Series O Stock for any
optional redemption permitted by the Certificate of Designation ranges from 110%
to 115% of the stated value thereof plus warrants to purchase between 1,833 and
2,500 shares of Common Stock at a price above the market price of a share of
Common Stock at the time of redemption.
The description of the Series O Stock set forth above is qualified in
its entirety by reference to the Certificate of Designation and the letter
agreement executed by each of the purchasers of the Series O Stock, copies of
which are attached hereto as Exhibits (c)(1) and (c)(2).
The Warrants are exercisable at any time before June 30, 2000 to
purchase shares of Common Stock at an exercise price of $9.2625 per share
(subject to adjustment in certain circumstances). The Form of Warrant is
attached hereto as Exhibit (c)(3).
Pursuant to a registration rights agreement (the "Registration Rights
Agreement"), the Company has agreed to file a registration statement under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
resale of the shares of Common Stock issuable (i) with respect to dividends
payable on the Series O Stock, (ii) upon conversion of the Series O Stock and
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(iii) upon exercise of the Warrants. If the Company fails to register such
shares of Common Stock prior to April 30 1997 or otherwise comply with the
procedures set forth in the Subscription Agreement within the time periods
prescribed by the Subscription Agreement, the Company will be subject to
substantial penalties. A copy of the Registration Rights Agreement is attached
hereto as Exhibit (c)(4).
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
(1) Certificate of Designation of Series O Convertible Preferred Stock.
(2) Form of letter agreement by and between the Company and each of the
purchasers of the Series O Stock.
(3) Form of Warrant.
(4) Form of Registration Rights Agreement by and among the Company and
the purchasers of the Series O Stock.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GEOTEK COMMUNICATIONS, INC.
Date: January 8, 1997 By: /s/ Michael H. Carus
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Name: Michael H. Carus
Title: Vice President and Chief Accounting Officer
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EXHIBIT INDEX
Exhibit No.
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(c)(1) Certificate of Designation of Series O Convertible Preferred
Stock.
(c)(2) Form of letter agreement by and between the Company and each
of the purchasers of the Series O Stock.
(c)(3) Form of Warrant.
(c)(4) Form of Registration Rights Agreement by and among the
Company and the purchasers of the Series O Stock.
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Exhibit (C)(1)
"CERTIFICATE OF DESIGNATION
OF SERIES O CONVERTIBLE PREFERRED
STOCK"
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CERTIFICATE OF DESIGNATION
of
SERIES O CONVERTIBLE PREFERRED STOCK
of
GEOTEK COMMUNICATIONS, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Geotek Communications, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Company"), hereby
certifies that the following resolutions were adopted by the Board of Directors
of the Company pursuant to authority of the Board of Directors as required by
Section 151 of the Delaware General Corporation Law:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Company (the "Board of Directors" or the "Board") in
accordance with the provisions of its Restated Certificate of Incorporation, the
Board of Directors hereby creates a series of the Company's previously
authorized Preferred Stock, par value $.01 per share (the "Preferred Stock"),
and hereby states the designation and number of shares, and fixes the relative
rights, preferences, privileges, powers and restrictions thereof as follows:
Series O Convertible Preferred Stock:
1. Definitions. For purposes hereof the following definitions
shall apply:
"Approved Underwriter" shall mean Goldman Sachs & Co.; Merrill
Lynch & Co.; Morgan Stanley & Co. Incorporated; Lehman Brothers Inc.; Smith
Barney Inc.; Salomon Brothers Inc.; J.P. Morgan & Co.; PaineWebber Incorporated;
Donaldson, Lufkin & Jenrette; Bear, Stearns & Co., Inc.; First Boston; Lazard
Freres; or any successor to or affiliate of any of them.
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"Average Stock Price" shall mean, as to any date, a price equal to
the lowest daily volume-weighted average price of the Common Stock on the
principal securities exchange or interdealer quotation system on which the
Common Stock is traded during the four (4) trading days immediately preceding
such date, as calculated by Bloomberg Financial Markets through its "Volume at
Price" function; provided, however, that no sales transactions by a converting
holder of the Series O Preferred Stock shall be given effect in calculating such
Average Stock Price insofar as it applies to that holder.
"Board" shall mean the Board of Directors of the Company.
"Closing Date" shall mean the date of original issuance of the
Series O Preferred Stock.
"Common Stock" shall mean the Common Stock, $.01 par value per
share, of the Company.
"Company" shall mean this corporation.
"Conversion Date Market Price" shall mean, at any Holder
Conversion Date, the Average Stock Price, discounted by the percentage set forth
in the table below (the "Applicable Percentage") opposite the period during
which such Holder Conversion Date shall have occurred; provided that the
Applicable Percentage shall be adjusted from time to time, as provided in the
Registration Rights Agreement dated December 31, 1996 between the Company and
the investors named therein.
Holder Conversion Date
(Number of Days after Original Issue Date) Applicable Percentage
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0 to 180 0%
181 to 365 5%
366 to 540 10%
541 and thereafter 12%
"Conversion Default" shall have the meaning set forth in Paragraph
9(b).
"Conversion Notice" shall have the meaning set forth in Paragraph
6(d).
"Conversion Rate" shall have the meaning set forth in Paragraph
6(c).
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"Designated Price" shall mean $50,000 per share, as adjusted
pursuant to the terms hereof, plus all accrued and unpaid dividends.
"Dividend Stock Price" shall mean, as to any date, the average of
the Market Price for Shares of Common Stock for the thirty (30) consecutive
trading days commencing forty-five (45) trading days prior to the applicable
date.
"Holder Conversion Date" shall have the meaning set forth in
Paragraph 6(d).
"Junior Stock" shall mean the Common Stock and, unless the holders
of Preferred Stock otherwise consent pursuant to Paragraph 5 hereof, all other
shares of any other class or series of the Company's capital stock hereafter
issued, other than (a) the Series O Preferred Stock, (b) Preferred Stock ranking
pari passu to the Series O Preferred Stock as permitted below or (c) Preferred
Stock ranking senior to the Series O Preferred Stock and authorized by the
holders of the Series O Preferred Stock in accordance with Section 5 hereof;
provided, however, the Company may from time to time, without the consent of the
holders of the outstanding shares of the Series O Preferred Stock, authorize,
create or issue additional series of Preferred Stock which rank pari passu to or
do not have preference over the Series O Preferred Stock in respect of
dividends, redemption or distribution upon liquidation.
"Market Price for Shares of Common Stock" shall mean the price of
one share of Common Stock determined as follows:
(i) If the Common Stock is listed on the Nasdaq National
Market, the daily closing price on the date of valuation;
(ii)If the Common Stock is listed on a national securities
exchange, the daily closing price on the date of valuation;
(iii) If neither (i) nor (ii) apply, but the Common Stock
is quoted on the Nasdaq Small Capital Market or the over-the-counter market on
the pink sheets or bulletin board, the daily closing price thereof on the date
of valuation; and
(iv) If neither clause (i), (ii) or (iii) above applies,
the market value as determined by a nationally recognized investment banking
firm or other nationally recognized financial advisor retained by the Company
for such purpose and reasonably acceptable to the holders of Series O Preferred
Stock, taking into consideration, among other factors, the earnings history,
book value and prospects for the Company, and the prices at which shares of
Common
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Stock recently have been traded. Such determination shall be conclusive and
binding on all persons.
"Original Issuance Market Price" shall mean an amount equal to the
Market Price for Shares of Common Stock on the Closing Date.
"Preferred Stock" shall mean the authorized shares of all series
of the preferred stock of the Company.
"Series O Preferred Stock" shall mean the Series O Convertible
Preferred Stock of the Company, $.01 par value per share.
"Trigger Price" shall mean $6.00 per share, as adjusted after the
original issuance date of the Series O Preferred Stock upon any stock split,
stock dividend, split up, recapitalization or other reorganization with respect
to the Common Stock.
"Underlying Stock" shall mean those shares of the Company's Common
Stock issuable upon (i) conversion of the Series O Preferred Stock and (ii)
exercise of any Warrants.
"Warrants" shall mean warrants issued by the Company in connection
with the issuance and redemption of the Series O Preferred Stock.
2. Designation and Number. The designation of the shares of Preferred Stock
authorized by these resolutions shall be "Series O Convertible Preferred Stock"
(the "Series O Preferred Stock"). The authorized number of shares constituting
the Series O Preferred Stock shall be one thousand (1,000) shares and each share
of Series O Preferred Stock shall rank equally in all respects.
3. Dividends. The Series O Preferred Stock shall accrue dividends at a rate
of ten percent (10%) per annum on the Designated Price. Dividends on the Series
O Preferred Stock shall accumulate and accrue from the date of its original
issue and shall accrue from day to day thereafter, whether or not earned or
declared. Dividends shall be payable, at the sole option of the Company,
quarterly, either (i) in cash or (ii) in that number of shares of Common Stock
purchasable by the amount of the cash dividend described in (i) above, at the
Dividend Stock Price as of the date such dividend is paid; provided, however,
that no fewer than five (5) trading days before commencement of the forty-five
(45) day period referenced in the definition of Dividend Stock Price, the
holders of the Series O Preferred Stock shall have received notice from the
Company specifying whether such dividend payment will be paid in cash or in
Common Stock. Dividends on the Series O Preferred Stock for any quarterly period
shall be declared by the
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Company and paid on the fifteenth (15th) day following the end of such quarter.
If the Company is prohibited from paying any dividends, either in cash or Common
Stock, or otherwise fails to pay such dividends, for any quarterly period, the
dividends shall be deemed to have accrued on such Series O Preferred Stock, and
shall be capitalized to the Series O Preferred Stock as of the last day of the
quarterly period, as if the dividend rate had been 12% per annum for such
quarterly period, and the Designated Price for each share of Series O Preferred
Stock shall be deemed to have been increased by the amount of such capitalized
dividends. For as long as any Series O Preferred Stock is outstanding, the
Company shall pay no dividends on Junior Stock, other than in shares of Junior
Stock, without having first obtained the consent of the holder or holders of a
majority of the Series O Preferred Stock then outstanding.
4. Liquidation Rights of Series O Preferred Stock. In the event of any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the holders of the Series O Preferred Stock then outstanding shall
be entitled to be paid out of the assets of the Company available for
distribution to its stockholders, whether such assets are capital, surplus, or
earnings, before any payment or declaration and setting apart for payment of any
amount shall be made in respect of any Junior Stock, an amount equal to the
Designated Price; provided, however, that upon the occurrence of any of the
events described in (i), (ii) and (iii) below, the holders of the Series O
Preferred Stock shall be entitled to an amount equal to the Redemption Price and
not to the Designated Price. If upon any liquidation, dissolution, or winding up
of the Company, whether voluntary or involuntary, the assets to be distributed
to the holders of the Series O Preferred Stock shall be insufficient to permit
the payment to such stockholders of the full preferential amounts aforesaid,
then all of the assets of the Company to be distributed shall be distributed
ratably to the holders of the Series O Preferred Stock and to any holders of any
series of Preferred Stock that ranks pari passu with the Series O Preferred
Stock, on the basis of the liquidation value of the shares of Preferred Stock
held. The Company shall promptly mail written notice of such liquidation,
dissolution or winding up (with a copy sent by facsimile), but in any event such
notice shall not be given less than thirty (30) days prior to the effective date
stated therein to each record holder of the Series O Preferred Stock. If the
Company determines to effect a liquidation, dissolution or winding up of the
Company, then, notwithstanding the limitations set forth in Paragraph 13 hereof,
the Series O Preferred Stock shall thereupon, at the option of a holder thereof,
be convertible in full, if so permitted by applicable law and if not otherwise
in violation of an agreement to which the Company is a party or of the Company's
Certificate of Incorporation or By-Laws; and further, if such liquidation,
dissolution or winding up of the Company occurs within six (6) months of the
Closing Date, then the Applicable Percentage used in determining the Conversion
Date Market Price as of the date of such event shall be five percent (5%), in
lieu and in place of the relevant Applicable Percentage set forth therein. For
purposes of this paragraph, (i) a sale or other disposition of all or
substantially all of the assets of the Company, (ii) a consolidation or merger
of the Company with or into any other
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corporation or other entity or person (whether or not the Company is the
surviving corporation, but other than a merger or consolidation whereby the
stockholders of the Company immediately preceding the merger or consolidation
continue to own greater than fifty percent (50%) of the voting securities of the
entity surviving such merger or consolidation), (iii) any person or any "group"
(as such term is used in such Section 13(d) of the Securities Exchange Act of
1934, as amended) becomes the beneficial owner of in excess of fifty percent
(50%) of the voting power of the Company's (or any successor entity's) capital
stock (each of (i) through (iii), a "Disposition Transaction"), shall, at the
option of each holder of Series O Preferred Stock, be deemed to be a
liquidation, dissolution or winding up of the Company with respect to the shares
of Series O Preferred Stock held by such holder.
5. Voting Rights. The holders of the Series O Preferred Stock will not have
any voting rights except as set forth below or as otherwise from time to time
required by law.
The affirmative approval (by vote or written consent as permitted by
applicable law) of the holders of at least 66 2/3% of the outstanding shares of
the Series O Preferred Stock, voting separately as a class, will be required for
(i) any amendment, alteration or repeal of the Company's Certificate of
Incorporation (including any Certificate of Designation, Rights and Preferences
for any other series of Preferred Stock) if the amendment, alteration or repeal
adversely affects the powers, preferences or rights of the Series O Preferred
Stock (including, without limitation, by creating any class or series of equity
securities having a preference over the Series O Preferred Stock with respect to
dividends, redemption, distribution upon liquidation or in any other respect);
or (ii) any amendment to or waiver of the terms of the Series O Preferred Stock
or this Certificate of Designation, provided, however, that no such approval
shall be required for the authorization, creation or issuance of any shares of
any additional series of Preferred Stock ranking pari passu to or which do not
have any preference over the Series O Preferred Stock in respect of dividends,
redemption or distribution upon liquidation. No approval of the holders of
Series O Preferred Stock shall be required for the Company to effect a
Disposition Transaction.
To the extent that under applicable law the approval of the holders of the
Series O Preferred Stock, voting separately as a class is required to authorize
a given action of the Company, the affirmative approval (by vote or written
consent as permitted by applicable law) of the holders of a majority of the
outstanding shares of the Series O Preferred Stock shall constitute the approval
of such action by the class. To the extent that under applicable law the holders
of the Series O Preferred Stock are entitled to vote on a matter with holders of
the Common Stock, voting together as one class, each share of Series O Preferred
Stock shall be entitled to that number of votes as shall be equal to the number
of shares of Underlying Stock into which such shares could have been converted
on the record date for any meeting of stockholders or on the date of any written
consent of stockholders, as applicable. Holders of the Series O Preferred Stock
shall be entitled
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to notice of all shareholder meetings or written consents (whether or not they
are entitled to vote thereat), which notice will be provided pursuant to the
Company's by-laws and applicable statutes.
6. Conversion. The holders of Series O Preferred Stock shall have the
following conversion rights.
(a) Holder's Right to Convert. Subject to the restrictions set
forth in Paragraphs 13 and 14(d) of this Certificate, each share of Series O
Preferred Stock shall be convertible in whole or in part and from time to time,
at the option of the holder thereof, into fully paid and nonassessable shares of
Common Stock.
(b) Mandatory Conversion. Subject to the provisions of Paragraph
13(d) hereof, on the fifth anniversary of its issuance (the "Mandatory
Conversion Date"), each and every share of Series O Preferred Stock shall be
converted into fully paid and nonassessable shares of Common Stock without any
action required to be taken by the holder thereof, and a Conversion Notice shall
be deemed to be given by the holder of each share of Series O Preferred Stock on
that date; provided, however, that no such mandatory conversion shall occur if,
as of the Mandatory Conversion Date, the Company is (i) insolvent, (ii) in
bankruptcy proceedings or (iii) in material breach of any of the terms of this
Certificate or of that certain Convertible Securities Subscription Agreement and
that certain Registration Rights Agreement, each of which is dated December 31,
1996, by and between the Company and the parties thereto.
(c) Conversion Price for Holder of Converted Shares. Each share of
the Series O Preferred Stock that is converted into shares of Common Stock shall
be convertible into the number of shares of Common Stock which may be purchased
by the Designated Price of such share of Series O Preferred Stock at the
Conversion Date Market Price. The number of shares of Common Stock into which
each share of Series O Preferred Stock may be converted pursuant to this
paragraph is hereafter referred to as the "Conversion Rate."
(d) Mechanics of Conversion. Unless conversion is mandatory in
accordance with Paragraph 6(b) hereof, in order to convert any or all shares of
Series O Preferred Stock into full shares of Common Stock, the holder shall
surrender the certificate or certificates therefor, duly endorsed, by either
overnight courier or two-day courier, to the principal office of the Company or
of any transfer agent for the Series O Preferred Stock, and shall give written
notice (the "Conversion Notice"), together with the holder's summary of its
trades on the relevant date utilized to determine the Average Stock Price with
respect to such conversion, its calculation of the Conversion Rate and the
number of shares of Common Stock issuable upon such conversion by facsimile
(with the original of such notice forwarded with the foregoing courier) to the
Company at such office, that he elects to convert the number of shares specified
therein, which
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such notice and election shall be irrevocable by the holder; provided, however,
that the Company shall not be obligated to issue certificates evidencing the
shares of the Common Stock issuable upon such conversion unless either the
certificates evidencing the shares of Series O Preferred Stock are delivered to
the Company or its transfer agent as provided above, or the holder notifies the
Company that such certificates have been lost, stolen or destroyed and promptly
executes an agreement reasonably satisfactory to the Company to indemnify the
Company from any loss incurred by it in connection with such certificates.
Immediately upon receipt of the Conversion Notice the
Company shall verify the holder's calculation of the Conversion Rate as
calculated by the holder or, if the Company disagrees with the holder's
calculation of the Conversion Rate, deliver by facsimile the Company's
calculation of the Conversion Rate. The Company shall use its best efforts to
issue and deliver as soon as possible, and in any event within two (2) business
days after delivery to the Company of certificates of the Series O Preferred
Stock to be converted or after receipt of such agreement and indemnification, to
such holder of Series O Preferred Stock at the address of the holder on the
stock books of the Company, or to its designee, a certificate or certificates
for the number of shares of Common Stock to which he shall be entitled as
aforesaid, together with a certificate or certificates for the number of Series
O Preferred Stock not submitted for conversion. The date on which the Conversion
Notice is given (the "Holder Conversion Date") shall be deemed to be the date
the Company received by facsimile the Conversion Notice, provided that the
original shares of Series O Preferred Stock to be converted, or the aforesaid
notice of lost, stolen or destroyed certificates, are received by the Company or
any transfer agent for the Series O Preferred Stock within five (5) business
days thereafter, and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on such date. If the
aforesaid notice of lost, stolen or destroyed certificates is not received by
the Company or any transfer agent for the Series O Preferred Stock within five
(5) business days after the Holder Conversion Date, the Conversion Notice shall
become null and void.
(e) Issue and Franchise Taxes. The Company shall be, and the
holders of Series O Preferred Stock shall not be, liable for any and all issue
and franchise taxes payable in respect of issuance and delivery of Common Stock
as contemplated by this Certificate.
7. Adjustments; Reorganizations.
(a) Adjustment for Stock Splits and Combinations. If the Company
at any time or from time to time after the Closing Date, during the period
running from a Holder Conversion Date up to and including the day after the date
on which the conversion has been effected, effects a subdivision or combination
of the outstanding Common Stock, the shares of Common Stock
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issuable upon the conversion and the Conversion Date Market Price in effect
shall be proportionately adjusted to reflect the split or reverse split, as the
case may be. Any adjustment under this Paragraph 7(a) shall become effective at
the close of business on the date the subdivision or combination becomes
effective.
(b) Adjustment for Certain Dividends and Distributions. If the
Company at any time or from time to time after the Closing Date, during the
period running from a Holder Conversion Date up to and including the day after
the date on which the conversion has been effected, makes, or fixes a record
date for the determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of Common Stock,
then, and in each such event, the dividend or distribution, as the case may be,
shall be made available to the holder effecting that conversion at the time at
which the conversion becomes effective.
(c) Adjustment for Other Dividends and Distributions. Subject to
the provisions contained in Paragraph 3 of this Certificate, in the event the
Company, at any time or from time to time after the Closing Date, makes or fixes
a record date for the determination of holders of Common Stock entitled to
receive an extraordinary dividend or other distribution payable in securities of
the Company other than shares of Common Stock, and not an episodic dividend or
distribution payable by the Company in the ordinary course, then and in each
such event provision shall be made so that the holders of Series O Preferred
Stock shall receive, upon conversion thereof pursuant to Paragraph 6 hereof, in
addition to the number of shares of Common Stock receivable thereon, the amount
of such other securities of the Company to which a holder on the relevant record
or payment date, as applicable, of the number of shares of Common Stock so
receivable upon conversion would have been entitled, plus any dividends or other
distributions which would have been received with respect to such securities had
such holder thereafter, during the period from the date of such event to and
including the Holder Conversion Date, retained such securities, subject to all
other adjustments called for during such period under this Section 7 with
respect to the rights of the holders of the Series O Preferred Stock.
(d) Adjustment for Reclassification, Exchange and Substitution. In
the event that at any time or from time to time after the Closing Date, the
Common Stock issuable upon the conversion of the Series O Preferred Stock is
changed into the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or reorganization
provided for elsewhere in this Paragraph 7), then and in each such event each
holder of Series O Preferred Stock shall have the right thereafter to convert
such stock into the kind of stock receivable upon such recapitalization,
reclassification or other change by holders of shares of Common Stock, all
subject to further adjustment as provided herein. In such event, it shall be a
condition precedent to any such transactions that the formula set forth herein
for conversion shall be equitably adjusted
<PAGE>
-10-
in a manner reasonably acceptable to the holders of Series O Preferred Stock to
reflect such change in number of shares or, if shares of a new class of stock
are issued to reflect the market price of the class of classes of stock
(applying the same factors used in determining the Market Price for Shares of
Common Stock) issued in connection with the above described transaction.
(e) Reorganization. If at any time or from time to time after the
Closing Date there is a capital reorganization of the Common Stock (other than a
recapitalization, subdivision, combination, reclassification, or exchange of
shares provided for elsewhere in this Paragraph 7), then as a part of such
reorganization, provision shall be made so that the holders of the Series O
Preferred Stock shall thereafter be entitled to receive upon conversion of the
Series O Preferred Stock the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock deliverable
upon conversion would have been entitled on such capital reorganization. In any
such case, it shall be a condition precedent to any such transactions that
appropriate adjustment be made in the application of the provisions of this
Paragraph 7 with respect to the rights of the holders of the Series O Preferred
Stock after the reorganization to the end that the provisions of this Paragraph
7 (including adjustment of the number of shares issuable upon conversion of the
Series O Preferred Stock) shall be applicable after that event and be as nearly
equivalent as may be practicable, including, by way of illustration and not
limitation, by equitably adjusting in a manner reasonably acceptable to the
holders of the Series O Preferred Stock the formula set forth herein for
conversion to reflect the market price of the securities or property (applying
the same factors used in determining the Market Price for Shares of Common
Stock) issued in connection with the above described transaction.
(f) Other Equity Offerings. In the event that the Company issues
or sells any shares of its securities which are convertible into or exchangeable
for its Common Stock or any convertible security, or any warrants or other
rights subscribed for or to purchase any options or the purchase of its Common
Stock or other securities (other than securities issued or which may be issued
in conjunction with a public offering or pursuant to the Company's employee or
director option plan or securities issued upon exercise, exchange or conversion
of securities convertible into or exercisable or exchangeable for other
securities of the Company, whether now or hereafter outstanding) (the "Equity
Securities") which provide for the issuance of shares of Common Stock upon
conversion or exchange of such security utilizing a conversion or exchange
discount per share which during any period is greater than the Applicable
Percentage applicable to the Series O Preferred Stock during such period, then,
for so long as any such Equity Securities remain outstanding, the Applicable
Percentage in respect of any conversion of Series O Preferred Stock during any
such period shall be equal to the discount applicable to the Equity Securities
during the relevant period.
<PAGE>
-11-
8. Fractional Shares. No fractional shares of Common Stock or scrip
representing fractional shares of Common Stock shall be issuable hereunder. The
number of shares of Common Stock that are issuable upon any conversion shall be
rounded up or down to the nearest whole share.
9. Reservation of Stock Issuable Upon Conversion.
(a) Reservation Requirement. The Company has reserved eight
million (8,000,000) 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 O Preferred Stock; 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 than two hundred percent (200%) of
that number of shares of the Company's Common Stock for which the Series O
Preferred Stock and the Warrants then convertible, 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 the Series O
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 O Preferred Stock.
(b) Default; Cure. If the Company does not have a sufficient
number of shares of Common Stock available to satisfy the Company's obligations
to a holder of Series O Preferred Stock upon receipt of a Conversion Notice
and/or holders of Warrants upon exercise thereof, or if the Company is otherwise
prohibited by applicable law or by the rules or regulations of any stock
exchange, interdealer quotation system or other self-regulatory organization
with jurisdiction over the Company or its securities from issuing all of the
Common Stock which is to be issued upon receipt of a Conversion Notice (each, a
"Conversion Default"), each holder of the Series O Preferred Stock shall have
the right to require the Company, if the Company is so permitted by applicable
law and if not otherwise in violation of any agreement to which the Company is a
party as of the date hereof or of the Company's Certificate of Incorporation or
By-Laws, to redeem such holder's pro rata portion of the Series O Preferred
Stock which the Company is then able to redeem, and to implement the cure
procedures set forth in Paragraph 15(c) hereof.
10. No Reissuance of Series O Preferred Stock. No share or shares of Series
O Preferred Stock acquired by the Company by reason of redemption, purchase,
conversion or otherwise shall be reissued as Series O Preferred Stock, and all
such shares shall be retired and shall return to the status of authorized,
unissued and retired and undesignated shares of Preferred Stock. No shares
<PAGE>
-12-
of Series O Preferred Stock shall be authorized or issued after December 31,
1996 without the consent of at least 66 2/3% in interest of the holders of
Series O Preferred Stock outstanding immediately prior thereto.
11. No Impairment. The Company shall not intentionally take any action
which would impair the rights and privileges of the shares of Series O Preferred
Stock set forth herein.
12. Holder's Rights if Shares are Delisted or if Trading in Common Stock is
Suspended. In the event that at any time on or after the date hereof and prior
to the fifth anniversary of the Closing Date, trading in the shares of the
Company's Common Stock is suspended on the principal market or exchange for such
shares (which market or exchange shall be either the Nasdaq National Market, the
American Stock Exchange or the New York Stock Exchange), for a period of ten
(10) consecutive trading days, other than as a result of the suspension of
trading in securities in general, or if such shares are delisted, then, at the
holder's option, the Company, if so permitted by applicable law and if not
otherwise in violation of an agreement to which the Company is a party or of the
Company's Certificate of Incorporation or By-Laws, shall redeem such holder's
shares of Series O Preferred Stock at the Redemption Price determined as set
forth in Paragraph 14(b) hereof.
13. Limitations on Holder's Right to Convert.
(a) Minimum Conversion. Holders of Series O Preferred Stock may in
no event convert less than one (1) share of Preferred Stock pursuant to a single
Conversion Notice; provided, however, that during a Conversion Restriction
Period no such minimum shall apply.
(b) Conversion Restriction Period. In the event that the Market
Price for Shares of Common Stock is equal to or less than the Trigger Price for
five (5) consecutive trading days, the Company may, at its option, at any time
while the Market Price for Shares of Common Stock is at or remains below the
Trigger Price, commence a conversion restriction period (a "Conversion
Restriction Period") by providing to the holders of Series O Preferred Stock
written notice thereof (the "Restriction Notice"). A Conversion Restriction
Period shall begin, with regards to each holder of Series O Preferred Stock, on
the fifth (5th) trading day after such holder receives the Restriction Notice
and shall terminate on the earliest of (i) the sixtieth (60th) calendar day
after such date, (ii) the fifth (5th) consecutive trading day during the
Conversion Restriction Period for which the Market Price for Shares of Common
Stock exceeds the Trigger Price and (iii) the Company's election, by notice to
the holder, to terminate such Conversion Restriction Period; provided, however,
that in no event shall the aggregate number of calendar days subject to all
Conversion Restriction Periods exceed sixty (60).
<PAGE>
-13-
Holders of Series O Preferred Stock may not exercise the
right to convert such Preferred Stock during the first ten (10) trading days of
any single Conversion Restriction Period. Thereafter, the aggregate Designated
Price of all shares of Series O Preferred Stock which may be converted on any
Holder Conversion Date during any Conversion Restriction Period shall not exceed
$50,000. If less than all shares of Series O Preferred Stock attempted to be
converted on any Holder Conversion Date may be converted due to operation of the
immediately preceding sentence, the shares of Series O Preferred Stock to be
converted shall be converted pro rata from all shares of Series O Preferred
Stock properly tendered for conversion pursuant to Paragraph 6 of this
Certificate.
(c) Market Stand-Off. Each holder of Series O Preferred Stock, if
so requested by the Company in connection with a firmly underwritten public
offering of Common Stock managed by an Approved Underwriter pursuant to an
effective registration statement, shall not convert any Series O Preferred Stock
for sixty (60) days commencing upon the date specified by the Company (the
"Stand-Off Period"), but in no event sooner than five (5) trading days after
such holder's receipt of the Company's request; provided, however, that:
(i) the Company may only request, and the holders of
Preferred Stock shall only be subject to, one (1)
Stand-Off Period during the twenty-four (24) month
period immediately following the Closing Date and one
(1) StandOff Period thereafter (provided that, if the
Stand-Off Period terminates pursuant to clause (ii)
below on any one occasion with respect to the
twenty-four (24) month period referred to above or on
any separate occasion with respect to the remaining
period thereafter, the Company may request and the
holders will be subject to a Stand-Off Period on one
additional occasion during such period);
(ii) the Market Stand-Off shall immediately terminate
if the registration statement for the underwritten
public offering is not declared effective on or
before the forty-fifth (45th) business day after the
Company's requested commencement date of the
Stand-Off Period; and
(iii) the Mandatory Conversion Date shall be
automatically extended by the aggregate number of
days for which the restrictions imposed by the
Stand-Off Period shall be effective.
(d) Notwithstanding anything to the contrary contained herein,
each Conversion Notice shall contain a representation that, after giving effect
to the shares of the Company's Common Stock to be issued pursuant to such
Conversion Notice, the total number of shares of the
<PAGE>
-14-
Company's Common Stock deemed beneficially owned by the holder thereof, together
with all shares of the Company's Common Stock deemed beneficially owned by such
holder's "affiliates" as defined in Rule 144 of the Securities Act of 1933 and
excluding any shares of the Series O Preferred Stock held by such holder will
not exceed four and nine-tenths percent (4.9%) of the total issued and
outstanding shares of the Company's Common Stock.
14. Optional Redemption.
(a) On one occasion prior to June 30, 1997, so long as the
Underlying Stock is subject to an effective registration statement and the
Company's Common Stock is listed on the Nasdaq National Market, the American
Stock Exchange or the New York Stock Exchange, the Company may, at its option,
redeem at least fifty percent (50%) of the Series O Preferred Stock then
outstanding, on a pro rata basis among the holders thereof. In addition to the
right provided in the preceding sentence, at any time prior to June 30, 1997
that the Underlying Stock is subject to an effective registration statement and
the Company's Common Stock is listed on the Nasdaq National Market, the American
Stock Exchange or the New York Stock Exchange, the Company may, at its option,
redeem all, but not less than all, of the Series O Preferred Stock then
outstanding. Any and all shares of the Series O Preferred Stock redeemed by the
Company pursuant to this Section 14(a) shall be redeemed at a price equal to (x)
110% of the Designated Price payable in cash, and (y) Warrants in substantially
the form attached hereto as Exhibit A, for the purchase of an aggregate of 1,833
shares of Common Stock for each share of Series O Preferred Stock redeemed (as
adjusted for any stock splits, split ups, recapitalization or other
reorganizations). Such Warrants shall be exercisable for shares of Common Stock
at a price per share equal to 115% of the Market Price for Shares of Common
Stock as of the date of redemption under this Paragraph 14(a).
(b) The Company may also at its option redeem all, but not less
than all, of the Series O Preferred Stock then outstanding (i) at any time prior
to December 31, 1998 that the Market Price for Shares of Common Stock is below
the Trigger Price or (ii) on December 31, 1998, at a redemption price equal to
(A) 110% of the Designated Price for the shares of Series O Preferred Stock and
(B) Warrants in substantially the form attached hereto as Exhibit A, exercisable
for 2,500 shares of Common Stock for each share of Series O Preferred Stock
redeemed, at an exercise price equal to 130% of the Market Price for Shares of
Common Stock as of the date of redemption under this Paragraph 14(b). In
addition to the right provided in the preceding sentence, if the Company's
option to redeem not less than fifty percent (50%) of the Series O Preferred
Stock pursuant to paragraph (a) above has not been exercised, on one occasion
prior to June 30, 1998, so long as the Underlying Stock is subject to an
effective registration statement and the Company's Common Stock is listed on the
Nasdaq National Market, the American Stock Exchange or the New York Stock
Exchange, the Company may, at its option,
<PAGE>
-15-
redeem at least fifty percent (50%) of the Series O Preferred stock then
outstanding, on a pro rata basis among the holders thereof, at the price
provided for in the preceding sentence.
(c) In the case of a redemption of Series O Preferred Stock as a
result of a Disposition Transaction, the Series O Preferred Stock shall be
redeemed at a price equal to 110% of the Designated Price.
(d) The redemption price for any redemption of the Series O
Preferred Stock as set forth in paragraph (a), (b) or (c) above shall be
referred to herein as the "Redemption Price."
(e) Upon and following receipt of notice from the Company of an
optional redemption of any or all of the shares of Series O Preferred Stock then
outstanding, each holder thereof may convert only that number of shares of
Series O Preferred Stock as is necessary to cover hedges or short positions in
the Company's Common Stock taken by that holder prior to the receipt of such
notice.
15. Mechanics of Redemption.
(a) Upon any redemption of Series O Preferred Stock, written
notice shall be given to the Company or the holders of the Series O Preferred
Stock, as applicable, for shares to be purchased or redeemed at least twenty
(20) business days prior to the date fixed for redemption. The notice shall be
addressed to the Company if applicable, or to each such holder at the address of
such holder appearing on the books of the Company, or given by such holder to
the Company for the purpose of notice, or, if no such address appears or is so
given, at the last known address of such holder. Such notice shall specify the
date fixed for redemption, shall state that all shares of Series O Preferred
Stock outstanding are to be redeemed and the number of shares of Series O
Preferred Stock to be so redeemed, and shall call upon the holder to surrender
on said date, at the place designated in the notice, the certificate or
certificates representing the shares to be redeemed on the date fixed for
redemption stated in such notice. Unless such person shall elect to convert some
or all of the same into Common Stock in accordance with Section 6 hereof, each
holder of shares of Series O Preferred Stock called for such redemption shall
surrender the certificate or certificates evidencing such shares at the place
designated in such notice and shall thereupon be entitled to receive payment of
the Redemption Price on the date fixed for redemption with respect to all
unconverted shares.
(b) If, on or prior to any date fixed for redemption, the Company
deposits, with any bank or trust company in the State of New Jersey or in the
State of New York, as a trust fund, a sum (and duly executed warrants)
sufficient to redeem all shares of Series O Preferred Stock called for
redemption which have not theretofore been surrendered for conversion, with
<PAGE>
-16-
irrevocable instructions and authority to the bank or trust company to pay and
deliver, on or after the date fixed for redemption, the Redemption Price of the
shares to their respective holders upon the surrender of their share
certificates, then from and after the date of redemption the shares to be
redeemed shall be redeemed and dividends and other distributions on those shares
shall cease to accrue after the date such shares were called for redemption. The
deposit shall constitute full payment for the shares of Series O Preferred Stock
to their holders and from and after the date of the deposit the shares of Series
O Preferred Stock shall no longer be outstanding, and the holders thereof shall
cease to be shareholders with respect to such shares, and shall have no rights
with respect thereto except the right to receive from the bank or trust company
payment of the Redemption Price of the shares without interest upon surrender of
their certificates therefor and the right to receive from the Company any
accrued dividends thereon through the date such shares were called for
redemption. Any interest accrued on any fund so deposited shall be the property
of, and paid to, the Company.
(c) If either of the events described in Paragraph 9(b) above
should occur, the Company may cure the Conversion Default by either (i)
promptly, and in no event later than ten (10) business days after the Conversion
Default occurs, obtaining those consents of shareholders, note holders and
others, if any, as shall be required in order to effect the balance of the
conversion or redemption, as the case may be; or (ii) redeem not later than
twenty (20) business days after the Conversion Default, the excess shares of
Preferred Stock and/or Warrants by paying the holders (A) cash per share in an
amount equal to one hundred ten percent (110%) of the Market Price for Shares of
Common Stock as of the Holder Conversion Date, on an as converted basis and (B)
Warrants in substantially the form attached hereto as Exhibit A, for the
purchase of an aggregate of 2,500 shares of Common Stock for each share of
Series O Preferred Stock redeemed; or (iii) the Company may, not later than
twenty (20) business days after the Conversion Default, issue to the relevant
holders of excess shares of Preferred Stock and/or Warrants such other
securities of the Company, in exchange therefor, in such quantities, at such
prices and subject to such terms and conditions as may be necessary in order to
generate a value per share, in respect of the excess shares of Preferred Stock
and/or Warrants, as the case may be, before taxes equal to (A) one hundred ten
percent (110%) of the Market Price for Shares of Common Stock as of the Holder
Conversion Date, on an as converted basis and (B) Warrants in substantially the
form attached hereto as Exhibit A, for the purchase of an aggregate of 2,500
shares of Common Stock for each share of Series O Preferred Stock redeemed. That
value shall be established by taking the average of the valuations of those
securities provided by three of the Approved Underwriters, one of whom shall
have been selected by the relevant holder, one of whom shall have been selected
by the Company and the third of whom will be selected by the first two Approved
Underwriters.
<PAGE>
-17-
(d) Upon any redemption of Series O Preferred Stock in accordance
with the foregoing, all of such shares of Series O Preferred Stock shall be
canceled and shall revert to the status of authorized and unissued shares of
Preferred Stock.
16. Transfer Restrictions. Shares of Series O Preferred Stock may not be
sold or otherwise transferred to a competitor of the Company engaged in, or to
the knowledge of the holder thereof, planning to engage in the business of
providing wireless voice or data communications services to mobile customers or
of providing equipment in connection therewith.
17. Withholding Taxes. Notwithstanding anything herein, the Company may
condition the making of any distribution (as such term is defined under
applicable tax law) in respect of any share of Series O Preferred Stock on the
holder of such share of Series O Preferred Stock depositing with the Company an
amount of cash sufficient to enable the Company to satisfy its withholding tax
obligations (the "Withholding Tax") with respect to such distribution. For the
avoidance of doubt, the Company shall not be required to redeem any Series O
Preferred Stock, and no dividends shall be capitalized as part of the Designated
Price of any share of Series O Preferred Stock, as a result of the Company's
failure to make a distribution because of a holder's failure to deliver the
proper Withholding Tax with respect to any distribution.
18. Consent for Distributions and Redemptions. For so long as the
Subscribers and their Permitted Assignees (as such terms are defined in that
certain Subscription Agreement dated as of June 14, 1996 by and among the
Company, Renaissance Fund LDC ("Renaissance") and the other signatories thereto)
own shares of the Company's Series N Cumulative Convertible Preferred Stock (the
"Series N Preferred Stock") having an aggregate stated value of at least
$25,000,000, the Company must obtain Renaissance's consent prior to the
declaration or payment of any dividend on the Series O Preferred Stock, or any
redemption of Series O Preferred Stock for, cash or securities of the Company
which rank senior to or on parity with the Series N Preferred Stock.
Notwithstanding anything in this Certificate to the contrary, the Company shall
not redeem any Series O Preferred Stock for cash upon the occurrence of a
Disposition Transaction, a Conversion Default or the occurrence of an event
described in Section 12 of this Certificate prior to any required purchase or
payment of the Company's 15% Senior Secured Discount Notes due 2005 (the "1995
Notes") pursuant to Section 4.11 or Article Six of the Indenture dated as of
June 30 1995 governing such 1995 Notes.
[Remainder of page intentionally left blank]
<PAGE>
IN WITNESS WHEREOF the undersigned have executed this Certificate of
Designation of Preferences at the City of , State of
, on this ___ day of December, 1996.
President Secretary
The undersigned declare under the penalty of perjury that the matters set
forth in the foregoing Certificate are true of their own knowledge. Executed at
___________, __________ on the ___ day of December, 1996.
President Secretary
<PAGE>
Exhibit (c)(2)
FORM OF LETTER AGREEMENT
<PAGE>
Board of Directors
Geotek Communications, Inc.
December 1997
Page 1
December 31, 1996
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
person, individually and not on behalf of a class (the "Investor"), and Geotek
Communications, Inc. (the "Company"). Capitalized terms contained in this letter
shall have the same meaning ascribed to them in the Agreement.
In addition to the representations and covenants of the Investor
contained in the Agreement, the Company has required each Investor to execute
and deliver a letter of like tenor to the Company and, therefore, the Investor
further covenants and agrees as follows:
1. In the event that the Investor engages in any Block Trade Sales (as
hereinafter defined), the 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 single executed sale of more
than 100,000 shares of the Common Stock of the Company.
2. In the event the Investor engages in short sales transactions or
other hedging activities during a day which the 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 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, the Investor agrees to calculate the
Average Stock Price without including any trades for common stock that the
Investor executed on the day utilized in determining the Conversion Date Market
Price.
-1-
<PAGE>
Board of Directors
Geotek Communications, Inc.
December 1997
Page 2
3. Convertible Percentage. Unless the Company and holders of at least
66 2/3% of the Series O 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
immediately Convertible Percentage shall be one hundred percent (100%):
<TABLE>
<CAPTION>
Holder Conversion Date
(Number of Days after Original Issue Date) Percentage of all Preferred Shares
------------------------------------------ ----------------------------------
<S> <C>
0 to 90 0%
91 to 180 20%
181 to 365 50%
366 to 540 80%
541 and thereafter 100%
</TABLE>
4. Except as permitted in Section 13 of the Certificate of Designation
for the Preferred Stock, during any Conversion 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
converting any Preferred Stock or trading any Common Stock; provided however,
that each holder, individually, may convert or trade that amount of Preferred
Stock or Common Stock, as the case may be, held by such holder as may be
necessary to cover short positions created prior to the commencement of the
relevant Conversion Restriction Period or Stand-Off Period.
5. The Investor shall not 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.
<PAGE>
Board of Directors
Geotek Communications, Inc.
December 1997
Page 3
6. For so long as the Investor owns any Preferred Stock, on the last
day of each quarterly calendar period beginning March 31, 1997, the 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. The Investor's failure to deliver any such certificate under this
Section 6 shall not constitute a violation of this letter agreement for purposes
of Section 7 unless such failure continues for a period of ten (10) business
days after its receipt of notice from the Company of such failure.
7. In the event the 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 the Investor an amount equal to the greater of
(i) all profits derived by the Investor in the transactions conducted by the
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.
8. 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.
9. 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
<PAGE>
Board of Directors
Geotek Communications, Inc.
December 1997
Page 4
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:
Its:
Agreed and accepted on December 31, 1996
GEOTEK COMMUNICATIONS, INC.
By:
Title:
<PAGE>
Exhibit (c)(3)
FORM OF WARRANT
<PAGE>
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 ___________ (___) months
after the date hereof, _______________ (______) shares of fully paid and
nonassessable shares of Common Stock, $.01 par value, of the Company (the
"Common Stock"), at the Purchase Price (hereinafter defined), as the same may be
adjusted pursuant to Section 5 herein.
1. Definitions.
(a) the term "Warrant" shall mean this Common Stock Purchase
Warrant.
(b) the term "Warrant Holder" shall mean the Purchaser or any
assignee of all or any portion of this Warrant at any given time who, at the
time of assignment, acquired the right to purchase at least 20,000 Warrant
Shares (such number being subject to adjustment after the date hereof pursuant
to Section 5 herein.)
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(c) the term "Warrant Shares" shall mean the shares of Common
Stock or other securities issuable upon exercise of this Warrant.
(d) the term "Purchase Price" shall mean __________ Dollars
and __________ Cents United States Dollars ($_____) 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 December 31, 1996 (the
"Subscription Agreement"), between the Company and the Purchaser 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.
Notwithstanding anything to the contrary contained herein, each form of
warrant exercise delivered to the Company by the Warrant Holder shall be
accompanied by the Warrant Holder's representation that, after giving effect to
the shares of the Company's Common Stock to be issued pursuant to such notice of
exercise, the total number of shares of the Company's Common Stock deemed
beneficially owned by the Holder, together with
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all shares of the Company's Common Stock deemed beneficially owned by the
Holder's "affiliates" as defined in Rule 144 of the Securities Act, will not
exceed 4.9% of the total issued and outstanding shares of the Company's Common
Stock.
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.
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.
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(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) 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.
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:
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(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
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
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<PAGE>
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.
(f) Purchase Price Adjustment. In the event that the Company
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
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<PAGE>
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
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
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<PAGE>
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.
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.
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<PAGE>
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
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
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<PAGE>
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:
Fax: (___) ___-____
with copies to:
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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
____________ (__) 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,
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,
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<PAGE>
planning to engage in the business of providing wireless voice or data
communications services to mobile customers or of providing equipment in
connection therewith.
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<PAGE>
Dated: ______ __, ____ GEOTEK COMMUNICATIONS, INC.
By:
Title:
[CORPORATE SEAL]
Attest:
By:_______________________
Its:
NAME OF INVESTOR:
_______________________
By its:
By:
Name:
Title:
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<PAGE>
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 _______________
corporation (the "Company"), and herewith makes payment of $__________ therefor,
and requests that the certificates for such shares be issued in the name of, and
delivered to _________________, whose address is
__________________________________.
Dated: __________________________________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
__________________________________________
(Address)
Tax Identification Number:_____________
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FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers unto
_________________ the right represented by the within Warrant to purchase
_____________ shares of Common Stock of Geotek Communications, Inc., a
______________ corporation, to which the within Warrant relates, and appoints
_________________ Attorney to transfer such right on the books of Geotek
Communications, Inc., with full power of substitution in the premises.
Dated: _________________________________________
(Signature must conform to name of holder
as specified on the face of the Warrant)
_________________________________________
(Address)
Signed in the presence of:
_______________________________
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Exhibit (c)(4)
FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights
Agreement"), entered into as of December 31, 1996, between
______________________________________ (the "Purchaser"), and Geotek
Communications, Inc., a Delaware corporation with its principal office at 20
Craig Road,
Montvale, New Jersey 07645 (the "Company").
W I T N E S S E T H:
WHEREAS, pursuant to a Convertible Securities Subscription Agreement,
dated as of December 31, 1996 (the "Agreement"), by and between the Company and
the Purchaser, the Company has agreed to sell and the Purchaser has agreed to
purchase U.S.$__________ of the Company's Series O 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 O 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;
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:
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.
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<PAGE>
"Registrable Securities" shall mean: (i) Shares issued to Purchaser or
its designee upon conversion of the Preferred Stock, exercise of the Warrants or
upon any stock split, stock dividend (pursuant to the Certificate of Designation
or otherwise), recapitalization or similar event with respect to such Shares;
and (ii) any securities issued or issuable to Purchaser or any Holder upon the
conversion or exercise or exchange of any Preferred Stock, Warrants 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, 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.
"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
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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 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 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
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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
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;
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(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
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.
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(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 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.
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
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<PAGE>
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 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.
8. Indemnification.
(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
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<PAGE>
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
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
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<PAGE>
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.
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
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<PAGE>
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
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
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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
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:
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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:
Attention:
Fax: (___) ____________
with copies to:
Attention:
Fax: (___) ____________
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.
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(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.
(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.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first above written.
NAME OF INVESTOR:
By:
Its:
GEOTEK COMMUNICATIONS, INC.
By:
Name:
Title:
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