-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IfXNPAPadzShZSu4K/VhCNNmv0kFQs7S2OycqE7WiviDtKkPXTbwNSTZjZuJZW31 2QS/LnQt6ImwZ7Zty+WOZA== 0000950150-98-001034.txt : 19980619 0000950150-98-001034.hdr.sgml : 19980619 ACCESSION NUMBER: 0000950150-98-001034 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 19980618 SROS: NONE GROUP MEMBERS: GENERAL MOTORS GROUP MEMBERS: HUGHES ELECTRONICS CORP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GEOTEK COMMUNICATIONS INC CENTRAL INDEX KEY: 0000844843 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 222358635 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-40285 FILM NUMBER: 98650457 BUSINESS ADDRESS: STREET 1: 102 CHESTNUT RIDGE RD CITY: MONTVALE STATE: NJ ZIP: 07645 BUSINESS PHONE: 2019309305 MAIL ADDRESS: STREET 1: 102 CHESTNUT RIDGE ROAD CITY: MONTVALE STATE: NJ ZIP: 07465 FORMER COMPANY: FORMER CONFORMED NAME: GEOTEK INDUSTRIES INC DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HUGHES ELECTRONICS CORP CENTRAL INDEX KEY: 0000944868 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 200 N SEPULVEDA BLVD CITY: EL SAGUNDO STATE: CA ZIP: 90245-0956 MAIL ADDRESS: STREET 1: 200 N SEPULVEDA BOULEVARD CITY: EL SAGUNDO STATE: CA ZIP: 90245-0956 SC 13D 1 SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )* GEOTEK COMMUNICATIONS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 373654102 - -------------------------------------------------------------------------------- (CUSIP Number) Kristine E. Mrofka, Esq. Hughes Electronics Corporation 1500 Hughes Way, Long Beach, CA 90810; M/S: HC/A01/4A467; (310) 525-5158 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 2, 1996 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g),check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of this schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). (continued on following pages) (Page 1 of 3 Pages) 2 CUSIP No. 323654102 SCHEDULE 13D Page 2 of 3 Pages --------------------- -------- -------- (1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities only) Hughes Electronics Corporation --------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group* (a) [ ] (b) [ ] --------------------------------------------------------------------- (3) SEC Use Only --------------------------------------------------------------------- (4) SOURCE OF FUNDS* WC --------------------------------------------------------------------- (5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) --------------------------------------------------------------------- (6) Citizenship or Place of Organization Delaware --------------------------------------------------------------------- (7) Sole Voting Power Number of Shares -------------------------------------------------------- Beneficially (8) Shared Voting Power Owned by 56,944,444 Each -------------------------------------------------------- Reporting (9) Sole Dispositive Power Person With -------------------------------------------------------- (10) Shared Dispositive Power 56,944,444 -------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 56,944,444 --------------------------------------------------------------------- (12) Check Box if Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] --------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 32.3% --------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) CO --------------------------------------------------------------------- 3 CUSIP No. 323654102 SCHEDULE 13D Page 3 of 3 Pages --------------------- -------- -------- (1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (Entities only) General Motors Corporation --------------------------------------------------------------------- (2) Check the Appropriate Box if a Member of a Group* (a) [ ] (b) [ ] --------------------------------------------------------------------- (3) SEC Use Only --------------------------------------------------------------------- (4) SOURCE OF FUNDS* WC --------------------------------------------------------------------- (5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) --------------------------------------------------------------------- (6) Citizenship or Place of Organization Delaware --------------------------------------------------------------------- (7) Sole Voting Power Number of Shares -------------------------------------------------------- Beneficially (8) Shared Voting Power Owned by 56,944,444 Each -------------------------------------------------------- Reporting (9) Sole Dispositive Power Person With -------------------------------------------------------- (10) Shared Dispositive Power 56,944,444 -------------------------------------------------------- (11) Aggregate Amount Beneficially Owned by Each Reporting Person 56,944,444 --------------------------------------------------------------------- (12) Check Box if Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] --------------------------------------------------------------------- (13) Percent of Class Represented by Amount in Row (11) 32.3% --------------------------------------------------------------------- (14) Type of Reporting Person (See Instructions) CO --------------------------------------------------------------------- 4 Item 1. Security and Issuer This statement is filed under Section 13(d) of the Securities Exchange Act of 1934 ("Exchange Act") and relates to certain rights to acquire shares of Common Stock, $0.01 par value ("Common Stock"), of Geotek Communications, Inc., a Delaware corporation (the "Issuer"). The principal executive offices of the Issuer are located at 102 Chestnut Ridge Road, Montvale, New Jersey 07645. Item 2. Identity and Background This statement on Schedule 13D (the "Statement") is filed by Hughes Electronics Corporation, a Delaware corporation ("HE") which, until December 17, 1997 was known as Hughes Network Systems, Inc. ("HNS"), and HE's immediate parent, General Motors Corporation ("GM") (together the "Reporting Persons"). As part of the merger of Hughes Electronics Corporation ("Old HE") defense assets with Raytheon Company, Old HE ceased to exist and HNS was renamed Hughes Electronics Corporation ("HE"). Following the merger of GM/HE Merger Sub, Inc. (formerly known as Hughes Electronics Corporation) with and into GM and the subsequent transfer of all of the capital stock of HE to GM, HE became a direct, wholly owned subsidiary of GM. The assets and operations of HNS continue to reside in HE and, for purposes of this Statement, all references to HE are intended to include HNS. The former name HNS is used where transactions took place prior to the name change, in order to be consistent with the exhibits, and it is intended that references to HNS should include its new identity as HE. HNS, which continues as an operating unit of HE, is engaged principally in the business of manufacturing and services for wireless telecommunications, including those handsets and base station equipment manufactured for the Issuer and its subsidiaries. HE, in addition, engages in the business of designing, manufacturing and marketing advanced electronics systems for telecommunications and, through its subsidiaries and affiliates, of manufacturing, owning and operating commercial communications satellites. The address of its principal business and principal office is 200 N. Sepulveda Boulevard, El Segundo, California 90245. GM is principally engaged in the automotive products industry business, consisting of the design, manufacture, assembly and sale of automobiles, trucks and related parts and accessories. It also has financing, insurance, defense and automotive electronics operations. The address of its principal business and principal office is 100 Renaissance Center, Detroit, Michigan 48243. 4 5 Schedules I and II, respectively, to the Statement list each executive officer and director of HE and GM and the business address, present principal occupation or employment and citizenship of each such executive officer and director, as well as the name, principal business and address of any corporation or other organization in which such employment is conducted. During the last five years, none of the Reporting Persons nor, to the best of the knowledge of the Reporting Persons, any of the other persons named in this Item 2 has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, none of the Reporting Persons nor, to the best of the knowledge of the Reporting Persons, any of the other persons named in this Item 2 was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration The Right to Convert and the Warrants as described in Items 4 and 6 were offered to HNS (now, HE) by Issuer as an inducement to make the loans and extensions of credit described in this Statement and exhibits hereto. The monies loaned to Issuer were part of HNS' regular operating funds and working capital. Item 4. Purpose of the Transaction As set forth in Item 6, the Right to Convert and the Warrants were acquired in connection with loans and extensions of credit made to the Issuer in the ordinary course of HNS/HE's business, solely for investment purposes and with the intent to secure recoupment of the amounts lent to the Issuer and its subsidiaries. If the Right is exercised, HE must forego its rights to repayment of the principal of the Note. Pursuant to the terms of a Loan Agreement dated December 21, 1995, HNS acquired a Right to Convert (the "Right"), up to and including the entire principal amount outstanding under the Loan Agreement, to shares of Issuer's Common Stock at a price based on detailed formulae in the Loan Agreement ("Conversion Price") which would under most circumstances result in a Conversion Price of 90% of the weighted average sales price of Issuer's Common Stock as reported between one and ten days prior to any exercise on the primary interdealer quotation system or national securities exchange on which Issuer's Common Stock is listed. Thus, the actual number of shares of Common Stock which 5 6 may be acquired through conversion is variable. Prior to October 1, 1998, and in the absence of a Default as defined in the Loan Agreement, HNS may not convert more than $500,000 principal amount of the loans on any business day. However, upon the occurrence and during the continuation of a Default, up to the entire amount of the Loans may be converted into shares of Common Stock with no contractual restrictions on the ability to resell such shares obtained through conversion. The Right was also contingent upon funding under the Loan Agreement, which took place on October 2, 1996. The Right expires on the maturity date of the Loan, which is October 2, 1998. As a result of changes in Issuer's quoted stock price, as well as the floating Conversion Price, it is probable that the Right, if fully exercised, would result in HE owning more than 10% of Issuer's currently outstanding Common Stock. In addition, the Reporting Persons acquired three (3) Warrants covering up to an aggregate of 2,500,000 shares of Common Stock of the Issuer in connection with an additional extension of vendor credit under a Vendor Credit Facility and related agreements between HNS, Issuer and Issuer's subsidiaries. The Warrants are exercisable as follows: one Warrant for one million (1,000,000) shares of Common Stock exercisable at a price of $8.625 per share, one Warrant for one million (1,000,000) shares of Common Stock exercisable at a price of $10.7813 per share, and one Warrant for five hundred thousand (500,000) shares of Common Stock exercisable at $12.9375 per share. The percentage of Common Stock reported in this Schedule 13D as being beneficially owned by the Reporting Persons is based upon 119,199,303 shares of outstanding Common Stock, representing the number of outstanding shares of Common Stock identified in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 (the "10-Q"). As of the date of this Statement, neither the Right nor the Warrants have been exercised in whole or in part; however, the Reporting Persons may exercise the Right and/or the Warrants to acquire Common Stock of the Issuer, depending upon the Reporting Persons' evaluation of the Issuer's business, prospects and financial condition, the market for the Common Stock of the Issuer, other opportunities available to the Reporting Persons, general economic conditions, money and stock market conditions, regulatory conditions and other future developments. Currently, the exercise prices of the Warrants are substantially in excess of the market value of the Issuer's Common Stock. However, the Conversion Price of the Right, as noted above, is calculated at a discount to the weighted average sales price of the Issuer's Common Stock. Although the Reporting 6 7 Persons have no current plans to exercise the Right or to dispose of Common Stock, in the future, depending upon the factors set forth above, the Reporting Persons may decide to exercise or not exercise the Right, or to hold or dispose of all or part of the Common Stock of the Issuer acquired through any such exercise. Although the Reporting Persons have no current plans to take any such actions, in the event that the Right or the Warrants are exercised and Issuer's Common Stock was thereby acquired, the Reporting Persons could formulate proposals, and take action, as they may deem appropriate in the circumstances, to cause any vacancies on the board of directors of the Issuer to be filled, or otherwise to change the board of directors or management of the Issuer, to effect a change in the capitalization of the Issuer or to effect an extraordinary corporate transaction. The Reporting Persons have no present plan or proposal which relates to or would result in any of the outcomes covered in subsections (a) through (j) of Item 4 of Schedule 13D. The Reporting Persons reserve the right to formulate other plans or proposals, and to take other action, with respect to the Issuer and their ownership of the Issuer's securities as they may determine. Item 5. Interest in Securities of the Issuer (a) Other than the Right and the Warrants, neither HE nor its subsidiaries or, to the best of the Reporting Persons' knowledge, affiliates have interests in the Common Stock of the Issuer except as set forth in this Statement. GM is the indirect beneficial owner of HE's interests in the Right and the Warrants. If the Right were exercised for its full principal amount of $24.5 million to acquire Common Stock of the Issuer over the course of 49 days (based on the $500,000 maximum principal amount of the Right that may be converted on any business day prior to October 1, 1998) at an assumed stock price of $0.50 (the assumed stock price approximates the recent trading price of the Shares, which price fluctuates on a daily basis and is only an estimate for purposes of this filing), the Reporting Persons would beneficially own in excess of 54.4 million Shares, or approximately 31.4% of Issuer's currently issued and outstanding Common Stock. However, upon the occurrence and during the continuation of a Default, up to the entire amount of the Loans may be converted into shares of Common Stock with no contractual restrictions on the ability to resell such shares obtained through conversion. As of the date of this Statement, the Warrants are not presently "in the money"; that is, Reporting Persons could acquire an equal amount of Common Stock on the open market for substantially less than the exercise prices under the Warrants. However, if the Reporting Persons exercised the Warrants in full, such 2,500,000 shares represented by the Warrants represent 2.1% of Issuer's Common Stock. Aggregated, the number of shares of underlying Common Stock represented by the Right and the Warrants would equal approximately 32.3%, assuming (for the purposes of this example only) that the open market price for Issuer's Common Stock remained at $0.50 per share for the duration of the period over which the Right was exercised. 7 8 In addition, HE has received a pledge of all of the capital stock of Issuer's subsidiary, Geotek License Holdings, Inc. ("Holdings") as partial security for the loans made under the Loan Agreement and extensions of credit under the Vendor Credit Facility, which capital stock is 100% owned by Issuer and is not registered under the Securities Act of 1933 (the "33 Act") or the Exchange Act. (b) In the event of any exercise of the Right or the Warrants and, subject to the effects of the Agreements discussed in Item 6 below, HE is the entity having sole power to vote, direct the vote, dispose or direct the disposition of any Common Stock, and GM is an indirect holder of such powers. To the best of the knowledge of the Reporting Persons, as of the date of this filing, none of the persons (other than the Reporting Persons) named in Item 2 beneficially owned, or had the right to acquire, shares of Common Stock of the Issuer, except as set forth in Item 5(c) below. The Reporting Persons are not a part of a group as defined by Section 13(d)(3) of the Exchange Act. The Reporting Persons expressly disclaim any beneficial interest in the shares of Common Stock of the Issuer held by any entities other than the Reporting Persons, and the filing of this Statement by the Reporting Persons shall not be construed as an admission by the Reporting Persons that any of them is, for purposes of Section 13(d) of the Exchange Act, the beneficial owner of any of the shares of Common Stock held by any third party. (c) The Reporting Persons have neither acquired nor disposed of Common Stock of the Issuer in the sixty days preceding the filing of this Statement, nor have Reporting Persons exercised either the Right or the Warrant at any time since their respective acquisition. To the best of the knowledge of the Reporting Persons, there have not been any transactions in the Common Stock of Issuer effected by or for the account of any executive officer or director of the Reporting Persons during the past sixty days. The Reporting Persons understand that certain executives and officers of HE/HNS and GM have acquired an aggregate of 12,400 shares of Common Stock of the Issuer. There is no agreement, arrangement or understanding between such persons and the Reporting Persons with respect to any securities of the Issuer. To the best of the knowledge of the Reporting Persons, all such transactions were effected as part of open market transactions for investment purposes. 8 9 The Reporting Persons specifically disclaim and have no beneficial interest in the shares of Common Stock of the Issuer owned by the executives and officers of HE/HNS and GM. (d) The Reporting Persons do not know of any other person having the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Right, the Warrants or underlying shares of Common Stock of the Issuer which the Reporting Persons have a right to acquire. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer The following descriptions are summaries only, and are qualified in their entirety by reference to the agreements attached as exhibits hereto and/or incorporated herein by reference. Loan Agreement As more fully described in the document, the Issuer, the Issuer's subsidiary Geotek Financing Corporation ("Financing"), and HNS (prior to its change of name to HE) are parties to a Loan Agreement dated December 31, 1995 as amended by Amendment No. 1 dated September 27, 1996 (the "Loan Agreement") wherein HE agreed to lend an amount up to $24,500,000 to Issuer's subsidiary, Financing to enable Issuer's wholly owned subsidiary, Geotek License Holdings, Inc. ("Holdings") to purchase certain 900 MHz Licenses as auctioned by the Federal Communications Commission ("FCC"). Borrowings under the Loan Agreement bear interest at the rate of 12% per annum, payable quarterly, or 18% per annum from and after the occurrence of a default. Repayment of amounts drawn under the Loan Agreement is guarantied by Issuer and secured by certain collateral, including among other things, the 900 MHz licenses acquired by Holdings or any subsidiary of Issuer, a collateral pledge of Issuer's 100% interest in the capital stock of Holdings and certain promissory notes executed intercompany to the Issuer. The Loan Agreement contains customary conditions and covenants, including restrictions on the payment of dividends, creation of liens and transactions with affiliates. Also embodied in the Loan Agreement is the Right to Convert up to 100% of the amount outstanding under the Loan Agreement to shares of Common Stock of the Issuer (the "Right"). The Right was structured to arise following the initial funding under the Loan Agreement which occurred October 2, 1996; the Right expires on the maturity date of the loans made under the Loan Agreement, or October 2, 1998. The price HE as Lender is to pay upon conversion, in whole or in part, of amounts outstanding under the Loan Agreement is variable, based on detailed formulae 9 10 in the Loan Agreement ("Conversion Price") which would generally result in a Conversion Price of 90% of the weighted average sales price of Issuer's Common Stock as reported between one and ten days prior to any exercise on the primary interdealer quotation system or national securities exchange on which Issuer's Common Stock is listed. Thus, the actual number of shares of Common Stock which may be acquired through conversion is variable. The Issuer also agreed to give HE certain registration rights in connection with the underlying Common Stock. The Issuer offered the Right as a further inducement to make the loans under the Loan Agreement; however to date, no exercise of the Right has occurred. The Loan Agreement is fully funded at $24.5 Million. Amended and Restated Borrower Pledge Agreement Initially entered into December 21, 1995 in connection with the Loan Agreement, the Amended and Restated Borrower Pledge Agreement dated September 27, 1996 ("Pledge Agreement") is the Agreement whereby both the Loan Agreement "Lender" and the "Lender" under the Vendor Credit Financing Agreement described below ("Credit Facility") (in both instances "Lender" is the former HNS) obtained a security interest in 100% of the capital stock of Issuer's wholly owned subsidiary, Holdings, which capital stock is not registered under the 33 Act or the Exchange Act ("Pledged Shares"). Issuer offered the Pledge Agreement as additional collateral for borrowings under the Loan Agreement and Credit Facility and as an inducement to HNS (HE) to make the loans and extend credit. The Pledge Agreement contains standard terms for a grant of a first perfected security interest in the Pledged Shares, and in the absence of a Default (as respectively defined in the Loan Agreement and the Credit Facility), Financing as Pledgor continues to exercise any and all voting and other consensual rights pertaining to the Pledged Shares, provided that Pledgor is required to abstain or refrain from exercising any such right if action would have a material adverse effect on the value of the Pledged Collateral as defined in the Pledge Agreement or if action would be inconsistent with the terms of the Loan Agreement or Credit Facility. Upon default, HE has certain registration rights to enable it to realize the full value of the collateral. Vendor Credit Financing Agreement Issuer as Guarantor and Financing as Borrower entered into a Vendor Credit Financing Agreement with HNS as Lender (prior to its change of name to HE) on September 27, 1996 ("Credit Facility") to enable Issuer and its subsidiaries to purchase Base Station Equipment for use in Issuer's business from HNS under the terms of a Manufacturing Agreement for Geotek Base Station Equipment dated as of September 27, 1996 between the same parties, for an amount up to $100 Million subject to certain conditions precedent. 10 11 In addition to a first priority security interest or lien in equipment sold by HE to Issuer, repayment under the Credit Facility is secured by the same collateral as that securing performance under the Loan Agreement, and in addition, HE received three (3) warrants to purchase Common Stock of the Issuer, one warrant each as follows: one warrant for one million (1,000,000) shares of Common Stock exercisable at a price of $8.625 per share, one warrant for one million (1,000,000) shares of Common Stock exercisable at a price of $10.7813 per share, and one warrant for five hundred thousand (500,000) shares of Common Stock exercisable at a price of $12.9375 per share (together, the "Warrants"). The Warrants became exercisable on September 27, 1997 and the right of exercise expires September 26, 2003. Further, as defined in each respective Warrant, each of the Warrants is subject to Issuer's demand for Mandatory Exercise from and after September 27, 2000 and adjustments in price and number of shares subject to the Warrant as provided in Sections 1.5 and 6 of each respective Warrant. The Warrants are subject to rights of registration in favor of the Holder. To the extent that Issuer has other warrants outstanding in addition to the Warrants, the Reporting Persons have no arrangements, agreements or understandings with any warrant holders or to the best of Reporting Persons' knowledge, any relationship with or to any other holder of warrants of the Issuer. Registration Rights Agreement The Registration Rights Agreement dated September 27, 1996 among Issuer, Financing and HNS (hereafter "HE") was executed in connection with the Credit Facility as a further inducement to HE as Lender, to make Advances thereunder and to provide HE with rights to have any Notes of Issuer under the Credit Facility registered under the 33 Act and the Exchange Act by up to two Registrations as defined in more detail in the Registration Rights Agreement. The rights of registration are subject to a number of restrictions, including HE's agreement not to effect any public sale of Notes in the event of an offering of similar debt securities by the Issuer. The Issuer has assumed the obligation to pay certain expenses incident to registration of the Notes as securities. Additionally, Issuer and HE have provided for a cross-indemnity with respect to information provided by each party for use in any registration statement or prospectus. 11 12 Item 7. Material to be Filed as Exhibits Exhibit I: Joint Filing Agreement dated June 17, 1998. Exhibit II: Loan Agreement dated December 21, 1995. Exhibit III: Amendment No. 1 to Loan Agreement dated September 27, 1996. Exhibit IV: Vendor Credit Financing Agreement dated September 27, 1996. Exhibit V: Amended and Restated Borrower Pledge Agreement dated September 27, 1996. Exhibit VI: Form of Warrant to Purchase Common Stock. Exhibit VII: Registration Rights Agreement dated September 27, 1996. 12 13 Signature After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct. HUGHES ELECTRONICS CORPORATION By: /s/ Pradman P. Kaul --------------------------- Name: Pradman P. Kaul Title: Vice President Dated: June 17, 1998. 13 14 Signature After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct. GENERAL MOTORS CORPORATION By: /s/ Martin I. Darvick --------------------------- Name: Martin I. Darvick Title: Assistant Secretary Dated: June 17, 1998. 14 15 SCHEDULE I HUGHES ELECTRONICS CORPORATION ("HE") EXECUTIVE OFFICERS AND DIRECTORS To the best of the knowledge of Reporting Persons, each of the executive officers and directors listed below is a United States citizen, with the exception of Eckhard Pfeiffer, a director of HE, who is a citizen of Germany. Unless otherwise specified, the business address of each person listed below is 200 N. Sepulveda Boulevard, El Segundo, California 90245.
Principal Occupation or Name and Address Position with HE Employment ---------------- ---------------- ---------- Roxanne S. Austin Senior Vice President and HE Senior Vice President Chief Financial Officer and Chief Financial Officer Gareth C. C. Chang Senior Vice President HE Senior Vice President Steven D. Dorfman Vice Chairman and Director HE Vice Chairman and Director Charles T. Fisher, III Director GM Director; Retired General Motors Corp. Chairman and President, 100 Renaissance Center NBD Bankcorp, Inc. Detroit, MI 48243 Sanda A. Harrison Senior Vice President HE Senior Vice President J. Michael Losh Director GM Executive Vice General Motors Corp. President and Chief 100 Renaissance Center Financial Officer Detroit, MI 48243 Charles H. Noski President and Director President of HE Harry J. Pearce Director GM Vice Chairman and General Motors Corp. Director 100 Renaissance Center Detroit, MI 48243 Eckhard Pfeiffer Director President and Chief Compaq Computer Corp. Executive Officer, Compaq 20555 S.H. 249 Computer Corp.; GM Director Houston, TX 77070 Jack A. Shaw Senior Vice President HE Senior Vice President; Hughes Network Systems Chairman and CEO of Hughes 11717 Exploration Lane Network Systems, a unit of Germantown, MD 20876 HE
15 16
Principal Occupation or Name and Address Position with HE Employment ---------------- ---------------- ---------- Michael T. Smith Chairman of the Board, Chairman of the Board, Chief Executive Officer and Chief Executive Officer Director and Director of HE John F. Smith, Jr. Director Chairman, Chief Executive General Motors Corp. Officer, President and 100 Renaissance Center Director of GM Detroit, MI 48243 Marcy J.K. Tiffany Vice President and General HE Vice President and Counsel General Counsel Thomas H. Wyman Director GM Director; Former The Landings Chairman, President and 1 Adams Point Chief Executive Officer of Savannah, GA 31411 CBS, Inc.; Former Senior Advisor, SBC Warburg Inc.; Former Chairman, S. G. Warburg & Co.
16 17 SCHEDULE II GENERAL MOTORS CORPORATION ("GM") EXECUTIVE OFFICERS AND DIRECTORS To the best of the knowledge of Reporting Persons, each of the executive officers and directors listed below is a United States citizen, with the exception of Percy Barnevik, a director of GM, who is a citizen of Sweden, and Eckhard Pfeiffer, a director of GM, who is a citizen of Germany. Unless otherwise specified, the business address of each person listed below is 100 Renaissance Center, Detroit, Michigan 48243.
Principal Occupation or Name and Address Position with GM Employment ---------------- ---------------- ---------- Percy Barnevik Director Chairman, ABB Asea Brown ABB Asea Brown Boveri Ltd. Boveri, Ltd. Affolternstrasse 44 Box 8131 CH-8050 Zurich Switzerland J. T. Battenberg III Executive Vice President GM Executive Vice General Motors Corp. and President of Delphi President and President of 5725 Delphi Drive Automotive Systems Delphi Automotive Systems Troy, MI 48098-2815 John H. Bryan Director Chairman and Chief Sara Lee Corporation Executive Officer, Sara Three First National Plaza Lee Corporation 46th Floor Chicago, IL 60602 Thomas E. Everhart Director Pro-Vice-Chancellor, University of Cambridge University of Cambridge The Old Schools Trinity Lane Cambridge CB2-1TN England Charles T. Fisher, III Director Retired Chairman and President, NBD Bankcorp, Inc.
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Principal Occupation or Name and Address Position with GM Employment ---------------- ---------------- ---------- George M.C. Fisher Director Chairman and Chief Executive Eastman Kodak Company Officer, Eastman Kodak 343 State Street Company Rochester, NY 14650 Thomas A. Gottschalk Senior Vice President and GM Senior Vice President and General Motors Corp. General Counsel General Counsel 3031 W. Grand Boulevard Detroit, MI 48202 Louis R. Hughes Executive Vice President GM Executive Vice President General Motors International and President of and President of Operations International Operations International Operations Postfach CH-8152 Glattbrugg Switzerland Richard G. LeFauve Senior Vice President and GM Senior Vice President and President of General President of General Motors Motors University University J. Michael Losh Executive Vice President GM Executive Vice President and Chief Financial and Chief Financial Officer Officer Karen Katen Director Executive Vice President, Pfizer Pharmaceuticals Group Pfizer Pharmaceuticals; Pfizer, Inc. President, US Pharmaceuticals 235 East 42nd Street New York, NY 10017-5755 J. Willard Marriott, Jr. Director Chairman and Chief Executive Marriott International Inc. Officer, Marriott One Marriott Drive International Inc. Washington, DC 20058 Ann D. McLaughlin Director Chairman, The Aspen The Aspen Institute Institute; President, 1333 New Hampshire Ave. NW Federal City Council Suite 1070 Washington, DC 20036 Harry J. Pearce Vice Chairman and Director GM Vice Chairman and Director Eckhard Pfeiffer Director President and Chief Compaq Computer Corp. Executive Officer, Compaq 20555 S.H. 249 Computer Corporation Houston, TX 77070
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Principal Occupation or Name and Address Position with GM Employment ---------------- ---------------- ---------- John G. Smale Director Chairman, GM Executive The Proctor & Gamble Company Committee; Retired Chairman, P.O. Box 599 The Proctor & Gamble Company Cincinnati, Ohio 45201 John F. Smith, Jr. Chairman of the Board, Chairman of the Board, Chief Chief Executive Officer, Executive Officer, President President and Director and Director of GM Louis W. Sullivan, M.D. Director President, Morehouse School Morehouse School of Medicine of Medicine 720 Westview Drive S.W. Atlanta, GA 30310 G. Richard Wagoner Executive Vice President GM Executive Vice President and President of North and President of North American Operations American Operations Dennis Weatherstone Director Retired Chairman and current J.P. Morgan & Co. Inc. director, J.P. Morgan & Co., 60 Wall Street, 21st Fl. Inc. New York, NY 10260 Thomas H. Wyman Director Former Chairman, President The Landings and Chief Executive Officer 1 Adams Point of CBS, Inc.; Former Senior Savannah, GA 31411 Advisor, SBC Warburg Inc.; Former Chairman, S. G. Warburg & Co.
19 EX-99.I 2 JOINT FILING AGREEMENT 1 EXHIBIT I JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) promulgated under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D referred to below) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the common stock, $.01 par value (the "Common Stock"), of Geotek Communications, Inc., a Delaware corporation, and that this Agreement may be included as an Exhibit to such joint filing. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of the 17th day of June, 1998. GENERAL MOTORS CORPORATION By: /s/ Martin I. Darvick ---------------------------- Name: Martin I. Darvick Title: Assistant Secretary HUGHES ELECTRONICS CORPORATION By: /s/ Pradman P. Kaul ---------------------------- Name: Pradman P. Kaul Title: Vice President EX-99.II 3 LOAN AGREEMENT 1 EXHIBIT II [EXECUTION COPY] LOAN AGREEMENT THIS LOAN AGREEMENT (this "Agreement") is made as of the 21st day of December, 1995, by and among GEOTEK FINANCING CORPORATION, a Delaware corporation (the "Borrower"), GEOTEK COMMUNICATIONS, INC., a Delaware corporation and the corporate parent of the Borrower ("Geotek" or the "Guarantor") and HUGHES NETWORK SYSTEMS, INC., a Delaware corporation (the "Lender"). The parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement: "Acquired 900 MHz License Purchase Price" means, with respect to any Acquired 900 MHz License (and related Third-Party 900 MHz License Assets, if applicable), the full purchase price (whether in cash, stock or other form of consideration) paid (or to be paid) by Holdings for such Acquired 900 MHz License (and related Third-Party 900 MHz License Assets, if applicable). To the extent that any portion of any Acquired 900 MHz License Purchase Price includes consideration other than cash or stock, the value of such consideration shall be determined in good faith by the Board of Directors of Geotek. "Acquired 900 MHz Licenses" means the Auction 900 MHz Licenses and the Third-Party 900 MHz Licenses. "Affiliate" means any Person directly or indirectly controlling, controlled by or under direct or indirect common control with Geotek or any of its Subsidiaries. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise. "Agreement Accounting Principles" means GAAP in effect at the time of the preparation of the financial statements referred to in Section 4.4, applied in a manner consistent with that used in preparing such statements. "Article" means an article of this Agreement unless another document is specifically referenced. "Auction 900 MHz Licenses" means the 900 MHz Licenses to be purchased by Holdings from the FCC with the proceeds of the Loans. 2 "Business Day" means a day on which banks are open for business in New York, New York and Baltimore, Maryland. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated) of such Person's capital stock, and any rights (other than debt securities convertible into capital stock), warrants or options exchangeable for or convertible into such capital stock. "Capitalized Lease" of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "Capitalized Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person, prepared in accordance with Agreement Accounting Principles. "Collateral" means those assets of the Borrower in which the Lender has been granted a security interest pursuant to the Pledge Agreement to secure payment of the Obligations. "Commission" means the United States Securities and Exchange Commission. "Common Stock" means, with respect to any person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of, such person's common stock, whether outstanding on the date hereof or issued after the date hereof, and includes, without limitation, all series and classes of such common stock, in each case, to the extent that such series or class of common stock does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "Controlled Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Geotek or any Subsidiary, are treated as a single employer under Section 414(b) or 414(c) of the Internal Revenue Code of 1986, as amended from time to time. "Default" means an event described in Article VII. "Disclosure Letter" means the letter delivered by the Obligors to the Lender pursuant to Article IV hereof, which letter shall describe, on a Section-by- 2 3 Section basis, any exceptions to the representations and warranties set forth in such Article, and which letter is expressly made a part hereof as if contained herein. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. "Federal Bankruptcy Code" means Title 11, United States Code, as amended from time to time. "FCC" means the Federal Communications Commission or any other regulatory body which succeeds to the functions of the Federal Communications Commission. "FCC License" means any license, permit or authorization issued by the FCC. "Funding Cutoff Date" means June 30, 1996. "Funding Date" means the Initial Funding Date and each Subsequent Funding Date. "GAAP" means generally accepted accounting principles. "Guaranty" of a Person means any agreement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement or take-or-pay contract and shall include, without limitation, the contingent liability of such Person in connection with any application for a Letter of Credit. When used as a verb, the words "guaranty" and "guarantee" shall have correlative meanings. "Holder" means the Lender and any other holder of Registrable Securities to whom the Lender has properly transferred Registrable Securities in accordance with the terms hereof. "Holdings" means Geotek License Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Borrower. 3 4 "Holdings Note" means a promissory note in substantially the form of Exhibit C hereto, duly executed and delivered to the Borrower by Holdings in the face principal amount of $24,500,000. "Indebtedness" of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property (other than accounts payable arising in the ordinary course of such Person's business on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens on property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances or other similar instruments (including interest rate protection and other derivative agreements), (v) Capitalized Lease Obligations and (vi) obligations for which such Person is obligated pursuant to a Guaranty. "Indenture" means that certain Indenture, dated as of June 30, 1995, between Geotek, as Issuer, and IBJ Schroder Bank & Trust Company, as Trustee, relating to Geotek's 15% Senior Secured Discount Notes due 2005. "Initial Funding Date" means the Business Day on which the Lender makes the first Loan to the Borrower hereunder, which date shall not be prior to January 2, 1996, and, subject to the satisfaction of the conditions set forth in Article III hereof, shall be selected by the Borrower. "Initial Loan" means the Loan to be made to the Borrower on the Initial Funding Date. "Investment" of a Person means any loan, advance, extension of credit (excluding accounts receivable arising in the ordinary course of business), deposit account (other than deposit accounts used for the payment of obligations in the ordinary course of business otherwise permitted hereunder) or contribution of capital by such Person to any other Person or any investment in, or purchase or other acquisition of, the stock, notes, debentures or other securities of any other Person made by such Person, excluding trade credit in the ordinary course of business and investments paid for solely in nonredeemable Capital Stock of such Person. "Letter of Credit" of a Person means a letter of credit or similar instrument which is issued upon the application of such Person, upon which such Person is an account party or for which such Person is in any way liable. "Lien" of a Person means any security interest, mortgage, pledge, hypothecation, assignment, lien (statutory or other), claim, charge, encumbrance, title retention agreement, lessor's interest under a Capitalized Lease or analogous instrument, in, of or on any property of such Person. 4 5 "Loan Amount" shall mean the principal amount of any Loan made hereunder. "Loans" means the loans made by the Lender to the Borrower hereunder and "Loan" means any of them. "Loan Documents" means this Agreement, the Note, the Pledge Agreement and any other document or agreement executed and delivered in connection herewith. "Material Adverse Effect" means (a) a material adverse effect upon the business, operations, properties, assets, condition (financial or otherwise) or prospects of either of the Obligors and their respective Subsidiaries, taken as a whole or (b) the impairment in any material respect of the ability of any of the Obligors to perform their respective obligations under any Loan Document or of the Lender to enforce or collect any of the Obligations. "Multiemployer Plan" means a Plan that is a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to Geotek or any member of the Controlled Group is obligated to make contributions. "900 MHz Licenses" means FCC Licenses to construct and operate 900 MHz Specialized Mobile Radio systems. "NASD" means the National Association of Securities Dealers, Inc. "Note" means a promissory note in substantially the form of Exhibit A hereto, duly executed and delivered to the Lender by the Borrower in the face principal amount of $24,500,000, including any amendment, modification, renewal or replacement of such promissory note. "Obligations" means all unpaid principal of and accrued and unpaid interest on the Note, all accrued and unpaid fees and expenses and all other obligations (monetary and other) of the Obligors to the Lender arising under the Loan Documents, including, without limitation, any indemnity obligations under Annex B to this Agreement. "Obligors" means, collectively, the Borrower and Geotek, and their respective successors and assigns, and "Obligor" means either of the foregoing. "PBGC" means the Pension Benefit Guaranty Corporation and its successors and assigns. "Permitted Liens" means the following types of Liens: 5 6 (a) Liens for taxes, assessments or governmental charges or claims either (i) not delinquent or (ii) contested in good faith by appropriate proceedings and as to which the Borrower or any of its Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP; (b) judgment Liens not giving rise to a Default if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; and (c) Liens created under the Pledge Agreement. "Person" means any corporation, natural person, firm, joint venture, partnership, trust, unincorporated organization, enterprise, limited liability company or other entity, government or any department or agency of any government. "Plan" means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code as to which Geotek or any Subsidiary may have any liability. "Pledge Agreement" means a Pledge Agreement, dated as of the date hereof, between the Borrower and the Lender, substantially in the form attached hereto as Exhibit B. "Registrable Securities" means the Common Stock of Geotek issued or issuable upon conversion of the Loans. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (B) they shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, (C) they shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by Geotek and subsequent disposition of them shall not require registration or qualification of them under the Securities Act or any similar state law then in force, (D) they shall have ceased to be outstanding, or (E) they are otherwise no longer Transfer Restricted Securities. "Registration Expenses" means all expenses incident to Geotek's performance of or compliance with Annex B hereof, including, without limitation, all registration and filing fees, all fees and expenses of complying with securities or blue sky laws, fees and other expenses associated with filings with the NASD, all 6 7 printing expenses, the fees and disbursements of counsel for Geotek and of its independent public accountants, the expenses of any special audits made by such accountants required by or incident to such performance and compliance, but not including (a) fees and disbursements of counsel retained by the Holders, or (b) underwriting discounts and commissions payable with respect to the Holders' Registrable Securities. "Regulation G" means Regulation G of the Board of Governors of the Federal Reserve System from time to time in effect and shall include any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by Persons other than banks, brokers or dealers for the purpose of purchasing or carrying margin stock. "Rentals" of a Person means the aggregate amounts payable by such Person under any lease of real or personal property having an original term (including any required renewals or any renewals at the option of the lessor or lessee) of one year or more but does not include any amounts payable under Capitalized Leases of such Person. "Reportable Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided that a failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code and of Section 302 of ERISA shall be a reportable event regardless of the issuance of any waiver in accordance with Section 412(d) of the Internal Revenue Code. "Section" means a numbered section of this Agreement, unless another document is specifically referenced. "Securities Act" means the Securities Act of 1933, as amended from time to time. "Single Employer Plan" means a Plan maintained by Geotek or any member of the Controlled Group for employees of Geotek or any member of the Controlled Group. "Subsequent Funding Date" means each date on which the Lender makes a Loan to the Borrower hereunder, after the Initial Funding Date. "Subsidiary" means any corporation more than 50% of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by Geotek or by one or more Subsidiaries or by Geotek and one or more Subsidiaries, or any similar business organization which is so owned or controlled. 7 8 "Third-Party 900 MHz License Assets" means assets relating to or used in the operation of Specialized Mobile Radio systems under Third-Party 900 MHz Licenses to be acquired by Holdings with the proceeds of the Loans in connection with the acquisition of such Third-Party 900 MHz Licenses. "Third-Party 900 MHz Licenses" means 900 MHz Licenses (or 100% of the equity interests in Persons whose sole assets are unencumbered 900 MHz Licenses and related Third-Party 900 MHz License Assets (all of which shall be free and clear of Liens)) for the Detroit and Los Angeles metropolitan markets or for any of the thirty-seven (37) other metropolitan markets previously publicly disclosed by Geotek as being markets in which Geotek or its Subsidiaries currently holds 900 MHz Licenses, to be purchased by Holdings from certain third parties (other than the FCC) with the proceeds of the Loans. "Total Acquired 900 MHz License Purchase Price" means the aggregate Acquired 900 MHz License Purchase Price paid (or to be paid) by Holdings for all Acquired 900 MHz Licenses (and related Third-Party 900 MHz License Assets, if any). "Trading Day" means, with respect to a securities exchange or automated quotation system, a day on which such exchange or system is open for trading. "Transfer Restricted Securities" means the Common Stock of Geotek issuable upon conversion of the Loans, until such Common Stock (i) has been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering it, (ii) is distributed to the public pursuant to Rule 144, (iii) may be sold or transferred pursuant to Rule 144(k) (or any similar provisions then in force) under the Securities Act or otherwise or (iv) may be sold freely in full in any one three month period before Rule 144(k) is available. "Unfunded Liabilities" means, on any date of determination, (a) in the case of Single Employer Plans, all "unfunded benefit liabilities" as defined in Section 4001(a)(18) of ERISA, and (b) in the case of Multiemployer Plans, the liability of Geotek and its Subsidiaries if they were to incur a complete or partial withdrawal from any Multiemployer Plan. "Unmatured Default" means an event which, but for the lapse of time or the giving of notice, or both, would constitute a Default. "Wholly-Owned Subsidiary" means any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by Geotek or one or more Wholly-Owned Subsidiaries, or by Geotek and one or more Wholly-Owned Subsidiaries, or any similar business organization which is so owned or controlled. 8 9 The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. ARTICLE II THE LOANS 2.1. The Loans. Subject to the terms and conditions hereinafter set forth, commencing on the Initial Funding Date, the Lender agrees to make one or more (but not more than one on any day) Loans to the Borrower in the aggregate principal amount of the lesser of (i) eighty percent (80%) of the Total Acquired 900 MHz License Purchase Price and (ii) $24,500,000; provided that at no time shall the aggregate amount of the principal amount of all Loans outstanding be greater than eighty percent (80%) of the aggregate Acquired 900 MHz License Purchase Price of all Acquired 900 MHz Licenses (and related Third-Party 900 MHz License Assets, if any) purchased by Holdings with the proceeds of such Loans. The Loans shall be evidenced by the Note and secured by the Collateral. The unpaid principal balance and any accrued but unpaid interest owing on all Loans shall be payable in full on the second anniversary of the Initial Funding Date (the "Maturity Date"). The Lender's obligation to make Loans hereunder shall terminate on the Funding Cutoff Date. 2.2. Interest. Prior to the occurrence of a Default, the Loans shall bear interest, payable quarterly in arrears on (a) the last day of each calendar quarter hereafter commencing on the later of (i) March 31, 1996 and (ii) the last day of the first calendar quarter ending after the Initial Funding Date, and (b) on the Maturity Date, at a fixed rate per annum equal to twelve percent (12%). From and after the occurrence of a Default, the Loans shall bear interest, payable on demand, at a fixed rate per annum equal to eighteen percent (18%). All interest shall be computed for actual days elapsed on the basis of a 360-day year. In computing interest on any Loan, the Funding Date of such Loan shall be included and the date of payment shall be excluded so long as such payment is received by the Lender at or before 12:00 p.m. (New York time) on the date when due. 2.3. Interest Laws. Notwithstanding any provision to the contrary contained in this Agreement or the other Loan Documents, the Borrower shall not be required to pay, and the Lender shall not be permitted to collect, any amount of interest in excess of the maximum amount of interest permitted by law ("Excess Interest"). If any Excess Interest is provided for or determined by a court of competent jurisdiction to have been provided for in this Agreement or in any of the other Loan Documents, then in such event: (1) the provisions of this subsection shall govern and control; (2) the Borrower shall not be obligated to pay any Excess Interest; (3) any Excess Interest that the Lender may have received hereunder shall be, at the Lender's option, (a) applied as a credit against the outstanding principal balance of the Obligations or accrued and unpaid interest (not to exceed the maximum amount permitted by law), (b) refunded to the payor thereof, or (c) any 9 10 combination of the foregoing; (4) the interest rate(s) provided for herein shall be automatically reduced to the maximum lawful rate allowed from time to time under applicable law (the "Maximum Rate"), and this Agreement and the other Loan Documents shall be deemed to have been, and shall be, reformed and modified to reflect such reduction; and (5) the Borrower shall not have any action against the Lender for any damages arising out of the payment or collection of any Excess Interest. Notwithstanding the foregoing, if for any period of time interest on any Obligations is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the Maximum Rate, the rate of interest payable on such Obligations shall remain at the Maximum Rate until the Lender shall have received the amount of interest which the Lender would have received during such period on such Obligations had the rate of interest not been limited to the Maximum Rate during such period. 2.4. Method of Funding Loan. (a) If the proceeds of a Loan are to be used concurrently with the making of such Loan to purchase any Auction 900 MHz Licenses, then not later than 12:00 noon (New York time) on the applicable Funding Date, the Lender shall make available the applicable Loan Amount in funds immediately available by wire-transferring such funds to the Borrower, which shall promptly remit such funds to the FCC (or to Holdings for prompt remittance to the FCC). (b) If the proceeds of a Loan are to be used concurrently with the making of such Loan to purchase any Third-Party 900 MHz Licenses and related Third-Party 900 MHz License Assets, then not later than 12:00 noon (New York time) on the applicable Funding Date, the Lender shall make available the applicable Loan Amount in funds immediately available by wire-transferring such funds to the Borrower, which shall promptly remit such funds to the seller of such Licenses and Assets (or to Holdings for prompt remittance to such seller). (c) If the proceeds of a Loan are to be used subsequent to the applicable Funding Date to purchase any Acquired 900 MHz Licenses and, if applicable, any related Third-Party 900 MHz License Assets, then not later than 12:00 noon (New York time) on the applicable Funding Date, the Lender shall make available the applicable Loan Amount in funds immediately available by wire- transferring such funds to an escrow account to be established by the Lender and the Borrower with an escrow agent and subject to an escrow agreement reasonably acceptable to the Lender and the Borrower (the "Escrow Account"). The Loan Amount shall not be released from the Escrow Account until the Lender and the Borrower certify to the Escrow Agent in writing that no Default or Unmatured Default is then continuing and that such Loan Amount will be used concurrently with its release from escrow to purchase one or more Acquired 900 MHz Licenses and, if applicable, related Third-Party 900 MHz License Assets and such funds shall be distributed by the Escrow Agent directly to the FCC or other third-party seller, as applicable. Any funds remaining in the Escrow Account on 10 11 the Maturity Date (or upon the occurrence of any Default), shall be immediately returned to the Lender. 2.5. Method of Payment. All payments of principal, interest and expenses hereunder shall be made by wire transfer in immediately available funds to the Lender at the First National Bank of Maryland, Baltimore MD 21203, ABA# 052000113, Account No. 401-5029-0 (for the account of Hughes Network Systems, Inc.) by noon (New York time) on the date when due. If any payment of principal of or interest on the Loan shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment. 2.6. Schedule to Note. The Borrower hereby authorizes the Lender to endorse on the Schedule annexed to the Note the principal amount of all Loans made by the Lender to the Borrower as well as all reductions to the aggregate principal amount of the Loans related to the conversion of such principal amount to shares of Common Stock of Geotek as provided in Article IX hereof; provided, that the failure to make any such notations on such Schedule (or any error in such notation) shall not limit or otherwise affect the obligations of the Borrower under this Agreement or the Note. 2.7. No Prepayment. The Borrower may not prepay the Loans, in whole or in part, prior to the Maturity Date; provided that this shall not limit or affect the rights of the Lender under Article VIII. ARTICLE III CONDITIONS PRECEDENT 3.1. Conditions to Initial Loan. The Obligation of the Lender to make the Initial Loan hereunder is subject to the satisfaction of the following conditions: (i) On the date of execution of this Agreement, the Lender shall have received: (a) an original of this Agreement (including all Exhibits and Annexes thereto), the Disclosure Letter and the Pledge Agreement, duly-executed by each party hereto and thereto; (b) 100% of the outstanding Capital Stock of Holdings, together with stock powers duly executed in blank, in each case pursuant to the Pledge Agreement; (c) an incumbency certificate of each Obligor and of Holdings, executed by the Secretary or an Assistant Secretary thereof, which shall 11 12 identify by name and title and bear the signature of the officers of such Obligor authorized to sign the Loan Documents and (in the case of the Borrower) to make borrowings hereunder, upon which certificate the Lender shall be entitled to rely until informed of any change in writing by such Obligor; (d) a copy of the Certificate of Incorporation of each of the Obligors and of Holdings, together with all amendments thereto, certified by the appropriate governmental officer in its jurisdiction of incorporation; (e) a copy of the By-Laws of each of the Obligors and of Holdings, together with all amendments thereto, certified by the Secretary or an Assistant Secretary of such Obligor; (f) a copy, certified by the Secretary or an Assistant Secretary of such Obligor or Holdings (as applicable), of each Obligor's and Holding's resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for the Lender) authorizing the execution, delivery and performance of the Loan Documents to be executed by it and the transactions contemplated thereby; and (ii) On the Initial Funding Date the Lender shall have received: (a) the Note; and (b) the Holdings Note, duly endorsed in blank. (c) certificates of good standing for each of the Obligors certified by the appropriate governmental officer in its jurisdiction of incorporation and in the State of New Jersey; (d) a written opinion of counsel to the Obligors and Holdings, dated as of the Initial Funding Date, addressed to the Lender, with respect to matters customary in transactions of the type contemplated by this Agreement, in form and substance reasonably satisfactory to the Lender and its counsel. 3.2. Conditions to Each Loan. The Obligation of the Lender to make each Loan hereunder is subject to the satisfaction of the following conditions: (i) No less than three (3) Business Days prior to the applicable Funding Date, the Borrower shall have furnished the Lender with a written certificate signed by the Chief Financial Officer of the Borrower, (a) selecting the proposed Funding Date and the Loan Amount, which selections shall be irrevocable; 12 13 (b) specifying the Acquired 900 MHZ Licenses and, if applicable, related Third-Party 900 MHz License Assets to be purchased with the proceeds of the Loan and the Acquired 900 MHz License Purchase Price applicable to such licenses and assets; (c) if the Acquired 900 MHz Licenses to be acquired with the proceeds of the Loan are Auction 900 MHz Licenses, attaching evidence satisfactory to the Lender that either (1) such Auction 900 MHz Licenses will be issued by the FCC in the name of Holdings immediately upon payment of the purchase price therefor or (2) certifying that Geotek was the high bidder in the auction for such licenses and has an obligation to pay a specified purchase price therefor at a future date; (d) if the Acquired 900 MHz Licenses to be acquired are Third-Party 900 MHz Licenses, attaching either (1) evidence satisfactory to the Lender that such Third-Party 900 MHz License (and any related Third-Party 900 MHz License Assets) will be sold and legally transferred to Holdings immediately upon payment of the purchase price therefor or (2) a certified copy of the duly-executed contract governing the purchase of such licenses and assets and providing a good faith estimate of the closing date for such purchase; and (e) providing the Lender with appropriate wire-transfer instructions. (ii) on the applicable Funding Date the Borrower shall have delivered to the Lender a certificate signed by the Chief Financial Officer of the Borrower, (a) certifying that no Default or Unmatured Default shall have occurred and be continuing on such date after giving effect to the making of the Loan by the Lender and that each of the representations and warranties contained in Article IV is true and correct as of such Funding Date; and (b) certifying that each of the conditions set forth in this Article III has been satisfied. (iii) On the applicable Funding Date the Lender shall have a valid and perfected first priority security interest (subject to Permitted Liens) in all of the Collateral owned by the Borrower on the Funding Date. 13 14 ARTICLE IV REPRESENTATIONS AND WARRANTIES Each of the Obligors represents and warrants to the Lender that, except as otherwise set forth in the Disclosure Letter: 4.1. Corporate Existence and Standing. Each of Geotek and its Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to so qualify would not have a Material Adverse Effect. 4.2. Authorization and Validity. Each of the Obligors has the corporate power and authority to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by the Obligors of the Loan Documents to which each is a party and the performance of their obligations thereunder have been duly authorized by proper corporate proceedings, and the Loan Documents constitute legal, valid and binding obligations of such Obligors enforceable against such Obligors in accordance with their terms, except as enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally. 4.3. Compliance with Laws and Contracts. Neither the execution and delivery by each Obligor of the Loan Documents to which it is a party, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof, will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Geotek or any of its Subsidiaries or Geotek's or any such Subsidiary's articles or certificate of incorporation or by-laws or the provisions of any indenture, instrument or agreement to which Geotek or any such Subsidiary is a party or is subject, or by which it, or its property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the property of Geotek or any such Subsidiary pursuant to the terms of any such indenture, instrument or agreement, except where such violation, conflict, default or Lien would not have a Material Adverse Effect. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents (except, with respect to enforceability of the remedies provided for in the Pledge Agreement, the requirement to obtain FCC approval before effecting any transfer of any FCC License). 4.4. Financial Statements. The September 30, 1995 consolidated financial statements of Geotek and its Subsidiaries heretofore delivered to the 14 15 Lender were prepared in accordance with GAAP in effect on the date such statements were prepared and consistent with prior periods and fairly present the consolidated financial condition and operations of Geotek and its Subsidiaries at such date and the consolidated results of their operations for the period then ended. 4.5. Material Adverse Change. No material adverse change in the business, condition (financial or otherwise), prospects or results of operations of Geotek and its Subsidiaries (on a consolidated basis) has occurred since the date of the financial statements referred to in Section 4.4. 4.6. Taxes. Geotek and its Subsidiaries have filed all United States federal tax returns and all other tax returns which are required to be filed prior to the date hereof and have paid all taxes due pursuant to said returns or pursuant to any assessment received by Geotek or any such Subsidiary (except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided), except, with respect only to Subsidiaries of Geotek other than the Borrower and its Subsidiaries, where the failure to so file or pay would not have a Material Adverse Effect. No tax liens have been filed, and no claims are being asserted with respect to any such taxes, except, with respect only to Subsidiaries of Geotek other than the Borrower and its Subsidiaries, where such tax liens or claims would not have a Material Adverse Effect. The charges, accruals and reserves on the books of Geotek and its Subsidiaries in respect of any taxes or other governmental charges are adequate, except, with respect only to Subsidiaries of Geotek other than the Borrower and its Subsidiaries, where the failure to maintain adequate charges, accruals or reserves would not have a Material Adverse Effect. 4.7. Litigation. There is no litigation or proceeding pending or, to the knowledge of any of their officers, threatened against or affecting Geotek or any of its Subsidiaries which might have a Material Adverse Effect. 4.8. ERISA. The Unfunded Liabilities of all Plans do not in the aggregate exceed $100,000. Each Plan complies in all material respects with all applicable requirements of law and regulations, and the minimum funding requirements with respect to all Plans have been met, no Reportable Event has occurred with respect to any Plan, no Lien in favor of the PBGC with respect to any Plan has arisen or been recorded, neither Geotek nor any of its Subsidiaries has withdrawn from any Plan or initiated steps to do so, and no steps have been taken to terminate any Plan. 4.9. Accuracy of Information. No information, schedule, exhibit or report furnished by Geotek to the Lender in connection with the negotiation of the Loan Documents contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading. 15 16 4.10. Material Agreements. None of Geotek, the Borrower or any of the Borrower's Subsidiaries is a party to any agreement or instrument or subject to any charter or other corporate restriction materially and adversely affecting its business, properties or assets, operations or condition (financial or otherwise). None of the Subsidiaries of Geotek, other than the Borrower and its Subsidiaries, are party to any agreement or instrument or subject to any charter or corporate restriction which, individually or when taken together with all other such agreements, instruments or restrictions of all such Subsidiaries, could have a Material Adverse Effect. Neither Geotek nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which it is a party, which default might have a Material Adverse Effect or (ii) any agreement or instrument evidencing or governing Indebtedness of Geotek. The Obligors have made available to the Lender copies of each agreement of Geotek which (a) evidences Indebtedness of Geotek or (b) if Geotek were to default in its obligations thereunder, might have a Material Adverse Effect. 4.11. Subordinated Indebtedness. The Obligations are not subordinate to any Indebtedness of the Obligors. The Borrower's Obligations are senior to all other Indebtedness of the Borrower. The Holdings Note is senior to Holding's Guaranty of the notes issued under the Indenture. 4.12. 900 MHz Licenses. Geotek and any of its Subsidiaries which hold or will hold 900 MHz Licenses (including Holdings) are fully qualified to hold 900 MHz Licenses. ARTICLE V COVENANTS During the term of this Agreement, unless the Lender shall otherwise consent in writing: 5.1. Reporting. Geotek will furnish to the Lender (a) Copies of all reports, certificates, documents and other information required to be delivered to the trustee under the Indenture pursuant to Sections 4.06 and 4.07 thereof (as in effect on the date hereof and whether or not the Indenture is then in effect). The copies of any such reports, certificates or documents that are addressed to such trustee shall be addressed to the Lender. (b) Within 45 days after the close of each fiscal quarter of the Borrower, a compliance certificate signed by the chief financial officer of the Borrower stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof. 16 17 (c) Within 270 days after the close of each fiscal year, a statement of the Unfunded Liabilities of each Plan, certified as correct by an actuary enrolled under ERISA. (d) As soon as possible and in any event within 10 days after Geotek knows that any Reportable Event has occurred with respect to any Plan or any Lien has been asserted by the PBGC or has arisen with respect to any Plan, a statement, signed by the chief financial officer of Geotek, describing said Reportable Event or Lien and the action which Geotek proposes to take with respect thereto. (e) No later than the first Business Day of each month between the date hereof and the Funding Cutoff Date (the "Reporting Period"), a written statement, based on the Borrower's good faith estimate, of the total dollar amount of Loans that the Borrower anticipates borrowing hereunder during each remaining month of the Reporting Period. At any time that the Borrower shall discover that its most recent statement made pursuant hereto is no longer accurate, the Borrower shall provide the Lender with an amended statement of the Borrower's revised estimate. (f) Such other information as the Lender may from time to time reasonably request. 5.2. Use of Proceeds. (a) The proceeds of the Loans (the "Loan Proceeds") shall be re-loaned directly to Holdings, which loans will be evidenced by the Holdings Note. The Borrower will cause Holdings to use the Loan Proceeds solely as payment for the acquisition of Acquired 900 MHz Licenses (and other 900 MHz Licenses (and related assets) acquired with the prior written consent of the Lender, which consent may be withheld in the Lender's sole discretion) and related Third-Party 900 MHZ License Assets. Geotek will not, nor will it permit any of its Subsidiaries to, use any of the Loan Proceeds to purchase or carry any "Margin Stock" (as defined in Regulation G). (b) Subject to the limitations on Loans set forth in Section 2.1 hereof, to the extent proceeds of the Loans are available therefor, the Borrower will cause Holdings to use the proceeds of the Loans for the purchase of any Acquired 900 MHz Licenses (and related 900 MHz License Assets) before using any unaffiliated third-party funds for such purchase. Notwithstanding the foregoing, nothing in this Section 5.2(b) shall be deemed to give the Lender any right to cause the Borrower to request the making of Loans after the Funding Cutoff Date. 5.3. Notice of Default. Geotek will, and will cause each of its Subsidiaries to, give prompt notice in writing to the Lender of the occurrence of any Default or Unmatured Default and of any other development, financial or otherwise, which might have a Material Adverse Effect. 17 18 5.4. Conduct of Business. Geotek will, and will cause each of its Subsidiaries to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and to do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to do so would not have a Material Adverse Effect. The Borrower will engage in no business or transaction other than the holding of the capital stock of Holdings and certain other Subsidiaries formed to hold certain assets to be used directly for the provision of Specialized Mobile Radio services utilizing the Acquired 900 MHz Licenses. The Borrower will ensure that Holdings engages in no business or transaction other than the purchase and ownership of the Acquired 900 MHz Licenses (and other 900 MHz Licenses and related assets as permitted under Section 5.2 hereof) and related Third-Party 900 MHz License Assets, if any, and the entering into of license agreements with respect to such Acquired 900 MHz Licenses with other Subsidiaries of Geotek for such Subsidiaries' use in providing Specialized Mobile Radio services (pursuant to a license agreement) which does not otherwise cause a Default under this Agreement and which, by its terms, provides that it is cancelable in full at the sole discretion of Holdings upon a foreclosure by the Lender upon the Capital Stock of Holdings pledged to the Lender pursuant to the Pledge Agreement or any other transfer of such Capital Stock to the Lender or its designee). At least five (5) Business Days prior to entering into any such license agreement, Geotek will cause Holdings to deliver a copy thereof to the Lender. 5.5. Taxes. Geotek will, and will cause each of its Subsidiaries to, pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside. 5.6. Insurance. Geotek will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies insurance on all their property in such amounts and covering such risks as is consistent with sound business practice, and Geotek will furnish to the Lender upon request full information as to the insurance carried. 5.7. Compliance with Laws. Geotek will, and will cause each of its Subsidiaries to, comply with (i) all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject and (ii) the terms of all FCC Licenses held by it, including any obligation to construct facilities and place them in operation with a minimum number of sites and/or customers by a specified date, except where the failure to do so would not have a Material Adverse Effect. 18 19 5.8. Maintenance of Properties. Geotek will, and will cause each of its Subsidiaries to, do all things necessary to maintain, preserve, protect and keep its properties in good repair, working order and condition, and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times, except where the failure to do so would not have a Material Adverse Effect. 5.9. Inspection. Geotek will, and will cause each of its Subsidiaries to, permit the Lender, by its representatives and agents, to inspect any of the properties, licenses, corporate books and financial records of Geotek and each such Subsidiary, to examine and make copies of the books of accounts and other financial records of Geotek and each Subsidiary, and to discuss the affairs, finances and accounts of Geotek and each Subsidiary with, and to be advised as to the same by, their respective officers at such reasonable times and intervals as the Lender may designate. 5.10. Restricted Payments. The Borrower will not, nor will it permit any of its Subsidiaries to, (i) declare or pay any dividends on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock at any time outstanding, except that any of the Borrower's Subsidiaries may declare and pay dividends to the Borrower or to a Wholly-Owned Subsidiary of the Borrower or (ii) directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Indebtedness. 5.11. Indebtedness. The Borrower will not, nor will it permit any of its Subsidiaries to incur any Indebtedness other than the Loans (in the case of the Borrower), the Holdings Note (in the case of Holdings) and the Guarantees by the Borrower and Holdings required to be provided under the Indenture as in effect on the date hereof. 5.12. Merger. The Borrower will not, nor will it permit any of its Subsidiaries to, merge or consolidate with or into any other Person. 5.13. Sale of Assets. Subject to the proviso in the second sentence of this Section 5.13, the Borrower will not, nor will it permit any of its Subsidiaries to, lease, sell or otherwise dispose of all, or a substantial portion of, its property, assets or business to any other Person except for sales of inventory in the ordinary course of business. None of the Obligors will sell, assign or convey any interest in any of the Collateral; provided that Holdings may (a) enter into license agreements with respect to one or more of the Acquired 900 MHz Licenses as provided herein and (b) with the prior written consent of the Lender, which consent will not be unreasonably withheld, exchange one or more of the Acquired 900 MHz Licenses (each, an "Old 900 MHZ License") for other 900 MHz Licenses (each a "New 900 MHz License") which (i) meet all the criteria set forth herein for Acquired 900 MHz Licenses (including geographic restrictions) and (ii) after giving effect to such 19 20 exchange, do not cause the Obligors or Holdings to be in default of any of their obligations under the Loan Documents (including, without limitation, the other provisions of this Article 5 and the loan-to-value limitations set forth in Section 2.1). 5.14. Sale and Leaseback. The Borrower will not, nor will it permit any of its Subsidiaries to, sell or transfer any property in order to concurrently or subsequently lease as lessee such or similar property. 5.15. Investments and Acquisitions. The Borrower will not, nor will it permit any of its Subsidiaries to, make or suffer to exist any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or commitments therefor, or to create any new Subsidiary or to become or remain a partner in any partnership or joint venture, or to acquire any going business or all or substantially all of the assets of any Person or any division or business of a Person, whether through purchase of assets, merger or otherwise, except existing Investments in Subsidiaries in existence on the date hereof and the purchases of Acquired 900 MHz Licenses (and other 900 MHz Licenses) and related Third-Party 900 MHz License Assets contemplated hereby. 5.16. Guarantees. The Borrower will not, nor will it permit any of its Subsidiaries to, make or suffer to exist any Guaranty (including, without limitation, any Guaranty of the obligations of a Subsidiary of Geotek), other than the Guarantees by the Borrower and Holdings required to be provided under the Indenture as in effect on the date hereof. 5.17. Liens. The Borrower will not, nor will it permit any of its Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the property of the Borrower or any of its Subsidiaries (including, without limitation, the Acquired 900 MHz Licenses), except Permitted Liens. 5.18. Fixed Asset Expenditures. The Borrower will not, nor will it permit any of its Subsidiaries to, acquire any assets, other than the acquisition by the Borrower of the Holdings Note and the acquisition by Holdings of the Acquired 900 MHz Licenses (and related Third-Party 900 MHz License Assets) and other acquisitions expressly permitted pursuant to Section 5.2 hereof. 5.19. Rentals. The Borrower will not, nor will it permit Holdings to, create, incur or suffer to exist any obligations for Rentals. 5.20. Letters of Credit. The Borrower will not, nor will it permit any of its Subsidiaries to, apply for or become liable with respect to any Letter of Credit. 5.21. Affiliates. The Borrower will not, nor will it permit Holdings to, enter into any transaction with any Affiliate, except as expressly set forth in this 20 21 Agreement (including, without limitation, the entering into of license agreements with respect to one or more of the Acquired 900 MHz Licenses as provided herein). 5.22. Preservation of Licenses. The Borrower will not, and will not permit any of its Subsidiaries to, allow any FCC License held by it to lapse or be revoked or suspended. 5.23. Ownership of Borrower and Holdings. The Borrower shall at all times be a Wholly-Owned Subsidiary of Geotek and Holdings shall at all times be a Wholly-Owned Subsidiary of the Borrower. 5.24. Compliance with Indenture. Geotek shall, and shall cause each of its Subsidiaries to, comply with all covenants, restrictions and other agreements applicable to them in the Indenture as in effect on the date hereof (without giving effect to any amendments, waivers or other modifications thereof or supplements thereto, unless otherwise consented to in writing by the Lender, such consent not to be unreasonably withheld). 5.25. Auction 900 MHz Licenses. Promptly after the closing of the current FCC auction of 900 MHz Licenses and Geotek learning of the 900 MHz Licenses in respect of which it was the highest bidder, Geotek will so inform the Lender. 5.26. Ownership of Acquired 900 MHz Licenses. All Acquired 900 MHz Licenses shall be issued in the name of, or transferred to, Holdings and not transferred by Holdings to any other Person (except the entering into of license agreements with respect to one or more of the Acquired 900 MHz Licenses as provided herein). 5.27. Right to Cause Refinancing of Loans. In the event that at any time on or after the date of execution of this Agreement and prior to February 28, 1996, Geotek or any of its Subsidiaries shall enter into any borrowing arrangement pursuant to which the person providing the funds (or its Affiliates) obtains the right to purchase equity of Geotek (a "Subject Credit"), the Lender, at its sole option, shall be entitled to cause Geotek (or the Borrower) to refinance the Loans in an amount up to $24,500,000 plus, upon agreement of Geotek and the Lender, an amount of reasonable fees and expenses incurred by Geotek in connection with the refinancing) on the terms of the Subject Credit. The Borrower will inform the Lender within one (1) Business Day after Geotek or any of its Subsidiaries enters into any such Subject Credit. Any amount of Loans not so refinanced shall remain outstanding subject to the terms and conditions of this Agreement and the other Loan Documents. 21 22 ARTICLE VI GUARANTY 6.1. The Guaranty. The Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Lender and its successors and assigns the full and punctual payment and performance (whether at stated maturity, upon acceleration or otherwise) of the Obligations, including all reasonable costs of collection and enforcement thereof (including, without limitation, all fees and disbursements of counsel) and interest thereon which would be owing by the Borrower but for the effect of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (collectively, the "Guaranteed Obligations"). The Guarantor understands, agrees and confirms that the Lender may enforce this Guaranty up to the full amount guaranteed by the Guarantor hereunder without proceeding against the Borrower or any other obligor, against the Collateral or against any other guarantor under any other guarantee covering the Guaranteed Obligations. All payments made by the Guarantor under this Guaranty shall be paid at the place and in the manner specified in Section 2.5 of this Agreement. 6.2. Guaranty Unconditional. The obligations of the Guarantor hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any Obligor under any of the Loan Documents, by operation of law or otherwise; (b) any modification or amendment of or supplement to this Agreement, the Note or any of the other Loan Documents, including, without limitation, any increase in the principal amount of the Loans; (c) any release, non-perfection or invalidity of any direct or indirect security herefor or for, or any other guarantee of, any of the Guaranteed Obligations; (d) any change in the corporate existence, structure or ownership of any of the Obligors, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any of the Obligors or any of their assets or any resulting release or discharge of any obligation of any Obligor contained in this Agreement or the Note; (e) the existence of any claim, set-off or other rights which the Guarantor may have at any time against any Obligor or any other Person, whether in connection herewith or with any unrelated transactions, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; 22 \ 23 (f) any invalidity or unenforceability relating to or against any Obligor for any reason of any of the Loan Documents, or any provision of applicable law or regulation purporting to prohibit the payment by the Borrower of the principal of or interest on the Loans or any other amount payable by it under the Loan Documents; or (g) any other act or omission to act or delay of any kind by any Obligor or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the Guarantor's obligations hereunder. In addition, the obligations of the Guarantor hereunder are joint and several with the obligations of each other guarantor or obligor in respect of the Guaranteed Obligations. 6.3. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances. The Guarantor's obligations hereunder shall remain in full force and effect until the Guaranteed Obligations shall have been paid in full. If at any time any payment of any of the Guaranteed Obligations is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, the Guarantor's obligations hereunder with respect to such payment shall be reinstated at such time as though such payment had been due but not made at such time. 6.4. Waivers by the Guarantor. The Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Borrower or any other Person. 6.5. Subrogation. The Guarantor shall not exercise any rights which it may have acquired by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, nor shall the Guarantor seek any reimbursement from the Borrower in respect of payments made by the Guarantor hereunder, unless and until all of the Guaranteed Obligations shall have been paid to the Lender and discharged, in full, and if any payment shall be made to the Guarantor on account of such subrogation, contribution or reimbursement rights at any time when the Guaranteed Obligations shall not have been paid and discharged, in full, each and every amount so paid shall forthwith be paid to the Lender to be credited and applied against the Guaranteed Obligations, whether matured or unmatured. 6.6. Stay of Acceleration. In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of this Agreement and the Note shall nonetheless be payable by the Guarantor forthwith on demand by the Lender. 23 24 ARTICLE VII DEFAULTS The occurrence of any one or more of the following events shall constitute a Default: 7.1. Any representation or warranty made or deemed made by or on behalf of either of the Obligors to the Lender under or in connection with this Agreement, the Note, any other Loan Document or any certificate or information delivered in connection herewith or therewith shall be materially false as of the date on which made. 7.2. (a) Nonpayment of principal of the Note when due, or (b) nonpayment of interest upon the Note or of any other Obligations under any of the Loan Documents within five (5) days of notice from the Lender of such nonpayment or, with respect to nonpayment of interest, if shorter, within eight (8) days of when due. 7.3. The breach by either Obligor of any of the terms or provisions of Article 5 and, where such breach is reasonably capable of cure and provided such breach has not otherwise caused a Material Adverse Effect, the failure of either Obligor to cure such breach within ten (10) days of becoming aware thereof. 7.4. The breach by either Obligor (other than a breach which constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this Agreement or the Note which is not remedied within ten (10) days after written notice from the Lender. 7.5. Failure of Geotek or any of its Subsidiaries to pay any Indebtedness in excess of $2,000,000 when due; or the default by Geotek or any of its Subsidiaries in the performance of any term, provision or condition contained in any agreement under which any Indebtedness in excess of $3,500,000 was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any Indebtedness in excess of $3,500,000 shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the stated maturity thereof. 7.6. Geotek, the Borrower or any of the Borrower's Subsidiaries shall (a) have an order for relief entered with respect to it under the Federal Bankruptcy Code, (b) not pay, or admit in writing its inability to pay, its debts generally as they become due, (c) make an assignment for the benefit of creditors, (d) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its property, (e) institute any proceeding seeking an order for relief under the Federal 24 25 Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (f) take any corporate action to authorize or effect any of the foregoing actions set forth in this Section 7.6, or (g) fail to contest in good faith any appointment or proceeding described in Section 7.7. 7.7. Without the application, approval or consent of Geotek, the Borrower or any of the Borrower's Subsidiaries, a receiver, trustee, examiner, liquidator or similar official shall be appointed for Geotek, the Borrower or any of the Borrower's Subsidiaries or any substantial part of their respective properties, or a proceeding described in Section 7.6(e) shall be instituted against Geotek, the Borrower or any of the Borrower's Subsidiaries and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 60 consecutive days. 7.8. Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of all or any substantial portion of the property of Geotek, the Borrower or any of the Borrower's Subsidiaries. 7.9. Geotek, the Borrower or any of the Borrower's Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge any judgment or order for the payment of money in excess of $1,000,000 which is not stayed on appeal or otherwise being appropriately contested in good faith. 7.10. The Unfunded Liabilities of all Plans shall exceed in the aggregate $1,000,000, any Lien in favor of the PBGC with respect to any Plan shall arise or be recorded, or any Reportable Event shall occur in connection with any Plan. 7.11. Any Lien, levy or assessment is filed or recorded with respect to or otherwise imposed upon all or any part of the Collateral by the United States or any department or instrumentality thereof or by any state, county, municipality or other governmental agency (other than Permitted Liens) and such lien, levy or assessment is not stayed, vacated, paid or discharged within ten (10) days. 7.12. Geotek, the Borrower or any of the Borrower's Subsidiaries is enjoined, restrained or in any way prevented by the order of any court or any administrative or regulatory agency from conducting all or any material part of its business and such order continues for more than thirty (30) days. 7.13. Any of the Loan Documents for any reason, other than a partial or full release in accordance with the terms thereof, ceases to be in full force and 25 26 effect or is declared to be null and void, or either Obligor denies that it has any further liability under any Loan Documents to which it is party, or gives notice to such effect. 7.14. Any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of Geotek or any of its Subsidiaries if any such event or circumstance could have a Material Adverse Effect. 7.15. The loss, suspension, revocation or amendment of, or failure to renew, any FCC License now held or hereafter acquired by Geotek or any of its Subsidiaries, if such loss, suspension, revocation, amendment or failure to renew could have a Material Adverse Effect. For purposes of this Section 7.15, the loss, suspension, revocation or failure to renew of any Auction 900 MHz License or (once acquired by Holdings) any Third-Party 900 MHz License, is deemed to have a Material Adverse Effect. 7.16. The FCC schedules or conducts a hearing with respect to, or commences an action or proceeding seeking the termination, suspension, revocation or material adverse amendment of, any FCC License now held or hereafter acquired by Geotek or any of its Subsidiaries (other than a hearing with respect to a pending competing application) and (i) the Lender reasonably believes that the result thereof would be the termination, revocation, suspension or material adverse amendment of such License and (ii) in the case of any Subsidiary of Geotek other than the Borrower or any of the Borrower's Subsidiaries, such termination, revocation, suspension or material adverse amendment would have a Material Adverse Effect. 7.17. Geotek or any of its Subsidiaries defaults in the payment of any other written obligation to the Lender in excess of $2,000,000, including, without limitation, with respect to any extension of trade credit by the Lender; provided that such default shall not be a Default if it is the subject of a good-faith dispute for no longer than ninety (90) days. 7.18. The Lender does not have or ceases to have a valid and perfected first priority security interest in the Collateral (subject to Permitted Liens), in each case, for any reason other than the failure of the Lender to take any action within its control. 7.19 Any judgment, order or ruling is entered, or partial or full resolution is reached, with respect to any litigation or proceeding listed in the Disclosure Letter (or any Schedule thereto), which judgment, order, ruling or resolution could have a Material Adverse Effect. 26 27 ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENT AND REMEDIES 8.1. Acceleration. If any Default described in Section 7.6 or 7.7 occurs, the Obligations shall immediately become due and payable without any election or action on the part of the Lender. If any other Default occurs, the Lender may declare the Obligations to be due and payable, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Obligors hereby expressly waive. 8.2. Preservation of Rights. No delay or omission of the Lender to exercise any right under the Loan Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Loan Documents whatsoever shall be valid unless in writing signed by the Lender, and then only to the extent in such writing specifically set forth. All remedies contained in the Loan Documents or by law afforded shall be cumulative and all shall be available to the Lender until the Obligations have been paid in full. ARTICLE IX CONVERSION 9.1 Conversion Privilege and Conversion Price. (a) Subject to and upon compliance with the provisions of this Article, at the option of the Lender, the outstanding principal amount of the Loans may be converted into fully paid and nonassessable shares (calculated as to each conversion to the nearest 1/100 of a share) of Common Stock of Geotek, at the Conversion Price, determined as hereinafter provided, in effect at the time of conversion. Such conversion right shall commence one hundred and eighty-one (181) days after the Initial Funding Date and shall expire on the Maturity Date (the "Conversion Period"). (b) The price per share (the "Conversion Price") at which shares of Common Stock shall be delivered upon conversion shall be the lesser of (i) ninety percent (90%) of the weighted average sales price of the Common Stock of Geotek on the Trading Day next preceding the date of conversion (or over the ten (10) Trading Days immediately preceding the date of conversion to the extent (and only to the extent) the conversion relates to in excess of $300,000 of Loans (to the extent of such excess) on the Trading Day next preceding the Maturity Date) as reported by Bloomberg Financial Services or similar reporting service and (ii) $9.75 (the "Maximum Conversion Price"). 27 28 9.2 Exercise of Conversion Privilege; Limitations on Exercise. (a) During the Conversion Period, the entire outstanding amount of the Loans shall be convertible into the Common Stock of Geotek as provided herein; provided that no more than $150,000 of the Loans may be converted into Common Stock of Geotek on any day, except that during the one hundred twenty-one (121) Trading Days immediately preceding the Maturity Date, up to $300,000 in principal amount of the Loans may be converted into Common Stock of Geotek on any day. (b) Notwithstanding the provisions of paragraph (a) above, on the Trading Day next preceding the Maturity Date, the Lender may convert the entire remaining principal balance of the Loans into shares of Common Stock of Geotek; provided that the Lender agrees not to resell in excess of $300,000 worth of such Common Stock on any Trading Day. (c) Notwithstanding the provisions of paragraph (a) above, on any Trading Day during the Conversion Period the Lender shall have the right to convert the entire remaining balance of the Loans into shares of Common Stock of Geotek at the Maximum Conversion Price; provided that, with respect to any such amount so converted on such day, the Lender agrees not to resell in excess of $300,000 worth of such Common Stock on any Trading Day. (d) Notwithstanding the foregoing, upon the occurrence and during the continuance of a Default, up to the entire remaining amount of the Loans may be converted by the Lender into shares of Common Stock of Geotek on any day with no contractual restrictions on the ability of the Lender to resell such Common Stock at any time; provided that, if the Lender chooses to so convert the entire remaining amount of the Loans (or any Lesser amount in excess of $300,000), the Borrower may, at its option, prior to the time set for such conversion, prevent the Lender from so converting by paying the Lender in immediately available funds (i) all outstanding principal and interest on the Loans (and all other amounts then due under the Loan Agreement and the other Loan Documents) and (ii) a dollar amount equal to the greater of (A) the number of shares of Common Stock of Geotek which the Lender would otherwise be entitled to receive upon such conversion but for the exercise by the Borrower of its buyout option under this Section 9.2(d) multiplied by ten percent (10%) of the weighted average sales price of shares of Common Stock of Geotek on the Trading Day immediately preceding the date set for conversion and (B) the number of shares of Common Stock of Geotek which the Lender would otherwise be entitled to receive upon such conversion but for the exercise by the Borrower of its buyout option under this Section 9.2(d) multiplied by the difference obtained by subtracting the Maximum Conversion Price from the weighted average sales price of shares of Common Stock of Geotek on the Trading Day immediately preceding the date set 28 29 for conversion. Such weighted average sales price shall be as reported by Bloomberg Financial Services or similar reporting service. The amount payable pursuant to clause (ii) of this Section 9.2(d) shall be payable, at the Borrower's option, in cash or Common Stock of Geotek (at the per share valuation described in such clause). Nothing in this paragraph (d) shall prevent the Lender from converting any or all of the Loans pursuant to, and in the manner provided for in, any other paragraph of this Section 9.2, even during the continuance of a Default or from exercising any other remedies available to it hereunder or under applicable law upon the occurrence and continuance of a Default (including, without limitation, the right to accelerate the Loans and foreclose upon the Collateral). (e) The Lender shall exercise its conversion privilege on any Trading Day during the Conversion Period (a "Conversion Date") by informing Geotek and the Borrower in writing of the amount of Loans to be so converted (the "Conversion Amount") and the Conversion Price. Conversion of such Loans shall be deemed to have been effected on the Conversion Date and at such time the rights of the Lender to receive principal payments or interest on the Converted Amount shall cease and the person or persons in whose name or names any certificate or certificates for shares of common stock shall be issuable upon conversion of the Converted Amount (as designated by the Lender) shall be deemed to have become the holder or holders of record of such shares. Geotek shall, at the request of the Lender, either (i) cause a certificate or certificates representing the converted shares of Common Stock of Geotek to be issued and delivered to or at the direction of the Lender or (ii) cause the issuance of the converted shares of Common Stock of Geotek in registered form and the recording thereof in the book-entry system maintained by The Depositary Trust Company, in either case within (3) three days of such request. If Geotek breaches its obligation to deliver share certificates or cause book-entries hereunder, such breach shall not be subject to any cure period otherwise available under Article VII hereof and the Lender may, in addition to its other remedies hereunder and at law, bring an action to enforce specific performance of such obligation and, until such certificates are properly delivered or such book-entries are properly made, as the case may be, the principal amount of the Loans so converted shall be deemed reinstated with interest deemed to have been accruing continuously notwithstanding such conversion. (f) The Maximum Conversion Price shall be adjusted in certain circumstances as provided in Annex A attached hereto and made a part hereof. (g) Until such time as the Lender has sold all shares of Common Stock of Geotek which it has received or may receive pursuant to its conversion rights hereunder, and subject to the other resale restrictions contained in this Article IX, the Lender may not sell on any day more shares of Geotek than it owns on such day (including shares in respect of which it has or will properly exercise its 29 30 conversion rights on such day). Nothing in this Section 9.2 shall restrict the ability of the Lender to sell, assign or otherwise transfer the Note and its rights and obligations under the other Loan Documents (including the right to convert the Loans into shares of Common Stock of Geotek) in accordance with Section 10.1 hereof. 9.3 Fractions of Shares. No fractional shares of Common Stock shall be issued upon conversion of the Loans. Instead of any fractional share of Common Stock which would otherwise by issuable upon conversion of any of the Loans, Geotek shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the closing price per share of the Common Stock at the close of business on the day of conversion. 9.4 Notice of Certain Corporate Activities. In case: (a) Geotek shall declare a dividend (or any other distribution) on its Common Stock payable otherwise than exclusively in cash; or (b) Geotek shall authorize the granting to all of the holders of its Common Stock, pro rata, of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any other rights (excluding employee stock options); or (c) of any reclassification of the Common Stock of Geotek (other than a subdivision or combination of its outstanding shares of Common Stock), or of any consolidation or merger to which Geotek is a party and for which approval of any stockholders of Geotek is required, or of the sale or transfer of all or substantially all of the assets of Geotek; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of Geotek; or (e) Geotek or any Subsidiary of Geotek shall commence a tender offer for all or a portion of Geotek's outstanding shares of Common Stock (or shall amend any such tender offer); then Geotek shall notify the Lender in accordance with Section 11.1 hereof, at least 20 days (or 10 days in any case specified in clause (a), (b) or (e) above) prior to the applicable record, effective or expiration date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer, 30 31 dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up, or (z) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of any amendment thereto). 9.5. Geotek to Reserve Common Stock. Geotek shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, for the purpose of effecting the conversion of the Loans, the full number of shares of Common Stock then issuable upon the conversion of all outstanding Loans. 9.6. Taxes on Conversions. Geotek will pay any and all transfer taxes that may be payable in respect of the issue or delivery of shares of Common Stock on conversion of Loans pursuant hereto. Geotek shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock in a name other than that of the Lender, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to Geotek the amount of any such tax, or has established to the satisfaction of Geotek that such tax has been paid. 9.7. Covenant as to Common Stock. Geotek covenants that all shares of Common Stock which may be issued upon conversion of Loans will upon issue be fully paid and nonassessable and, except as provided in Section 9.6, Geotek will pay all transfer taxes, liens and charges with respect to the issue thereof. 9.8. Provisions in Case of Consolidation, Merger or Sale of Assets. In case of any consolidation of Geotek with, or merger of Geotek into, any other Person, any merger of another Person into Geotek (other than a merger which does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of Geotek) or any sale or transfer of all or substantially all of the assets of Geotek, the Person formed by such consolidation or resulting from such merger or which acquires such assets, as the case may be, shall grant to the Lender the right thereafter, during the Conversion Period, to convert the Loans only into the kind and amount of securities, cash and other property receivable, if any, upon such consolidation, merger, sale or transfer by the Lender of the number of shares of Common Stock of Geotek into which the Loans might have been converted immediately prior to such consolidation, merger, sale or transfer assuming the Lender failed to exercise its rights of election, if any, as to 31 32 the kind or amount of securities, cash and other property receivable upon such consolidation, merger, sale or transfer. The Lender shall continue to enjoy rights of adjustment with respect to the Maximum Conversion Price as nearly equivalent as may be practicable to the adjustments provided for in Annex A. The above provisions of this Section shall similarly apply to successive consolidations, mergers, sales or transfers. 9.9. Registration Rights. The shares of Common Stock of Geotek issued hereunder shall be entitled to the registration rights set forth in Annex B attached hereto and made a part hereof. 32 33 ARTICLE X GENERAL PROVISIONS 10.1. Successors and Assigns. (a) The terms and provisions of the Loan Documents shall be binding upon and inure to the benefit of the Obligors and the Lender and their respective successors and assigns. (b) Subject to the Securities Act and applicable state securities laws, the Lender may sell, assign or otherwise transfer the Note, subject to the terms thereof (and its rights and obligations under the other Loan Documents), in whole or in part (but in parts representing no less than $8,000,000 in principal amount), to any Person who is an "Accredited Investor" (as defined in the Securities Act) other than (except after occurrence and during the continuance of a Default, when no restrictions on sale, assignment or transfer shall apply) a "hedge fund" or a competitor of Geotek engaged or, to the knowledge of HNS, planning to engage in the business of providing wireless voice or data communications services to mobile customers or of providing equipment in connection therewith. Notwithstanding the foregoing, except upon the prior occurrence and continuance of a Default, the Lender shall not sell, assign or otherwise transfer any interest in the Note or the other Loan Documents prior to March 31, 1996. (c) In the event of any sale, assignment or other transfer described in Section 10.1(b) (other than upon the occurrence and during the continuance of a Default), the Lender will, at least five (5) Business Days prior to such proposed sale, assignment or transfer, give written notice to the Borrower of the Lender's intention to effect such transfer, setting forth the manner and circumstances thereof and the proposed transferee and certifying that the proposed transferee is an Accredited Investor and not a hedge fund or competitor of Geotek as described above, which notice shall be accompanied by an opinion of counsel reasonably satisfactory to the Borrower addressed to the Borrower to the effect that such transfer may be effected without registration under the Securities Act. No such transfer shall be permitted unless the proposed transferee agrees in writing to be bound by the transfer restrictions in this Section 10.1. (d) The Obligors authorize the Lender to disclose to any purchaser or prospective purchaser or other transferee of an interest in the Loans any financial or other information pertaining to the Loans known to the Lender and the Obligors agree to cooperate in providing such purchaser or prospective purchaser with any publicly-filed or publicly-available information about the Obligors or Holdings or their respective businesses. (e) The Obligors may not assign or otherwise transfer any of their rights or obligations under any of the Loan Documents. 33 34 10.2. Survival of Representations. All representations and warranties of the Obligors contained in any Loan Document shall survive delivery of the Note and the making of the Loans herein contemplated. 10.3. Governmental Regulation. Anything contained in any Loan Document to the contrary notwithstanding, the Lender shall not be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation. 10.4. Taxes. Any taxes (excluding income taxes) payable or ruled payable by any federal or state authority in respect of the Loan Documents shall be paid by the Obligors, together with interest and penalties, if any. 10.5. New York Law; Submission to Jurisdiction; Waiver of Jury Trial; Service of Process. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OBLIGOR AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE APPLICABLE OBLIGOR AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES TO THIS AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT TO SECTION 11.2 HEREOF. 10.6. Headings. Section headings in the Loan Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents. 10.7. Entire Agreement. The Loan Documents embody the entire agreement and understanding among the Obligors and the Lender and supersede all 34 35 prior agreements and understandings among the Obligors and the Lender relating to the subject matter thereof. 10.8. Expenses; Indemnification. The Obligors agree, jointly and severally, to reimburse the Lender for any costs, internal charges and out-of-pocket expenses (including fees, time charges and out-of-pocket expenses of outside legal counsel to the Lender) paid or incurred by the Lender in connection with the preparation, review, execution, and delivery of the Loan Documents, subject to a maximum amount required to be reimbursed by the Obligors to the Lender of $50,000. Notwithstanding the foregoing, after the occurrence and during the continuance of a Default, the Obligors agree, jointly and severally, to reimburse the Lender for any costs, internal charges and out-of-pocket expenses (including reasonable fees and time charges of outside legal counsel to the Lender) paid or incurred by the Lender in connection with the collection and enforcement of the Loan Documents. The Obligors further agree, jointly and severally, to indemnify the Lender, its directors, officers, employees and attorneys against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Lender is a party thereto) (collectively, "Costs") which any of them may pay or incur arising out of or relating to this Agreement, the other Loan Documents, the transactions contemplated hereby or the direct or indirect application or proposed application of the Loan Proceeds; provided, however, that with respect to any legal proceeding between the Lender and one or more of the Obligors, if the Obligors shall finally prevail in such proceeding (as evidenced by a final judgment not subject to further appeal), the Obligors shall not be obligated to indemnify the Lender with respect to Costs incurred in connection with such proceeding (as it relates solely to the matter or matters in dispute between the Obligors and the Lender and not any dispute between the Lender and any third party). The obligations of the Obligors under this Section shall survive the termination of this Agreement. 10.9. Accounting. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles. 10.10. Severability of Provisions. Any provision in any Loan Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable. 10.11. Confidentiality; Public Disclosures. Subject to Geotek's disclosure obligations under the Securities Act and the Exchange Act, and unless 35 36 otherwise required by law or order of a court, administrative agency or other quasi-judicial body of competent jurisdiction, and then only after providing prompt written notice of its intention to disclose, no party hereto shall issue any press release or make any public statement relating to the transactions evidenced by this Agreement or otherwise disclose this agreement to any third party without the other parties' written approval (such approval not to be unreasonably withheld), except that this Agreement may be disclosed to each party's attorneys, financial advisors and others in a confidential relationship to such party. ARTICLE XI NOTICES 11.1. Giving Notice. Any notice required or permitted to be given under this Agreement may be, and shall be deemed, given when deposited in the United States mail, postage prepaid, or by facsimile transmission when mechanical confirmation of a successful transmission has been received, or by telegraph or telex when delivered to the appropriate office for transmission, charges prepaid, addressed to the applicable Obligor or the Lender at the addresses indicated below their signatures to this Agreement. 11.2. Change of Address. The Obligors and the Lender may each change the address for service of notice upon it by a notice in writing to the other parties hereto. ARTICLE XII COUNTERPARTS This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and either of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by each of the Obligors and the Lender. 36 37 IN WITNESS WHEREOF, the Borrower, Geotek and the Lender have executed this Agreement as of the date first above written. Borrower: GEOTEK FINANCING CORPORATION By: /s/ Yaron Eitan ------------------------------------------------- Title: President Address: c/o Geotek Communications, Inc. 20 Craig Road Montvale, NJ 07645 Geotek: GEOTEK COMMUNICATIONS, INC. By: /s/ Yaron Eitan ------------------------------------------------- Title: President and Chief Executive Officer Address: 20 Craig Road Montvale, NJ 07645 Lender: HUGHES NETWORK SYSTEMS, INC. By: /s/ Jack A. Shaw ------------------------------------------------- Title: Chairman and Chief Executive Officer Address: 11717 Exploration Lane Germantown, MD 20876 37 38 ANNEX A TO LOAN AGREEMENT Adjustment of Maximum Conversion Price 39 ANNEX A TO LOAN AGREEMENT Adjustment of Maximum Conversion Price The Maximum Conversion Price, as defined in the Loan Agreement of which this Annex A forms a part (the "Loan Agreement"), and the number of shares of Common Stock of Geotek issuable upon the conversion of the Loans shall be adjusted in certain instances as provided herein. Capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan Agreement. (a) Adjustment for Change in Capital Stock. If Geotek: (1) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (2) subdivides its outstanding shares of Common Stock into a greater number of shares; (3) combines its outstanding shares of Common Stock into a smaller number of shares; (4) makes a distribution on its Common Stock in shares of its Capital Stock other than Common Stock or preferred stock; or (5) issues by reclassification of its Common Stock any shares of its Capital Stock; then the Maximum Conversion Price in effect immediately prior to such action shall be proportionately adjusted so that, upon conversion of the Loans, the Lender may receive the aggregate number and kind of shares of Capital Stock of Geotek which the Lender would have owned immediately following such action if such Loans had been converted immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment the Lender may receive upon conversion shares of two or more classes of Capital Stock of Geotek, Geotek shall determine the allocation of the adjusted Maximum Conversion Price between the classes of Capital Stock. After such allocation, the exercise privilege and the Maximum Conversion Price of each class of Capital Stock shall thereafter be subject to A-1 40 adjustment on terms comparable to those applicable to Common Stock this Annex A. Such adjustment shall be made successively whenever any event listed above shall occur. (b) Adjustment for Rights Issue. If Geotek distributes any rights, options or warrants to all holders of its Common Stock entitling them for a period expiring within 60 days after the record date mentioned below to purchase shares of Common Stock at a price per share less than the current market price per share on that record date, the Maximum Conversion Price shall be adjusted in accordance with the formula: O + N x P ----- E' = E x M ------- O + N where: E'= the adjusted Maximum Conversion Price. E = the current Maximum Conversion Price. O = the number of shares of Common Stock outstanding on the record date. N = the number of additional shares of Common Stock offered pursuant to such rights issuance. P = the offering price per share of the additional shares. M = the current market price per share of Common Stock on the record date. The adjustment shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the record date for the determination of stockholders entitled to receive the rights, options or warrants. If at the end of the period during which such rights, options or warrants are exercisable, not all rights, options or warrants shall have been exercised, the Maximum Conversion Price shall be immediately readjusted to what it would have been if "N" in the above formula had been the number of shares actually issued. A-2 41 (c) Adjustment for Other Distributions. If Geotek distributes to all holders of its Common Stock any of its assets (including but not limited to cash (other than as provided below)), debt securities, or any rights or warrants to purchase debt securities, assets or other securities of Geotek, the Maximum Conversion Price shall be adjusted in accordance with the formula: E' = E x M - F ----- M where: E'= the adjusted Maximum Conversion Price. E = the current Maximum Conversion Price. M = the current market price per share of Common Stock on the record date mentioned below. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of Common Stock. The Board of Directors of Geotek shall determine the fair market value, such determination to be evidenced by a board resolution. The adjustment shall be made successively whenever any such distribution is made and shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. This section (c) does not apply to (i) rights, options or warrants referred to in section (b) of this Annex A or (ii) cash dividends or distributions paid out of consolidated current or retained earnings. (d) Current Market Price. In sections (b) and (c) of this Annex A the current market price per share of Common Stock on any date is the average of the Quoted Prices of the Common Stock for 30 consecutive trading days commencing 45 trading days before the date in question. The "Quoted Price" of the Common Stock is the last reported sales price of the Common Stock as reported by NASDAQ, National Market System, or if the Common Stock is listed on a securities exchange, the last reported sales price of the Common Stock on such exchange which shall be for consolidated trading if applicable to such exchange, or if neither so reported or listed, the last reported bid price of the Common Stock. In the absence of one or A-3 42 more such quotations, the Board of Directors of Geotek shall determine the current market price on the basis of such quotations as it in good faith considers appropriate, such determination to be evidenced by a board resolution. (e) When De Minimis Adjustment May Be Deferred. No adjustment in the Maximum Conversion Price need be made unless the adjustment would require an increase or decrease of at least 1% in the Maximum Conversion Price. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Annex A shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. (f) When No Adjustment Required. No adjustment need be made for a transaction referred to in sections (a), (b) or (c) of this Annex A if the Lender is to participate in the transaction on a basis and with notice that the Board of Directors of Geotek determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock participate in the transaction, such determination to be evidenced by a board resolution. No adjustment need be made for rights to purchase Common Stock pursuant to a company plan for reinvestment of dividends or interest. No adjustment need be made for a change in the par value or no par value of the Common Stock. (g) Notice of Adjustment. Whenever the Maximum Conversion Price is adjusted as herein provided, Geotek shall notify the Lender in accordance with Section 11.1 of the Loan Agreement that the Maximum Conversion Price has been adjusted and set forth in such notice the adjusted Maximum Conversion Price and the facts upon which such adjustment is based. (h) Voluntary Reduction. Geotek from time to time may reduce the Maximum Conversion Price by any amount for any period of time if the period is at least 20 days and if the reduction is irrevocable during the period; provided, however, that in no event may the Maximum Conversion Price be less than the par value of a share of Common Stock. A-4 43 Whenever the Maximum Conversion Price is reduced, Geotek shall mail to the Lender a notice of the reduction. Geotek shall mail the notice at least 15 days before the date the reduced Maximum Conversion Price takes effect. The notice shall state the reduced Maximum Conversion Price and the period it will be in effect. A reduction of the Maximum Conversion Price does not change or adjust the Maximum Conversion Price otherwise in effect for purposes of sections (a), (b) and (c) of this Annex A. A-5 44 ANNEX B TO LOAN AGREEMENT Registration Rights 45 ANNEX B TO LOAN AGREEMENT Registration Rights The shares of Common Stock of Geotek issued upon conversion of the Loans as set forth in the Loan Agreement of which this Annex B forms a part (the "Loan Agreement"), shall be entitled to the registration rights provided herein with respect to the resale thereof by the Holders (as hereinafter defined). Capitalized terms not otherwise defined herein shall have the meanings given to them in the Loan Agreement. (A) Shelf Registration. (1) Geotek shall file with the Commission, by June 30, 1996, a "shelf" registration statement (a "Shelf Registration") with respect to all of the Registrable Securities on an appropriate form pursuant to Rule 415 (or any similar provision that may be adopted by the Commission) under the Securities Act, which form shall be available for the sale of the Registrable Securities to the public from time to time, and shall use its best efforts to cause the Commission to declare such Shelf Registration effective for all of the Registrable Securities on or prior to the first day of the Conversion Period. (2) Geotek shall use its best efforts to keep the Shelf Registration continuously effective and useable for resale of Registrable Securities until the third anniversary of the Maturity Date or such shorter period that will terminate when all the Registrable Securities covered by the Shelf Registration have been sold pursuant to the terms of the Shelf Registration or are otherwise no longer Registrable Securities. Geotek further agrees to use its best efforts to prevent the happening of any event that would cause the registration statement pursuant to this Section A to contain a material misstatement or omission or to be not effective and usable for resale of the Registrable Securities during the period that such Registration Statement is required to be effective and usable. (3) In the event that the registration statement (i) is not filed with the Commission on or prior to the date specified for such filing in Section A(1) hereof; (ii) has not been declared effective by the Commission pursuant to Section A(1) hereof; or (iii) following the date such registration statement is declared effective by the Commission, shall cease to be effective without being restored to effectiveness by amendment or otherwise within 30 Business Days, (each such event referred to in clauses (i) through (iii), a "Shelf Registration Default") Geotek agrees to extend the period during which it shall use its best efforts to keep the B-1 46 Shelf Registration effective, as provided in Section (A)(2) hereof, by the number of days such Shelf Registration Default continues. (B) Registration Expenses. Geotek will pay all Registration Expenses in connection with each registration of Registrable Securities. (C) Registration Procedures. (1) General Provisions. In connection with Geotek's registration obligations set forth herein, Geotek will use its best efforts to effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto Geotek will as expeditiously as possible: a. use its best efforts to keep such registration statement continuously effective and provide all requisite financial statements for the period specified in Section (A)(1) of this Annex B. Upon the occurrence of any event that would cause any such registration statement or the prospectus contained therein (A) to contain a material misstatement or omission or (B) not to be effective and usable for resale of Registrable Securities during the period required by this Annex B, Geotek shall file promptly an appropriate amendment to such registration statement or file appropriate documents that will be so incorporated by reference, (1) in the case of clause (A), correcting any such misstatement or omission, and (2) in the case of either clause (A) or (B), use its best efforts to cause such amendment to be declared effective and such registration statement and the related prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; b. prepare and file with the Commission such amendments and post-effective amendments to the registration statement as may be necessary to keep the registration statement effective for the period set forth herein; cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act and to comply fully with Rule 424, as applicable, under the Securities Act in a timely manner; and comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such registration statement or supplement to the prospectus; Geotek shall not be deemed to have used its best efforts to keep a registration statement effective during the applicable B-2 47 period if it voluntarily takes any action that would result selling Holders of the Registrable Securities covered thereby not being able to sell such Registrable Securities during that period unless such action is required or advisable under applicable law or the action is for a valid business purpose in the interest of Geotek and its effect on the registration statement is not the purpose of the action; c. advise selling Holders promptly and, if requested by such Persons, confirm such advice in writing, (1) when the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to any registration statement or any post-effective amendment thereto, when the same has become effective, (2) of any request by the Commission for amendments to the registration statement or amendments or supplements to the prospectus or for additional information relating thereto, (3) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (4) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the registration statement, the prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the registration statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the registration statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Registrable Securities under state securities or blue sky laws, Geotek shall use its best efforts to obtain the withdrawal or lifting of such order at the earliest practicable time; d. make available to each selling Holder named in any registration statement or prospectus before filing with the Commission, copies of any registration statement or any prospectus included therein or any amendments or supplements to any such registration statement or prospectus (including all documents incorporated by reference after the initial filing of such registration statement), portions of which relating to such Holders or their plan of distribution (the "Covered Provisions") will be subject to the review and comment of such Holders for a period of three Business Days, and Geotek will not file any such registration statement or prospectus or any amendment or supplement to any such registration B-3 48 statement or prospectus and will correct all of the Covered Provisions to which the selling Holders covered by such registration statement shall reasonably object within three Business Days after the receipt thereof. A selling Holder shall be deemed to have reasonably objected to such filing if such registration statement, amendment, prospectus or supplement, as applicable, as proposed to be filed, if the Covered Provision contains a material misstatement or omission or fails to comply with the applicable requirements of the Securities Act; e. promptly upon the filing of any document that is to be incorporated by reference into a registration statement or prospectus, make available copies of such document to the selling Holders, make Geotek's representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders reasonably may request; f. make available at reasonable times for inspection by the selling Holders and any attorney or accountant retained by such selling Holders, all financial and other records, pertinent corporate documents and properties of Geotek and cause Geotek's officers, directors and employees to supply all information reasonably requested by any such Holder, attorney or accountant in connection with such registration statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; provided that any person to whom information is provided under this clause f. agrees in writing to maintain the confidentiality of such information to the extent such information is not in the public domain; g. if requested by any selling Holders, promptly include in any registration statement or prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders may reasonably request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Registrable Securities, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after Geotek is notified of the matters to be included in such prospectus supplement or post-effective amendment; h. furnish to each selling Holder, without charge, at least one copy of the registration statement, as first filed with the Commission, and of each amendment thereto; B-4 49 i. deliver to each selling Holder, without charge, as many copies of the prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; Geotek hereby consents to the use of the prospectus and any amendment or supplement thereto by each of the selling Holders in connection with the offering and the sale of the Registrable Securities covered by the prospectus or any amendment or supplement thereto; j. In connection with the registration statement contemplated by this Annex B, Geotek shall: (i) furnish to each selling Holder, upon the effectiveness of the registration statement: (1) a certificate, dated the date of effectiveness of the registration statement, signed by (x) the President or any Vice President and (y) a principal financial or accounting officer of Geotek, confirming, as of the date thereof, the matters set forth in Section 3.2(ii)(a) of the Loan Agreement and such other matters as the Holders may reasonably request; (2) an opinion, dated the date of effectiveness of the registration statement, of counsel for Geotek, covering (i) due authorization and enforceability of the Loan Agreement, (ii) a statement to the effect that such counsel has participated in conferences with officers and other representatives of Geotek and representatives of the independent public accountants for Geotek and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing (relying as to materiality to a large extent upon facts provided to such counsel by officers and other representatives of Geotek and without independent check or verification), no facts came to such counsel's attention that caused such counsel to believe that the applicable registration statement, at the time such registration statement or any post-effective amendment thereto became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the prospectus contained in such registration statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in B-5 50 order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (iii) such other matters of the type customarily covered in opinions of counsel for an issuer in connection with similar securities offerings, as may reasonably be requested by such parties. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial, statistical and accounting data included in any registration statement contemplated by this Annex B or the related prospectus; and (3) a customary comfort letter, dated as of the date of effectiveness of the registration statement, from Geotek's independent accountants, in the customary form and covering matters of the type customarily covered in such comfort letters; and (ii) deliver such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clause (i) above. The above shall be done in connection with the filing of the Shelf Registration and if at any time the representations and warranties of Geotek contemplated in (i)(1) above cease to be true and correct, Geotek shall so advise the selling Holders promptly and if requested by such Persons, shall confirm such advice in writing; k. prior to any public offering of Registrable Securities, cooperate with the selling Holders and their respective counsel in connection with the registration and qualification of the Registrable Securities under the securities or blue sky laws of such jurisdictions as the selling Holders may reasonably request and use its best efforts to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdiction of the Registrable Securities covered by the applicable registration statement; provided, however, that Geotek shall not be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to service of process in suits or to taxation other than as to matters and transactions relating to the registration statement, in any jurisdiction where it is not now so subject; l. in connection with any sale of Registrable Securities that will result in such securities no longer being Transfer Restricted Securities, B-6 51 cooperate with the selling Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and to register such Registrable Securities in such denominations and such names as the Holders may request at least two Business Days prior to such sale of Registrable Securities; m. use its best efforts to cause the Registrable Securities covered by the registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities, subject to the proviso contained in clause k. above; n. if any fact or event contemplated by clause c.(4) above shall exist or have occurred, prepare a supplement or post-effective amendment to the registration statement or related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Registrable Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; o. provide a CUSIP number for all Registrable Securities not later than the effective date of a registration statement covering such Registrable Securities; p. otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to the registration statement, as soon as practicable, but in any event within sixteen months of the effectiveness of the registration statement, a consolidated earnings statement meeting the requirements of Rule 158 under the Securities Act (which need not be audited) covering a twelve-month period beginning after the effective date of the registration statement (as such term is defined in paragraph (c) of such Rule 158); and q. cause all Registrable Securities covered by the registration statement to be listed on each securities exchange on which similar securities issued by Geotek are then listed if requested by the Holders of a majority in aggregate principal amount of Registrable Securities. (2) Restrictions on Holders. Each Holder agrees by acquisition of a Registrable Security that, upon receipt of any notice from Geotek of the existence of any fact of the kind described in Section (C)(1)(c)(4) hereof, such Holder will B-7 52 forthwith discontinue disposition of Registrable Securities pursuant to the registration statement until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section (C)(1)(n) hereof, or until it is advised in writing (the "Advice") by Geotek that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the prospectus. If so directed by Geotek, each Holder will deliver to Geotek (at Geotek's expense) all copies, other than permanent file copies then in such Holder's possession, of the prospectus covering such Registrable Securities that was current at the time of receipt of such notice. In the event Geotek shall give any such notice, the time period regarding the effectiveness of such registration statement set forth in herein shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section (C)(1)(c)(4) hereof to and including the date when each selling Holder covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section (C)(1)(c)(4) hereof or shall have received the Advice. (D) Indemnification. (1) Indemnification by Geotek. Geotek agrees to indemnify and hold harmless each Holder, its officers, directors, employees and agents and each person who controls such Holder within the meaning of either Section 15 of the Securities Act or Section 20(a) of the Exchange Act (each such person being sometimes hereinafter referred to as an "Indemnified Holder") from and against all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal expenses) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any such untrue statement or omission or allegation thereof based upon information relating to such Indemnified Holder and furnished in writing to Geotek by such Indemnified Holder expressly for use therein. This indemnity will be in addition to any liability which Geotek may otherwise have. If any action or proceeding (including any governmental investigation or inquiry) shall be brought or asserted against an Indemnified Holder in respect of which indemnity may be sought from Geotek, such Indemnified Holder shall promptly notify Geotek in writing, and Geotek shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Holder and the payment of all expenses. Such Indemnified Holder shall have the B-8 53 right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Holder unless (a) Geotek has agreed to pay such fees and expenses or (b) Geotek shall have failed to assume the defense of such action or proceeding and has failed to employ counsel reasonably satisfactory to such Indemnified Holder in any such action or proceeding or (c) the named parties to any such action or proceeding (including any impleaded parties) include both such Indemnified Holder and Geotek, and there are one or more legal defenses available to such Indemnified Holder which are different from or additional to those available to Geotek (in which case, if such Indemnified Holder notifies Geotek in writing that it elects to employ separate counsel at the expense of Geotek, Geotek shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Holder, it being understood, however, that Geotek shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time for such Indemnified Holder and any other Indemnified Holders, which firm shall be designated in writing by such Indemnified Holders). Geotek shall not be liable for any settlement of any such action or proceeding effected without its written consent, but if settled with its written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, Geotek agrees to indemnify and hold harmless such Indemnified Holders from and against any loss or liability by reason of such settlement or judgment. (2) Indemnification by Holder of Registrable Securities. Each Holder agrees to indemnify and hold harmless Geotek, its directors and officers and each person, if any, who controls Geotek within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from Geotek to such Holders, but only with respect to information relating to such Holders furnished in writing by such Holders expressly for use in any registration statement or prospectus, or any amendment or supplement thereto, or any preliminary prospectus. In case any action or proceeding shall be brought against Geotek or its directors or officers or any such controlling person, in respect of which indemnity may be sought against a Holder, such Holder shall have the rights and duties given to Geotek and Geotek or its directors or officers or such controlling person shall have the rights and duties given to each Holder by the preceding paragraph. In no event shall the liability of any Holder hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. (3) Contribution. If the indemnification provided for in this Section (D) is unavailable to an indemnified party under Section (D)(1) or Section (D)(2) hereof B-9 54 (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each applicable 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, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by Geotek on the one hand and the Holders on the other hand from their sale of Registrable Securities or if such allocation is not permitted by applicable law, the relative fault of Geotek on the one hand and of the Indemnified Holder on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of Geotek on the one hand and of the Indemnified Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by Geotek or by the Indemnified Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section (D)(1), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. Geotek and each Holder agree that it would not be just and equitable if contribution pursuant to this Section (D)(3) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section (D)(3), an Indemnified Holder shall not be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by such Indemnified Holder or its affiliated Indemnified Holders and distributed to the public were offered to the public exceeds the amount of any damages which such Indemnified Holder, or its affiliated Indemnified Holder, has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (E) Specific Performance Geotek acknowledges that there would be no adequate remedy at law if it fails to perform any of its obligations under this Annex B and the Holders may be irreparably harmed by any such failure, and accordingly agrees that the Holders, in addition to any other remedy to which such Holders may be entitled at law or in B-10 55 equity, shall be entitled to compel specific performance of the obligations of Geotek under this Annex B in accordance with the terms and conditions of this Annex B, in any court of the United States or any State thereof having jurisdiction. To the extent that Geotek's obligations under this Annex B are not absolute but, rather, are subject to "best efforts" or similar provisions, the right of the Lender to compel specific performance hereunder shall be a right to compel Geotek to use such efforts as it has obligated itself to undertake hereunder. B-11 56 EXHIBIT A THIS NOTE AND THE SHARES OF COMMON STOCK OF GEOTEK COMMUNICATIONS, INC., ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED OR SOLD, UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE LOAN AGREEMENT, DATED AS OF DECEMBER 21, 1995, A COPY OF WHICH MAY BE OBTAINED FROM GEOTEK FINANCING CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICE. GUARANTEED SECURED CONVERTIBLE NOTE $24,500,000 _____________, 1996 GEOTEK FINANCING CORPORATION, a Delaware corporation (the "Borrower"), promises to pay to Hughes Network Systems, Inc. (the "Lender"), in immediately available funds, the principal sum of TWENTY-FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS ($24,500,000), or such lesser amount as may then constitute the aggregate unpaid principal amount of the Loans made to the Borrower by the Lender pursuant to the Loan Agreement (as defined below), together with interest thereon at the rates and on the dates specified in Section 2.2 of the Loan Agreement, dated as of December 21, 1995, by and among the Borrower, the Lender and Geotek Communications, Inc., as Guarantor (as the same may be amended, modified or restated from time to time, the "Loan Agreement"). Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Loan Agreement. All interest shall be computed for actual days elapsed on the basis of a 360-day year. The obligations of the Borrower under this Note have been unconditionally guaranteed by the Guarantor, as more fully provided in Article VI of the Loan Agreement. Subject to and upon compliance with the terms of the Loan Agreement, the Lender, at its option, at any time and from time to time before the Maturity Date, shall have the right to convert the outstanding principal amount of this Note into fully-paid and non-assessable shares of Common Stock of the Guarantor at the Conversion Price, in such amounts and in the manner set forth in Article IX of the Loan Agreement. The Maximum Conversion Price is subject to adjustment as provided in the Loan Agreement. The Borrower hereby authorizes the Lender to endorse on the Schedule annexed to this Note the principal amount of all Loans made by the Lender to the Borrower under 57 the Loan Agreement as well as the reductions to the aggregate principal amount of this Note related to the conversion of such principal amount to shares of Common Stock of the Guarantor; provided, that the failure to make any such notations on such Schedule shall not limit or otherwise affect the obligations of the Borrower under the Loan Agreement or this Note. The Borrower shall have no right to prepay the Loans evidenced by this Note, in whole or in part, prior to the Maturity Date. This Note is the Note issued pursuant to, and is entitled to the benefits of, the Loan Agreement, to which Loan Agreement, as it may be amended from time to time, reference is hereby made for a statement of the terms and conditions under which the Maturity Date of this Note may be accelerated. This Note is secured pursuant to the terms of the Pledge Agreement. This Note is subject to the restrictions on transfer set forth in Section 10.1 of the Loan Agreement. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. GEOTEK FINANCING CORPORATION By:_______________________________ Title: ___________________________ 2 58 SCHEDULE OF BORROWINGS AND CONVERSIONS OF PRINCIPAL TO GUARANTEED SECURED CONVERTIBLE NOTE OF GEOTEK FINANCING CORPORATION DATED ________________, 1996
Amount of Amount of Principal Date Borrowing Converted Unpaid Balance - --------------------------------------------------------------------------------
3 EX-99.III 4 AMENDMENT NO. 1 TO LOAN AGREEMENT 1 EXHIBIT III AMENDMENT NO. 1 TO LOAN AGREEMENT DATED AS OF DECEMBER 21,1995 BETWEEN GEOTEK FINANCING CORPORATION, AS BORROWER GEOTEK COMMUNICATIONS, INC., AS GUARANTOR AND HUGHES NETWORK SYSTEMS, INC., AS LENDER THIS AMENDMENT NO. 1 TO LOAN AGREEMENT (this "Amendment") is made as of the 27th day of September, 1996, by and among GEOTEK FINANCING CORPORATION, a Delaware Corporation ("Borrower"), GEOTEK COMMUNICATIONS, INC., a Delaware Corporation and the corporate parent of Borrower ("Geotek") and HUGHES NETWORK SYSTEMS, INC., a Delaware corporation (the "Lender"). BACKGROUND: A. The parties hereto entered into a Loan Agreement as of the 21st day of December, 1995 (the "Loan Agreement") and, simultaneous with the execution of this Amendment, are entering into a Vendor Credit Financing Agreement (the "Credit Agreement"). B. As an inducement to the parties hereto to enter into the Credit Agreement and the other Facility Documents (as defined in the Credit Agreement), the parties have agreed to amend certain provisions of the Loan Agreement as set forth herein. AGREEMENT: 1. Definitions. (a) As used herein. the following terms shall have the following meanings and such definitions shall be added in the appropriate place in Article I of the Loan Agreement: "CONVERSION SHARES" means shares of Common Stock issued upon conversion of the Note and upon exercise of the Warrants. "CREDIT AGREEMENT" means that certain Vendor Credit Financing Agreement dated as of September 27, 1996 by and among Borrower. Geotek and Lender. "MAXIMUM SALES AMOUNT" means the greater of (i) a number of shares of Common Stock, with an aggregate market value (based on the Quoted Price of Geotek's Common Stock on the Trading Day immediately preceding the sale or transfer for which the determination is being made) equal to $500,000 and (ii) such number of shares which is equal to 5% of the average daily trading volume of Geotek's Common Stock on the primary interdealer quotation system or national 2 securities exchange on which the Common Stock is traded for the thirty (30) Trading Day period immediately preceding the date of the sale or transfer. "QUOTED PRICE" means the last reported sales price of the Common Stock on any national securities exchange on which the Common Stock is listed which shall be for consolidated trading if applicable to such exchange, or if not so listed, the last reported bid price of the Common Stock. "WARRANTS" means the warrants issued by Geotek to the Lender in connection with the Credit Agreement, as such Warrants may be amended or otherwise modified from time to time. The definition of Permitted Liens contained in the Loan Agreement shall be deleted and replaced with the definition of Permitted Liens contained in the Credit Agreement and the definition of "Pledge Agreement" shall be amended and restated in its entirety to read as follows: "Pledge Agreement" means the Amended and Restated Borrower Pledge Agreement between the Borrower and Lender, dated as of September 27, 1996, substantially in the form attached as Exhibit B to the Credit Agreement. All other capitalized terms used herein and not otherwise defined, shall have the respective meanings set forth in the Loan Agreement. (b) The Funding Cutoff Date shall be amended to mean October 4, 1996. 2. Section 9.1(a) of the Loan Agreement is amended and restated in its entirety to read as follows: (a) Subject to and upon compliance with the provisions of this Article IX, at the option of the Lender, the outstanding principal amount of the Loans may be converted into fully paid and nonassessable shares (calculated as to each conversion to the nearest 1/100 of a share) of Common Stock of Geotek, at the Conversion Price, determined as hereinafter provided, in effect at the time of conversion. Such conversion right shall commence immediately on the Initial Funding Date and shall expire on the Maturity Date (the "Conversion Period"). 3. Sections 9.2(a)-(c) of the Loan Agreement are amended and restated in their entirety to read as follows: (a) (i) At all times prior to October 1, 1996, Lender and its Affiliates may only convert the Loans to the extent that the Conversion Shares issuable upon such conversion does not exceed 10,000 shares of Common Stock per Trading Day. (ii) During the portion of the Conversion Period occurring on or -2- 3 after October 1, 1996, Lender and its Affiliates may only convert up to $500,000 of the Loans into Conversion Shares on any Trading Day; provided, however, that the Lender and its Affiliates may convert the entire remaining principal balance of the Loans into Conversion Shares on the Trading Day next preceding the Maturity Date. (b) Notwithstanding the provisions of paragraph (a) above, on any Trading Day during the Conversion Period, the Lender and its Affiliates may convert the entire remaining balance of the Loans into Conversion Shares at the Maximum Conversion Price thereunder; provided that, the Lender and its Affiliates thereafter comply with Section (c) hereof. (c) Notwithstanding the provisions of paragraph (a) and (b) hereof, so long as Lender or any of its Affiliates owns any Conversion Shares neither Lender nor any of its Affiliates shall sell or otherwise transfer (other than sales or transfers between Lender and one or more of its Affiliates or between Lender's Affiliates) (i) greater than 10,000 Conversion Shares on any Trading Day occurring prior to October 1, 1996 or (ii) on any Trading Day occurring on or after October 1, 1996, greater than such number of Conversion Shares as is equal to the Maximum Sales Amount. All sales and transfers by Lender and its Affiliates on a Trading Day shall be aggregated for the purpose of determining whether the Lender and its Affiliates have complied with this Section. 4. Section 9.2(d) of the Loan Agreement is amended by replacing "$300,000" with "the Maximum Sales Amount". 5. Section 2.4(a) of the Loan Agreement is amended and restated in its entirety to read as follows: (a) If the proceeds of a Loan are to be used concurrently with the making of such Loan to purchase any Auction 900 MHz Licenses or are to be used to reimburse the Borrower for the prior purchase of any Auction 900 MHz Licenses, then not later than 12:00 noon (New York time) on the applicable Funding Date, the Lender shall make available the applicable Loan Amount in funds immediately available by wire-transferring such funds to the Borrower, which in the case of Loans the proceeds of which are to be used concurrently with purchase of any Auction 900 MHz Licenses, shall promptly remit such funds to the FCC (or to Holdings for prompt remittance to the FCC). and the definition of Auction 900 MHz Licenses is amended to mean any 900 MHz Licenses purchased or to be purchased by Holdings from the FCC with the proceeds of the Loans (whether -3- 4 such proceeds are provided to Borrower before or after the purchase). 6. Section 3.2(i)(c) of the Loan Agreement is amended by adding at the end thereof: "or (3) such Auction 900 MHz Licenses are then held by Holdings (including copies of all such 900MHz Licenses)." 7. The penultimate sentence of Section 5.4 of the Loan Agreement is amended by adding at the end thereof: "and other than transactions contemplated by Section 5.13(b) of the Loan Agreement and Section 5.3 of the Credit Agreement." 8. Section 5.11 of the Loan Agreement is amended and restated in its entirety as follows: Indebtedness. The Borrower will not, nor will it permit any of its Subsidiaries to incur any Indebtedness other than (a) the Loans, (b) Advances under the Credit Agreement, (c) the Holdings Note (in the case of Holdings) and (d) the Guarantees by the Borrower and Holdings required to be provided under the Indenture as in effect on the date hereof. 9. Section 5.18 of the Loan Agreement is amended by adding at the end thereof: "or pursuant to Section 5.17 of the Credit Agreement." 10. Section 5.20 of the Loan Agreement is amended by adding at the end thereof: "other than Letters of Credit for the benefit of Hughes Network Systems, Inc." 11. Section 5.21 of the Loan Agreement is amended by adding at the end thereof: "or in the Credit Agreement." 12. Section 5.26 of the Loan Agreement is amended and restated in its entirety as follows: Ownership of Acquired 900 MHz Licenses. All Acquired 900 MHz Licenses shall be issued in the name of, or transferred to, Holdings and not transferred by Holdings to any other Person (except as contemplated by Section 5.13 hereof). 13. The last sentence of Section 10.1(b) of the Loan Agreement is amended and restated in its entirety to read as follows: Notwithstanding the foregoing, except upon the prior occurrence and continuance of a Default, the Lender shall not sell, assign or otherwise transfer any interest in the Note or the other Loan Documents prior to September 30, 1997, provided, however, that nothing contained in this Section 10.1(b) shall prevent Lender from converting the Note or selling Conversion Shares prior to September -4- 5 30, 1997 or thereafter as provided by and subject to the limitations contained in Article IX. 14. Borrower agrees, no later than the day of execution of the Credit Agreement, to deliver to Lender a notice which complies with the requirements set forth in Section 3.2(i) (which notice shall be irrevocable) of the Loan Agreement with respect to a Loan Amount equal to $24,500,000 and to otherwise satisfy (unless waived by Lender) the conditions precedent set forth in Article III of the Loan Agreement. 15. Except as expressly supplemented and/or modified herein, the terms of the Loan Agreement shall continue in full force and effect. [SIGNATURE PAGE FOLLOWS] -5- 6 IN WITNESS WHEREOF, the Borrower, Geotek and Lender have executed this Amendment as of this 27 day of September, 1996. Borrower: GEOTEK FINANCING CORPORATION By: /s/ MICHAEL MCCOY ------------------------------------ Name: Michael McCoy Title: Chief Financial Officer Geotek: GEOTEK COMMUNICATIONS, INC. By: /s/ MICHAEL MCCOY ------------------------------------ Name: Michael McCoy Title: Chief Financial Officer Lender: HUGHES NETWORK SYSTEMS, INC. By: /s/ PRADEEP KAUL ------------------------------------ Name: Pradeep Kaul Title: Executive Vice President -6- EX-99.IV 5 VENDOR CREDIT FINANCING AGREEMENT 1 EXHIBIT IV [EXECUTION COPY] VENDOR CREDIT FINANCING AGREEMENT dated as of September 27, 1996 between GEOTEK FINANCING CORPORATION, AS BORROWER, GEOTEK COMMUNICATIONS, INC., AS GUARANTOR, and HUGHES NETWORK SYSTEMS, INC., AS LENDER 2 TABLE OF CONTENTS -----------------
PAGE ---- ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE II THE ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.1. The Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.2. Procedure for Making Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 2.3. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2.4. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2.5. Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2.6. Interest on Overdue Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2.7. Interest Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 2.8. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 2.9. Schedules to Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 2.10. Optional Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 2.11. Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 ARTICLE III CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.1. Conditions to Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 3.2. Conditions to Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 3.3. Changes and Cancellations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.1. Corporate Existence and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 4.2. Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.3. Compliance with Laws and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.4. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.5. Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 4.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.8. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.9. Accuracy and Completeness of Information . . . . . . . . . . . . . . . . . . . . . . . 23 4.10. Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.11. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 4.12. Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 4.13. Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 5.1. Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 5.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.3. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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Page ---- 5.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.6. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.7. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 5.8. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.9. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.10. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.11. Corporate Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.12. Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 5.13. Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 5.14. Investments and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 5.15. Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 5.16. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 5.17. Asset Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 5.18. Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.19. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.20. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.21. Preservation of Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.22. Ownership of Borrower and Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.23. Compliance with other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.24. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 5.25. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 ARTICLE VI GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 6.1. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 6.2. Guaranty Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 6.3. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances . . . . . 31 6.4. Waivers by the Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 6.5. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 6.6. Stay of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 ARTICLE VII DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 ARTICLE VIII ACCELERATION, REMEDIES, WAIVERS AND AMENDMENTS . . . . . . . . . . . . . . . . . . . . 35 8.1. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 8.2. Preservation of Rights; Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 35 ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 9.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 9.2. Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 9.3. Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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Page ---- 9.4. New York Law; Submission to Jurisdiction; Waiver of Jury Trial; Service of Process . . 38 9.5. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.6. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.7. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.8. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.9. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 9.10. Confidentiality; Public Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . 40 9.11. Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 9.12. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 9.13. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 ARTICLE X NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 10.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 10.2. Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 ARTICLE XI COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
iii 5 VENDOR CREDIT FINANCING AGREEMENT THIS VENDOR CREDIT FINANCING AGREEMENT (this "Agreement") is made as of the 27th day of September 1996, by and among GEOTEK FINANCING CORPORATION, a Delaware corporation (the "Borrower"), GEOTEK COMMUNICATIONS, INC., a Delaware corporation and the corporate parent of the Borrower ("Geotek" or the "Guarantor") and HUGHES NETWORK SYSTEMS, INC., a Delaware corporation ("HNS" and, together with its successors and assigns, referred to collectively as the "Lenders"). WHEREAS, the Borrower, HNS and the Guarantor have entered into a Manufacturing Agreement of even date herewith (the "Manufacturing Agreement") pursuant to which, among other things, HNS will manufacture and sell to the Borrower certain FHMA base station equipment more fully described in Exhibit C to the Manufacturing Agreement and any other base station equipment manufactured by HNS pursuant to the Manufacturing Agreement (whether operating in the 900 MHz range or otherwise) (collectively, "Base Station Equipment"); WHEREAS, the Borrower and Geotek desire that the Lenders provide certain financing for the purchase by the Borrower from HNS of Base Station Equipment; and WHEREAS, the Lenders are willing to provide certain financing to the Borrower for the purchase of Base Station Equipment on the terms and conditions set forth herein. NOW THEREFORE, the Borrower, Geotek and the Lenders hereby agree as follows: ARTICLE I DEFINITIONS As used in this Agreement: "Advance Cutoff Date" means June 30, 1999. "Advance Date" means the Initial Advance Date and each Subsequent Advance Date. "Advance Period" means the period from and including the Initial Advance Date through and including the Advance Cutoff Date. "Advances" means the extensions of credit for the account of the Borrower made by the Lenders pursuant to Article II and "Advance" means any one of them. 6 "Affiliate" of a Person means any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more (50% or more for purposes of Section 9.1(b) only) of any class of voting securities of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise. "Agreement Accounting Principles" means GAAP in effect at the time of the preparation of the financial statements referred to in Section 4.4, applied in a manner consistent with that used in preparing such statements. "Article" means an article of this Agreement unless another document is specifically referenced. "Base Station Equipment" has the meaning given in the recitals hereof. "Base Station Equipment Invoice" has the meaning given in Section 2.2. "Base Station Equipment Purchase Order" has the meaning given in Section 3.2. "Business Day" means a day on which banks are open for business in New York, New York and Baltimore, Maryland. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated) of such Person's capital stock, and any rights (other than debt securities convertible into capital stock), warrants or options exchangeable for or convertible into such capital stock. "Capitalized Lease" of a Person means any lease of property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles. "Capitalized Lease Obligations" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person, prepared in accordance with Agreement Accounting Principles. "Change of Control" has the meaning given in the 1995 Indenture as in effect on the date hereof. "Change of Control Date" has the meaning given in Section 2.5(b). "Change of Control Offer" has the meaning given in Section 2.5(b). "Change of Control Repayment Date" has the meaning given in Section 2.5(b). 2 7 "Collateral" means any and all assets and rights and interests in or to property of the Borrower pledged from time to time as security for the Obligations, whether pursuant to the Security Agreement, the Pledge Agreement, any other Collateral Document or otherwise. "Collateral Agent" means HNS, in its capacity as collateral agent for the Lenders, and any successor to HNS. "Collateral Documents" means the Pledge Agreement, the Security Agreement and any other document or instrument granting or purporting to grant a Lien on any property of the Borrower (or others) as security for the Obligations. "Commitment" of any Lender means the maximum face amount set forth on the Note issued to such Lender hereunder. "Common Stock" means, with respect to any person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of, such person's common stock, whether outstanding on the date hereof or issued after the date hereof, and includes, without limitation, all series and classes of such common stock, in each case to the extent that such series or class of common stock does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "Consolidated Entity" means Geotek and each of its Subsidiaries which would be consolidated with Geotek for purposes of financial reporting. "Controlled Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Geotek or any Subsidiary, are treated as a single employer under Section 414(b) or 414(c) of the Internal Revenue Code of 1986, as amended from time to time. "Costs" has the meaning given in Section 9.7. "Default" means an event described in Article VII. "Disclosure Letter" means the letter delivered by the Obligors to the Lenders pursuant to Article IV hereof, which letter describes, on a Section-by-Section basis, any exceptions to the representations and warranties set forth in such Article, and which letter is expressly made a part hereof as if contained herein. "Dollars" or "$" means lawful currency of the United States of America. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. 3 8 "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. "Excess Interest" has the meaning given in Section 2.7. "Facility Documents" means the Financing Documents, the Warrants, the Manufacturing Agreement, the Sales Representation Agreement and the Registration Rights Agreement. "Federal Bankruptcy Code" means Title 11, United States Code, as amended from time to time. "FCC" means the United States Federal Communications Commission or any other regulatory body which succeeds to the functions of the Federal Communications Commission. "FCC License" means any license, permit or authorization issued by the FCC. "Financing Documents" means this Agreement, the Notes, the Pledge Agreement, the Security Agreement and the other Collateral Documents (if any). "GAAP" means generally accepted accounting principles. "Guaranteed Obligations" has the meaning given in Section 6.1. "Guaranty" of a Person means any agreement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement or take-or-pay contract and shall include, without limitation, the contingent liability of such Person in connection with any application for a Letter of Credit. When used as a verb, the words "guaranty" and "guarantee" shall have correlative meanings. "Holdings" means Geotek License Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Borrower. "Holdings Note" has the meaning given in the Loan Agreement. "Hughes Subsidiary" means any corporation more than 50% of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly through one or more intermediaries, by Hughes Electronics Corporation. "Indebtedness" of a Person means such Person's (i) obligations for borrowed money, (ii) obligations representing the deferred purchase price of property (other than 4 9 accounts payable arising in the ordinary course of such Person's business on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens on property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances or other similar instruments (including interest rate protection and other derivative agreements), (v) Capitalized Lease Obligations and (vi) obligations for which such Person is obligated pursuant to a Guaranty. "Indemnified Parties" has the meaning given in Section 9.7. "Initial Advance" means the Advance to be made to the Borrower on the Initial Advance Date. "Initial Advance Date" means the Business Day on which the Lenders make the first Advance to the Borrower hereunder, which date shall not be prior to the date of first delivery of Base Station Equipment from HNS to the Borrower pursuant to the Manufacturing Agreement. "Initial Order Date" means the date on which the Borrower submits to HNS its first Base Station Equipment Purchase Order pursuant to the Manufacturing Agreement for the manufacture and delivery of Base Station Equipment to be financed with an Advance pursuant to this Agreement. "Interest Payment Date" means June 15 and December 15 of each year until the Maturity Date. "Investment" of a Person means any loan, advance, extension of credit (excluding accounts receivable arising in the ordinary course of business), deposit account (other than deposit accounts used for the payment of obligations in the ordinary course of business otherwise permitted hereunder) or contribution of capital by such Person to any other Person or any investment in, or purchase or other acquisition of, the stock, notes, debentures or other securities of any other Person made by such Person, excluding trade credit in the ordinary course of business and investments paid for solely in nonredeemable Capital Stock of such Person. "Landlord Waiver Location" has the meaning given in Section 3.2(iii)(c). "Letter of Credit" of a Person means a letter of credit or similar instrument which is issued upon the application of such Person, upon which such Person is an account party or for which such Person is in any way liable. "Lien" of a Person means any security interest, mortgage, pledge, hypothecation, assignment, lien (statutory or other), claim, charge, encumbrance, title retention agreement, lessor's interest under a Capitalized Lease or analogous instrument, in, of or on any property of such Person. 5 10 "Loan Agreement" means the Loan Agreement, dated as of December 21, 1995, among HNS, the Borrower and Geotek, as such agreement may be amended or otherwise modified from time to time. "Loss" has the meaning given in Section 9.11. "Majority Lenders" means, at any time, those Lenders owed or holding more than fifty percent (50%) of the aggregate outstanding principal amount of the Notes. "Manufacturing Agreement" has the meaning given in the recitals hereof. "Material Adverse Effect" means (a) a material adverse effect upon the business, operations, properties, assets, condition (financial or otherwise) or prospects of either of the Obligors and their respective Subsidiaries, taken as a whole or (b) the impairment in any material respect of the ability of any of the Obligors to perform their respective obligations under any Financing Document or of the Collateral Agent or the Lenders to enforce or collect any of the Obligations. "Maturity Date" means December 1, 2003. "Maximum Advance Amount" means $100,000,000 (which shall include any and all interest added to principal pursuant to Section 2.3). "Maximum Rate" has the meaning given in Section 2.7. "Multiemployer Plan" means a Plan that is a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA to Geotek or any member of the Controlled Group is obligated to make contributions. "900 MHz Licenses" means FCC Licenses to construct and operate 900 MHz Specialized Mobile Radio Systems. "1995 Indenture" means that certain Indenture, dated as of June 30, 1995, between Geotek, as Issuer, and IBJ Schroder Bank & Trust Company, as Trustee, relating to Geotek's 15% Senior Secured Discount Notes due 2005. "1996 Indenture" means that certain Indenture, dated as of March 5, 1996, between Geotek, as Issuer, and The Bank of New York, as Trustee, relating to Geotek's 12% Senior Subordinated Convertible Notes due 2001. "Nonconforming Base Station Equipment" has the meaning given in Section 3.3. "Note" means any promissory note in substantially the form of Exhibit A hereto, duly executed and delivered to any Lender by the Borrower evidencing the aggregate Indebtedness of the Borrower to such Lender resulting from the Advances made by such 6 11 Lender or acquired by such Lender pursuant to Section 9.1 hereof, as the same may be amended or otherwise modified or replaced from time to time, and "Notes" means all of them. "Obligations" means all unpaid principal of and accrued and unpaid interest on the Notes, all accrued and unpaid fees and expenses and all other obligations (monetary and other) of the Obligors to the Lenders and the Collateral Agent arising under the Financing Documents. "Obligors" means, collectively, the Borrower and Geotek, and their respective successors and assigns, and "Obligor" means either of the foregoing. "Order Date" means each date on which the Borrower submits to HNS a Base Station Equipment Purchase Order pursuant to the Manufacturing Agreement for the manufacture and delivery of Base Station Equipment to be financed with an Advance or Advances pursuant to this Agreement. "PBGC" means the Pension Benefit Guaranty Corporation and its successors and assigns. "Perfection Costs" has the meaning given in Section 9.7. "Permitted Liens" means the following types of Liens: (a) Liens for taxes, assessments or governmental charges or claims either (i) not delinquent or (ii) being contested in good faith by appropriate proceedings and as to which the Borrower or any of its Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP; (b) judgment Liens not giving rise to a Default if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; (c) statutory Liens of landlords and other Liens imposed by law and Liens of carriers, warehousemen, mechanics, suppliers, materialmen and repairmen incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof; (d) Liens in favor of customs and revenue authorities which arise as a matter of law to secure payment of customs duties in connection with the importation of Base Station Equipment (or components thereof), which payments either are not yet delinquent or are being contested in good faith, if a reserve or other appropriate 7 12 provision, if any, as shall be required by GAAP shall have been made in respect thereof; and (e) Liens created under the Security Agreement, the Pledge Agreement and any other Collateral Document. "Person" means any corporation, natural person, firm, joint venture, partnership, trust, unincorporated organization, enterprise, limited liability company or other entity, government or any department or agency of any government. "Plan" means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Internal Revenue Code as to which Geotek or any Subsidiary may have any liability. "Pledge Agreement" means an Amended and Restated Pledge Agreement, dated as of the date hereof, between the Borrower and the Collateral Agent, in substantially the form attached hereto as Exhibit B, as such agreement may be amended or otherwise modified from time to time. "PST means PowerSpectrum Technology Ltd. "Prepayment Moratorium Period" has the meaning given in Section 9.1(c). "Prepayment Notice Period" has the meaning given in Section 9.1(c). "Proportionate Share" means, with respect to any Lender, a fraction (expressed as a percentage), the numerator of which shall be the amount of such Lender's Commitment and the denominator of which shall be the Maximum Advance Amount. "Reacquired Base Station Equipment" has the meaning given in Section 5.12(c). "Registration Rights Agreement" means the Registration Rights Agreement, dated as of the date hereof, among the Borrower, the Guarantor and HNS, in substantially the form attached hereto as Exhibit F, as such agreement may be amended or otherwise modified from time to time. "Rentals" of a Person means the aggregate amounts payable by such Person under any lease of real or personal property having an original term (including any required renewals or any renewals at the option of the lessor or lessee) of one year or more but does not include any amounts payable under Capitalized Leases of such Person. "Repayment Amount" has the meaning given in Section 2.5(b). "Replacement Communications Equipment" has the meaning given in Section 5.12(c). 8 13 "Reportable Event" means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such Section, with respect to a Plan, excluding, however, such events as to which the PBGC by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event, provided that a failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code and of Section 302 of ERISA shall be a reportable event regardless of the issuance of any waiver in accordance with Section 412(d) of the Internal Revenue Code. "Sales Representation Agreement" means the Sales Representation Agreement of even date herewith between Geotek and HNS. "S-C Rig Loan Agreement" means that certain Senior Loan Agreement, dated April 4, 1996, between Geotek, as borrower, and S-C Rig Investments-III, L.P., as lender. "SEC" means the United States Securities and Exchange Commission or any other regulatory body which succeeds to the functions of the Securities and Exchange Commission. "Section" means a numbered section of this Agreement, unless another document is specifically referenced. "Securities Act" means the Securities Act of 1933, as amended from time to time. "Security Agreement" means a Security Agreement, dated as of the date hereof, between the Borrower and the Collateral Agent, in substantially the form attached hereto as Exhibit C, as such agreement may be amended or otherwise modified from time to time. "Single Employer Plan" means a Plan maintained by Geotek or any member of the Controlled Group for employees of Geotek or any member of the Controlled Group. "Subsequent Advance Date" means any date on which any Lender makes an Advance to the Borrower hereunder, other than the Initial Advance Date. "Subsidiary" means any corporation more than 50% of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by Geotek or by one or more Subsidiaries or by Geotek and one or more Subsidiaries, or any similar business organization which is so owned or controlled. "Unfunded Liabilities" means, on any date of determination, (a) in the case of Single Employer Plans, all "unfunded benefit liabilities" as defined in Section 4001(a)(18) of ERISA, and (b) in the case of Multiemployer Plans, the liability of Geotek and its Subsidiaries if they were to incur a complete or partial withdrawal from any Multiemployer Plan. 9 14 "Unmatured Default" means an event which, but for the lapse of time or the giving of notice, or both, would constitute a Default. "Warrants" means the Warrants issued by Geotek to HNS in connection herewith for the purchase of the Common Stock of Geotek, in substantially the forms attached hereto as Exhibit D, as amended or otherwise modified from time to time. "Wholly-Owned Subsidiary" means any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by Geotek or one or more Wholly-Owned Subsidiaries, or by Geotek and one or more Wholly-Owned Subsidiaries, or any similar business organization which is so owned or controlled. The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. ARTICLE II THE ADVANCES 2.1. The Advances. Subject to the terms and conditions set forth herein, commencing on the Initial Advance Date, each Lender severally agrees to make Advances to the Borrower from time to time on any Business Day during the Advance Period in an aggregate principal amount not to exceed its Proportionate Share. The Advances shall be evidenced by the Notes and secured by the Collateral. 2.2. Procedure for Making Advances. (a) Subject to Article III, and except as provided in Section 2.2(b), each Advance shall be deemed to have been made to the Borrower on the date on which HNS issues to the Borrower (with a copy to the Lenders) an invoice (the "Base Station Equipment Invoice") for Base Station Equipment which has been delivered to the Borrower pursuant to the Manufacturing Agreement and shall be deemed to be in an amount equal to the lesser of such Lender's Proportionate Share of (i) the "Balance Due" on such invoice and (ii) ninety percent (90%) of the total purchase price of the Base Station Equipment covered by such Base Station Equipment Invoice, in each case exclusive of all sales, use or similar taxes, broker's fees and shipping charges, if any. The amount of any Advance hereunder with respect to any Base Station Equipment Invoice issued by HNS to the Borrower shall be binding on the Borrower unless the Borrower disputes in writing the amount of such invoice within 10 Business Days of receipt thereof; provided that the Lenders' obligation to make any additional Advances hereunder shall be suspended during the pendency of any dispute regarding the amount of any Advance hereunder with respect to any Base Station Equipment Invoice. The immediately preceding sentence is intended to ensure that the amount of any Advances made hereunder are not subject to dispute and nothing herein shall preclude the Borrower from making any claims against HNS under the Manufacturing Agreement with respect to any invoice or any Base Station Equipment covered thereby. 10 15 (b) Notwithstanding the foregoing, if on the Advance Cutoff Date any Base Station Equipment ordered pursuant to the Manufacturing Agreement and originally scheduled for delivery on or before the Advance Cutoff Date has not yet been delivered to the Borrower (and no Advance for the purchase price therefor has been made hereunder), the Lenders may (or shall, at the request of the Borrower), subject to the dollar and percentage limitations in Sections 2.1 and 2.2(a), make Advances on the Advance Cutoff Date with respect to all or part of such Base Station Equipment as if such Base Station Equipment had been delivered to the Borrower (and a Base Station Equipment Invoice had been issued therefore) on the Advance Cutoff Date. The making of Advances by the Lenders under this Section 2.2(b) shall not be deemed to be a waiver by the Lenders of the conditions precedent to such Advances set forth in Section 3.2, which conditions must be satisfied by the Borrower as if such Advance were to be made on the delivery date set forth in the applicable Base Station Equipment Purchase Order or HNS may refuse to deliver the Base Station Equipment with respect to which such Advances were made until all such conditions precedent are satisfied. In the event such conditions are not satisfied on the delivery date for such Base Station Equipment, the Borrower may purchase any such Base Station Equipment to which such failed conditions relate by prepaying all or such portion of the Advances (together with accrued interest thereon) as are attributable to such Base Station Equipment, and as soon as practicable after such prepayment, HNS shall deliver to the Borrower all of the Base Station Equipment it so refused to deliver under this Section 2.2(b). (c) Immediately upon its making, HNS shall credit the amount of any Advance against the amounts due under the applicable Base Station Equipment Invoice, with the Borrower responsible for any remaining balance. There shall be no cash disbursements of any Advances made pursuant to this Agreement. (d) Each Advance is subject to the fulfillment of the conditions precedent set forth in Article III. Notwithstanding the immediately preceding sentence (and except as provided in Section 2.2(b)), (i) each Lender may (but is not obligated to), in the exercise of its sole discretion, make an Advance despite the failure of the Borrower to fulfill all such conditions precedent or (ii) with respect to the Borrower's failure to fulfill only the condition precedent set forth in Section 3.2(vi), upon the request of the Borrower each Lender shall make the applicable Advance despite the failure of the Borrower to fulfill such condition precedent; provided that, in each case, HNS shall retain possession of the Base Station Equipment to which such Advance relates until such time as the Collateral Agent is satisfied that the Borrower has fulfilled all such conditions precedent with respect to such Advance (other than by virtue of HNS's possession of such Base Station Equipment). In the event the Lenders so make an Advance pursuant to clause (ii) hereof and the Borrower has not been able to satisfy the conditions precedent to such Advance for a period of ten (10) days after the date of such Advance, the Borrower may, no later than June 30, 1999, purchase all of the Base Station Equipment to which such failed conditions relate by prepaying all or such portion of the Advances (together with accrued interest thereon) as are attributable to such Base Station Equipment, and as soon as practicable after such prepayment, HNS shall deliver to the Borrower all of the Base Station Equipment being so purchased. Any warehousing or other related costs, as well as the risk of loss, with respect to such Base Station Equipment retained by HNS shall be borne by the Borrower and the 11 16 Borrower shall indemnify HNS and the Lenders from and against any other loss, cost or expense resulting therefrom. (e) For the avoidance of doubt, unless otherwise agreed in writing by the Lenders and the Borrower, no amounts other than the actual purchase price of Base Station Equipment (as set forth in Exhibit E to the Manufacturing Agreement), as adjusted from time to time pursuant to the Manufacturing Agreement, will be financed by the Lenders hereunder (subject at all times to the terms and conditions of this Agreement). 2.3. Interest. (a) Interest shall accrue on the unpaid principal amount of each Advance at a fixed rate per annum equal to eleven percent (11%) from the date of such Advance until the Maturity Date, and, subject to Section 2.3(b), shall be payable in cash semi- annually in arrears on (a) each Interest Payment Date occurring after the Initial Advance Date, and (b) on the Maturity Date (or such earlier date as the aggregate outstanding principal amount of the Advances is repaid in full pursuant to this Agreement). All interest shall be computed for actual days elapsed on the basis of a year consisting of 365 days (or 366 days, as appropriate). In computing interest on any Advance, the Advance Date of such Advance shall be included and the date of payment shall be excluded so long as such payment is received by the applicable Lender at or before 12:00 p.m. (New York time) on the date when due. (b) Notwithstanding the provisions of Section 2.3(a), so long as no Default has occurred and is continuing, interest payable on any Advance on any Interest Payment Date prior to June 30, 1999, shall not be payable in cash on such Interest Payment Date and shall, on such Interest Payment Date, be added to the outstanding principal balance of the Advances and shall be payable as principal pursuant to Section 2.5. 2.4. [Intentionally Omitted]. 2.5. Repayment. (a) Except as set forth in subsection (b) hereof or in Sections 2.2(b), 2.2(d), 5.12 or 9.11, the Borrower shall repay the aggregate principal amount of the Advances in ten equal installments, with the first two installments being due on July 10, 1999, and December 15, 1999, respectively, and the remaining installments being due on the expiration of each six (6) month period after December 15, 1999 (i.e., June 15, 2000, December 15, 2000, etc.). Once repaid, any amount of principal repaid may not be reborrowed. (b) (i) Upon the occurrence of a Change of Control (the date of such occurrence, the "Change of Control Date"), the Borrower will notify the Lenders in writing of such occurrence and shall make an offer to repay (the "Change of Control Offer"), and shall repay, on a Business Day (the "Change of Control Repayment Date") not more than 60 days following the Change of Control Date (and in no event later than the date on which any other Indebtedness of Geotek or its Subsidiaries is repaid as a result of such Change of Control) up to the entire principal amount of all Notes then outstanding, plus accrued and unpaid interest (and all other Obligations due hereunder and under the other Financing Documents), if any, to the Change of Control Repayment Date. 12 17 (ii) Notice of a Change of Control Offer shall be mailed by the Borrower not later than the 30th day after the Change of Control Date to the Lenders at their addresses for notices provided herein, with a copy to the Collateral Agent. The Change of Control Offer shall remain open from the time of mailing for at least 20 Business Days and until 5;00 p.m., New York City time, on the Change of Control Repayment Date. The notice, which shall govern the terms of the Change of Control Offer, shall state: (1) that the Change of Control Offer is being made pursuant to this Section 2.5(b) and that all Notes validly tendered into the Change of Control Offer and not withdrawn will be accepted for payment; (2) the Change of Control Repayment Date and the date on which the Change of Control Offer expires; (3) that any Note (or portion thereof) not repaid will continue to accrue interest in accordance with the terms thereof; (4) that, unless the Borrower shall default in the payment of the Repayment Amount, any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Repayment Date; (5) that Lenders electing to have Notes (or any portion thereof) repaid must notify the Borrower no later than 5:00 p.m., New York City time, on the fifth Business Day immediately preceding the Change of Control Repayment Date of the principal amount of their respective Notes to be repaid, as well as the amount of accrued but unpaid interest (and other Obligations) allocable thereto. (6) that Lenders electing to have Notes repaid pursuant to a Change of Control Offer will be required to return their Notes to the Borrower on the second Business Day immediately following the date on which such Lender receives full payment for its Note (including accrued and unpaid interest) and its Proportionate Share of all other Obligations due hereunder and under the other Financing Documents (collectively, the "Repayment Amount") in immediately available funds; (7) that Lenders will be entitled to withdraw their election if the Borrower receives, not later than 5:00 p.m., New York City time, on the third Business Day immediately preceding the Change of Control Repayment Date, a telex, facsimile transmission or letter setting forth the name of the Lender and a statement that such Lender is withdrawing its election to have its Note repaid to the extent set forth in such letter; and (8) information concerning the business of Geotek, the most recent annual and quarterly reports of Geotek filed with the SEC pursuant to the 13 18 Exchange Act (or, if the Company is not then permitted to file any such reports with the SEC, the comparable reports prepared pursuant to Section 4.07 of the 1995 Indenture), a description of material developments in Geotek's business, information with respect to pro forma historical financial information after giving effect to such Change of Control and such other information concerning the circumstances and relevant facts regarding such Change of Control Offer as would be material to a Lender in connection with the decision of such Lender as to whether or not it should accept the Change of Control Offer. (iii) On the Change of Control Repayment Date, the Company shall repay to each Lender electing such repayment such Lender's Repayment Amount in immediately available funds to the account specified for payments to such Lender as provided herein. 2.6. Interest on Overdue Amounts. In the event that any principal amount of any Advance or any interest, fees or other amounts payable hereunder is not paid when due as provided herein (after accounting for any applicable grace periods), the Borrower shall pay late payment interest on such unpaid amount from the date such amount is due until the date such amount is paid in full, payable on demand, at an interest rate per annum equal to sixteen percent (16%). 2.7. Interest Laws. Notwithstanding any provision to the contrary contained in this Agreement or the other Facility Documents, the Borrower shall not be required to pay, and the Lenders shall not be permitted to collect, any amount of interest in excess of the maximum amount of interest permitted by applicable law ("Excess Interest"). If any Excess Interest is provided for or determined by a court of competent jurisdiction to have been provided for in this Agreement or in any of the other Facility Documents, then in such event: (1) the provisions of this subsection shall govern and control; (2) the Borrower shall not be obligated to pay any Excess Interest; (3) any Excess Interest that any Lender may have received hereunder shall be, at such Lender's option, (a) applied as a credit against the outstanding principal balance of the Obligations or accrued and unpaid interest (not to exceed the maximum amount permitted by law), (b) refunded to the payor thereof, or (c) any combination of the foregoing; (4) the interest rate(s) provided for herein shall be automatically reduced to the maximum lawful rate allowed from time to time under applicable law (the "Maximum Rate"), and this Agreement and the other Facility Documents shall be deemed to have been, and shall be, reformed and modified to reflect such reduction; and (5) the Borrower shall not have any action against such Lender for any damages arising out of the payment or collection of any Excess Interest. Notwithstanding the foregoing, if for any period of time interest on any Obligations is calculated at the Maximum Rate rather than the applicable rate under this Agreement, and thereafter such applicable rate becomes less than the Maximum Rate, the rate of interest payable on such Obligations shall remain at the Maximum Rate until the Lenders shall have received the amount of interest which the Lenders would have received during such period on such Obligations had the rate of interest not been limited to the Maximum Rate during such period. 14 19 2.8. Method of Payment. All payments of principal, interest, expenses and other amounts hereunder shall be made by wire transfer in immediately available funds to the Lenders at the First National Bank of Maryland, Baltimore MD 21203, ABA# 052000113, Account No. 401-5029-0 (for the account of Hughes Network Systems, Inc.) (or, with respect to payments to be made to any Lender other than HNS, such other account as such Lender may notify the Borrower in writing at least three (3) Business Days prior to the scheduled date for any such payment) by noon (New York time) on the date when due. If any payment of principal of or interest on the Advances shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment. Unless otherwise provided herein or in the other Financing Documents, any payment of any principal or interest on the Notes, or of any of the other Obligations, shall be allocated among the Lenders pro rata based upon their respective Proportionate Shares. 2.9. Schedules to Notes. The Borrower hereby authorizes each Lender to endorse on the Schedule annexed to its Note the principal amount of all Advances made by such Lender to the Borrower as well as all additions to principal pursuant to Section 2.3(b) and all payments and prepayments of principal made pursuant to the terms hereof; provided, that the failure to make any such notations on such Schedule (or any error in such notation) shall not limit or otherwise affect the obligations of the Borrower under this Agreement or the Note. 2.10. Optional Prepayment. With respect only to those Notes held by HNS or any of its Affiliates at the time of receiving the notice of prepayment provided for in this Section 2.10 (or those Notes held by any other Person at the time of receiving any such notice of prepayment prior to the Advance Cutoff Date), the Borrower may, upon at least thirty (30) Business Days' prior written notice to HNS or such Affiliate (or such other Person), as applicable, stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall, prepay the outstanding aggregate principal on such Note, in whole or in part, together with accrued interest to the date of such prepayment on the principal amount prepaid; provided that (i) each partial prepayment shall be in an aggregate principal amount not less than $10,000,000 (or such lesser amount as is then outstanding) and shall be applied to principal installments in the inverse order of their maturities; provided, further, that this shall not limit or affect the rights of the Lender under Article VIII. Once prepaid, any amount of principal prepaid may not be reborrowed. For the avoidance of doubt, except as provided in Sections 2.2.(b), 2.2(d), 5.12 or 9.11, on and after July 1, 1999, any Note held by a Person other than HNS or its Affiliates which was transferred to such Person in accordance with the terms hereof may not be prepaid, in whole or in part, without the prior written consent of such Person, unless such Note was transferred to such Person by HNS or its Affiliate subsequent to receipt of the notice of prepayment provided for in this Section 2.10. Notwithstanding the foregoing, the Borrower shall have no right to prepay any Note during any Prepayment Moratorium Period. 2.11. Obligations Absolute. (a) The Borrower's obligation to pay all principal and interest on the Notes and all fees and expenses hereunder and under the other 15 20 Financing Documents, and to perform all other obligations hereunder and thereunder are absolute and unconditional and shall not be affected or reduced by any circumstances, including, without limitation: (i) any set-off, counterclaim, recoupment, defense, or other right which the Borrower, Geotek or any of their respective Affiliates may have against HNS, any other Lender, the Collateral Agent or any other Person for any reason whatsoever (whether in connection with the transactions contemplated hereby or by the other Facility Documents or otherwise), including, without limitation, any breach by HNS of any of its obligations under any of the Facility Documents or the Loan Agreement; (ii) any defect in the title, condition, design, operation, or fitness for use of, or any damage to or loss or destruction of, any of the Base Station Equipment, any interruption or cessation in the use of or possession thereof by, or the availability thereof to the Borrower, its Affiliates or any other Person for any reason whatsoever, whether arising out of or related to an act or omission of any Lender or any other Person; (iii) the invalidity or unenforceability or lack of due authorization or other infirmity of this Agreement or any absence of right, power or authority of HNS, the Borrower or Geotek or any other party to enter into this Agreement or any of the other Facility Documents, as the case may be; (iv) any insolvency, bankruptcy, reorganization, or similar proceedings by or against HNS, any other Lender, the Collateral Agent, the Borrower, Geotek or any other Person; (v) any other circumstance or happening of any nature whatsoever, whether or not similar to any of the foregoing, it being the express intention of the Lender, the Borrower and Geotek that all Obligations payable hereunder shall be payable in all events. (b) Nothing in this Agreement shall operate to excuse or diminish the Borrower's obligation to pay HNS the full purchase price of any Base Station Equipment ordered from HNS pursuant to the Manufacturing Agreement. ARTICLE III CONDITIONS PRECEDENT 3.1. Conditions to Initial Advance. The Obligation of the Lenders to make the Initial Advance hereunder is subject to the satisfaction of the following conditions precedent: 16 21 (i) (a) On the date of execution of this Agreement, HNS shall have received from the Borrower: (1) an original of this Agreement (including all Exhibits, Schedules and Annexes hereto), the Disclosure Letter, the Security Agreement, the Pledge Agreement, the Warrants, the Manufacturing Agreement, the Sales Representation Agreement and the Registration Rights Agreement, duly-executed by each party hereto and thereto, and all conditions precedent to the effectiveness of each such document shall have been satisfied or waived in writing by the Lenders; (2) an incumbency certificate of each Obligor, executed by the Secretary or an Assistant Secretary thereof, which shall identify by name and title and bear the signature of the officers of such Obligor authorized to sign the Facility Documents and (in the case of the Borrower) to submit Base Station Equipment Purchase Orders hereunder, upon which certificate the Lenders shall be entitled to rely until informed of any change in writing by such Obligor; (3) (A) a copy of the Certificate of Incorporation of each of the Obligors, together with all amendments thereto, certified by the appropriate governmental officer in its jurisdiction of incorporation and (B) certificates of good standing for each of the Obligors certified by the appropriate governmental officer in its jurisdiction of incorporation and in the State of New Jersey; (4) a copy of the By-Laws of each of the Obligors, together with all amendments thereto, certified by the Secretary or an Assistant Secretary of such Obligor; (5) a copy, certified by the Secretary or an Assistant Secretary of such Obligor, as applicable, of each Obligors' resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for the Lenders) authorizing the execution, delivery and performance of the Facility Documents to be executed by it and the transactions contemplated thereby; and (6) a notice complying with the requirements set forth in Section 3.2(i) of the Loan Agreement irrevocably obligating the Borrower to borrow $24,500,000 from HNS thereunder on the Initial Order Date (subject to satisfaction (or waiver by HNS) of the conditions precedent to borrowing set forth therein). (b) On the Initial Order Date, HNS shall have received from the Borrower: (1) a favorable opinion of counsel to the Obligors, dated as of the date hereof, addressed to the Lenders, with respect to matters of United States federal, New York and Delaware corporate law customary in transactions of the type contemplated by this Agreement, the Warrants and the Registration Rights Agreement, in substantially the form attached hereto as Exhibit E; 17 22 (2) the Facility Set-Up Fee (as defined in the Manufacturing Agreement), by wire transfer in immediately available funds; and (3) the Initial Order (as defined in the Manufacturing Agreement) and the required downpayment in connection therewith (by wire transfer in immediately available funds). (ii) On the date of execution of this Agreement each Lender shall have received its Note, duly executed by the Borrower. 3.2. Conditions to Each Advance. The Obligation of each Lender to make each of its Advances hereunder is subject to the satisfaction of the following conditions precedent: (i) On the applicable Order Date, the Borrower shall have furnished to HNS: (a) a purchase order (a "Base Station Equipment Purchase Order") conforming to the requirements of the Manufacturing Agreement setting forth the Base Station Equipment to be financed hereunder and providing for a delivery date conforming to the requirements of the Manufacturing Agreement and in any event on or prior to June 30, 1999; (b) at the option of the Borrower (in order to take advantage of the cancellation rights set forth in Section 3.3(a)), a written certificate signed by the Chief Financial Officer of the Borrower listing the country, state and county (or other applicable local jurisdiction) in which each item of Base Station Equipment subject to such Base Station Equipment Purchase Order will be first installed for operation after delivery from HNS (with a copy of such certificate to the Collateral Agent (if different from HNS)); and (c) a nonrefundable cash payment of ten percent (10%) (as adjusted prior to the applicable Advance Date to reflect Changes made pursuant to and as defined in the Manufacturing Agreement) of the aggregate purchase price for the Base Station Equipment covered by the applicable Base Station Equipment Purchase Order. For the avoidance of doubt, all such cash payments shall be retained by HNS as partial payment for the Base Station Equipment covered by the applicable Base Station Equipment Purchase Order and shall not reduce the unpaid amount of the Obligations. (ii) no later than forty-five (45) days before the delivery date specified in the applicable Base Station Equipment Purchase Order, the Borrower shall have furnished to HNS a written certificate signed by the Chief Financial Officer of the Borrower (a) setting forth the aggregate amount of the Advances requested by the Borrower in connection with such Base Station Equipment Purchase Order (which designation shall be irrevocable) and (2) stating that the aggregate amount of the Advances requested by the Borrower in connection with the applicable Base Station Equipment Purchase Order, when aggregated with all prior Advances, will not exceed the Maximum Advance Amount. 18 23 (iii) no later than forty-five (45) days before the delivery date specified in the applicable Base Station Equipment Purchase Order, the Borrower shall have furnished to the Collateral Agent, at the Borrower's expense; (a) (1) if the Borrower did not provide HNS on the applicable Order Date with the information specified in Section 3.2(i)(b), a written certificate signed by the Chief Financial Officer of the Borrower listing the country, state and county (or other applicable local jurisdiction) in which each item of Base Station Equipment subject to such Base Station Equipment Purchase Order will be first installed for operation after delivery from HNS and (2) duly-executed Uniform Commercial Code financing statements and/or fixture filings (or the functional equivalent in jurisdictions not subject to the Uniform Commercial Code) reasonably deemed necessary or desirable by the Collateral Agent to perfect its security interest in the Base Station Equipment to be sold to the Borrower pursuant to the Manufacturing Agreement and the applicable Base Station Equipment Purchase Order, in form suitable for filing in the appropriate filing offices; (b) the results of Uniform Commercial Code filing searches (or the functional equivalent in jurisdictions not subject to the Uniform Commercial Code) indicating that upon the sale of the applicable Base Station Equipment to the Borrower and the first installation for operation thereof, the Collateral Agent will have, for its benefit and the ratable benefit of the Lenders, a first- priority perfected security interest in such Base Station Equipment, subject only to Permitted Liens; (c) with respect to any Base Station Equipment to be located on any real property the owner or mortgagee of which (by statute, contract or otherwise) will have a Lien or other claim on such Base Station Equipment that is prior in right to the Lien of the Collateral Agent in such Base Station Equipment under the Security Agreement and the rental and other payment obligations for which are in the aggregate in excess of $10,000 per month (each, a "Landlord Waiver Location"), instruments executed by such owner and/or mortgagee, waiving or releasing such Lien or other claim, in suitable form for recording in the appropriate recording office (except to the extent that the aggregate purchase price of all Base Station Equipment located at Landlord Waiver Locations and not subject to such waiver or release does not exceed five percent (5%) of the aggregate purchase price of all Base Station Equipment then subject to the Lien of the Security Agreement); and (d) if reasonably deemed necessary or desirable by the Collateral Agent in its sole discretion, legal opinions (except as to priority (unless, with respect to jurisdictions outside of the United States, such opinions are customarily given in similar circumstances)), search results, certificates from governmental officials (United States or foreign) or other agreements, instruments or documents providing comfort to the Collateral Agent that, upon delivery to the Borrower (and thereafter until such security interest is released in accordance with the terms hereof and of the Security Agreement), the Collateral Agent will have, for its benefit and the ratable benefit of the Lenders, a fully-enforceable first-priority perfected security interest, 19 24 subject to no other Liens or claims of any Person (other than Permitted Liens (except as provided in Section 3.2(iii)(c)), in each item of Base Station Equipment subject to such Base Station Equipment Purchase Order. (iv) on the applicable Order Date the following statements shall be true and correct (and the furnishing by the Borrower to HNS of the applicable Base Station Equipment Purchase Order shall constitute a representation and warranty by the Borrower to the Lenders that on such Order Date such statements are true): (a) the representations and warranties contained in Article IV, in the Security Agreement and in the Pledge Agreement are true and correct on and as of such Order Date, before and after giving effect to the Advances contemplated by the applicable Base Station Equipment Purchase Order, as though made on and as of such date; and (b) no Default or Unmatured Default has occurred and is continuing as of such Order Date, before and after giving effect to the making of the Advances contemplated by the applicable Base Station Equipment Purchase Order. (v) on the applicable Advance Date the following statements shall be true and correct (and the acceptance by the Borrower of the applicable Advances shall constitute a representation and warranty by the Borrower to the Lenders that on such Advance Date such statements are true): (a) the representations and warranties contained in Article IV, in the Security Agreement and in the Pledge Agreement are true and correct on and as of such Advance Date, before and after giving effect to the making of such Advances, as though made on and as of such date; (b) no Default or Unmatured Default has occurred and is continuing as of such Advance Date, after giving effect to the making of such Advances; and (c) the aggregate amount of the Advances to be made to the Borrower on such Advance Date, when aggregated with all prior Advances, will not exceed the Maximum Advance Amount. (vi) On the applicable Advance Date, after giving effect to the Advances to be made on such Advance Date and the delivery to the Borrower of the Base Station Equipment covered by the applicable Base Station Equipment Invoice, the Collateral Agent shall have (and shall continue to have, after the applicable Advance Date and until such security interest is released in accordance with the terms hereof and of the Security Agreement), for its benefit and the ratable benefit of the Lenders, a fully-enforceable valid and perfected first-priority security interest in all of the Collateral owned by the Borrower on such Advance Date, including, without limitation, such Base Station Equipment, subject to no other Liens or claims of any Person, other than Permitted Liens (except as provided in Section 3.2(iii)(c) 20 25 and after giving effect to any express, written waivers by the Collateral Agent of any perfection requirements hereunder). 3.3. Changes and Cancellations. (a) If on the applicable Order Date the Borrower provided HNS with the information specified in Section 3.2(i)(b), and if within fifteen (15) Business Days of such Order Date the Borrower and the Collateral Agent determine that the Borrower will not be able to satisfy the condition precedent set forth in Section 3.2(iii)(c) with respect to any portion of the Base Station Equipment covered by a Base Station Equipment Purchase Order (the "Nonconforming Base Station Equipment"), the Borrower shall, within five (5) Business Days thereafter, (1) cancel its order with respect to such Nonconforming Base Station Equipment, (2) specify a new location for such Nonconforming Base Station Equipment that will cause the Borrower to satisfy the condition precedent set forth in Section 3.2(iii)(c) or (3) inform HNS and the other Lenders that it will pay cash for such Nonconforming Base Station Equipment, such payment to be made in accordance with the terms of the Manufacturing Agreement and subject to HNS' customary credit approval; provided, that the failure of the Borrower to notify HNS of its selection of either (1), (2) or (3) above shall be deemed to be a selection by the Borrower to pay cash for such Nonconforming Base Station Equipment no later than the applicable delivery date. (b) Adjustments to the purchase price of Base Station Equipment to be financed hereunder (and corresponding adjustments to the required 10% downpayment and the amount to be financed hereunder) shall be made to account for any Changes made pursuant to and as defined in the Manufacturing Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES Each of the Obligors represents and warrants to the Lenders that, except as otherwise set forth in the Disclosure Letter: 4.1. Corporate Existence and Standing. Each of Geotek and its Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to have such authority would not have a Material Adverse Effect. 4.2. Authorization and Validity. Each of the Obligors has the corporate power and authority to execute and deliver the Financing Documents to which it is a party and to perform its obligations thereunder. Each of the Financing Documents has been duly authorized, executed and delivered by the applicable Obligor and constitutes a legal, valid and binding obligation of the applicable Obligor,enforceable against the applicable Obligor in accordance with its terms, except as such enforceability may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights generally or general principles of equity (whether considered at law or in equity). 21 26 4.3. Compliance with Laws and Contracts. Neither the execution and delivery by each Obligor of the Financing Documents to which it is a party, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof, nor the use of the Base Station Equipment by Geotek or its Affiliates, will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Geotek or any of its Subsidiaries or Geotek's or any such Subsidiary's articles or certificate of incorporation or by-laws or the provisions of any indenture, instrument or agreement to which Geotek or any such Subsidiary is a party or is subject, or by which it, or its property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the property of Geotek or any such Subsidiary pursuant to the terms of any such indenture, instrument or agreement, except where such violation, conflict, default or Lien would not have a Material Adverse Effect. No order, consent, approval, license, permit, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Financing Documents (except with respect to enforceability of the remedies provided for in the Pledge Agreement, the requirement to obtain FCC approval before effecting any transfer of any FCC License). 4.4. Financial Statements. The June 30, 1996 consolidated financial statements of Geotek and its Subsidiaries heretofore delivered to HNS were prepared in accordance with GAAP in effect on the date such statements were prepared and consistent with prior periods and fairly present the consolidated financial condition and operations of Geotek and its Subsidiaries at such date and the consolidated results of their operations for the period then ended. 4.5. Material Adverse Change. No material adverse change in the business, condition (financial or otherwise), prospects or results of operations of Geotek and its Subsidiaries (on a consolidated basis) has occurred since the date of the financial statements referred to in Section 4.4. 4.6. Taxes. Geotek and its Subsidiaries have filed all United States federal tax returns and all other tax returns which are required to be filed prior to the date hereof and have paid all taxes due pursuant to said returns or pursuant to any assessment received by Geotek or any such Subsidiary (except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided), except, with respect only to Subsidiaries of Geotek other than the Borrower and its Subsidiaries, where the failure to so file or pay would not have a Material Adverse Effect. No tax liens have been filed, and no claims are being asserted with respect to any such taxes, except, with respect only to Subsidiaries of Geotek other than the Borrower and its Subsidiaries, where such tax liens or claims would not have a Material Adverse Effect. The charges, accruals and reserves on the books of Geotek and its Subsidiaries in respect of any taxes or other governmental charges are adequate, except, with respect only to Subsidiaries of Geotek other than the Borrower and its Subsidiaries, where the failure to maintain adequate charges, accruals or reserves would not have a Material Adverse Effect. 22 27 4.7. Litigation. There is no litigation or proceeding pending or, to the knowledge of any of their officers, threatened against or affecting Geotek or any of its Subsidiaries which might have a Material Adverse Effect. 4.8. ERISA. The Unfunded Liabilities of all Plans do not in the aggregate exceed $100,000. Each Plan complies in all material respects with all applicable requirements of law and regulations, and the minimum funding requirements with respect to all Plans have been met, no Reportable Event has occurred with respect to any Plan, no Lien in favor of the PBGC with respect to any Plan has arisen or been recorded, neither Geotek nor any of its Subsidiaries has withdrawn from any Plan or initiated steps to do so, and no steps have been taken to terminate any Plan. 4.9. Accuracy and Completeness of Information. No information, schedule, exhibit or report furnished by Geotek to HNS in connection with the negotiation of the Financing Documents contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading. 4.10. Material Agreements. None of the Subsidiaries of Geotek are party to any agreement or instrument or subject to any charter or corporate restriction which, individually or when taken together with all other such agreements, instruments or restrictions of all such Subsidiaries, is reasonably likely to have a Material Adverse Effect. Neither Geotek nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any agreement to which it is a party, which default might have a Material Adverse Effect or (ii) any agreement or instrument evidencing or governing Indebtedness of Geotek. The Obligors have made available to HNS copies of each agreement of Geotek which (a) evidences Indebtedness of Geotek or (b) if Geotek were to default in its obligations thereunder, might have a Material Adverse Effect. 4.11. Compliance with Law. Neither Geotek nor any of its Subsidiaries has violated or failed to comply with any law, rule, regulation, order, writ, judgment, injunction, decree or award which could have a Material Adverse Effect. 4.12. Subordinated Indebtedness. The Obligations are not subordinate to any Indebtedness of the Obligors. The Borrower's Obligations are senior (or, in the case of the Loan Agreement, pari passu) to all other Indebtedness of the Borrower. 4.13. Licenses and Permits. Geotek and each of its Subsidiaries have obtained and hold in full force and effect all licenses, permits, orders or approvals of, and have made all required registrations with, all state, federal and foreign government bodies that are material to the conduct of the business of Geotek or its Subsidiaries (collectively, "Permits"), except where the failure to have such Permits would not, individually or in the aggregate, have a Material Adverse Effect. All such Permits are in full force and effect and neither Geotek nor any of its Subsidiaries have violated any of the terms thereof, except where the failure to keep such Permits in full force and effect or where such violations would not, individually or in the aggregate, have a Material Adverse Effect. Geotek and any of its 23 28 Subsidiaries which hold or will hold 900 MHz Licenses are fully qualified to hold 900 MHz Licenses. ARTICLE V COVENANTS During the term of this Agreement, unless the Majority Lenders shall otherwise consent in writing: 5.1. Reporting. Geotek will furnish to the Lenders (a) Without duplication, copies of all reports, certificates, documents and other information required to be delivered to the trustee under the 1995 Indenture and the 1996 Indenture and to the lender under the S-C Rig Loan Agreement (in each case, as in effect on the date hereof and whether or not then in effect). The copies of any such reports, certificates or documents that are addressed to such trustee or lender shall be addressed to the Lenders. (b) Within forty-five (45) Business Days after the close of each fiscal quarter of the Borrower, a compliance certificate signed by the Chief Financial Officer of the Borrower stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof. (c) Within two hundred seventy (270) days after the close of each fiscal year, a statement of the Unfunded Liabilities of each Plan, certified as correct by an actuary enrolled under ERISA. (d) As soon as possible and in any event within (10) days after Geotek knows that any Reportable Event has occurred with respect to any Plan or any Lien has been asserted by the PBGC or has arisen with respect to any Plan, a statement, signed by the chief financial officer of Geotek, describing said Reportable Event or Lien and the action which Geotek proposes to take with respect thereto. (e) As soon as possible and in any event no later than two (2) Business Days after the occurrence thereof, written notice of the occurrence of a Change of Control. (f) Such other information as any Lender may from time to time reasonably request. 5.2. Notice of Default. Geotek will, and will cause each of its Subsidiaries to, give prompt notice in writing to the Lenders of the occurrence of any Default or Unmatured Default and of any other development, financial or otherwise, which might have a Material Adverse Effect. 24 29 5.3. Conduct of Business. Geotek will, and will cause each of its Subsidiaries to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted and to do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except where the failure to do so would not have a Material Adverse Effect. The Borrower will engage in no business or transaction other than (i) the holding of the capital stock of Holdings and certain other Subsidiaries formed to hold certain assets to be used directly for the provision of Specialized Mobile Radio services utilizing 900 MHz Licenses, (ii) the ownership of the Base Station Equipment purchased from HNS under the Manufacturing Agreement and (iii) the leasing or sale of Base Station Equipment in accordance with Section 5.12. 5.4. Taxes. Geotek will, and will cause each of its Subsidiaries to, pay when due all taxes, assessments and governmental charges and levies upon it or its income, profits or property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside. 5.5. Insurance. Geotek will, and will cause each of its Subsidiaries to, maintain with financially sound and reputable insurance companies insurance on its respective Base Station Equipment and all their other property in such amounts and covering such risks as is consistent with sound business practice, and Geotek will furnish to the Lenders upon request full information as to the insurance carried. 5.6. Compliance with Laws. Geotek will, and will cause each of its Subsidiaries to, comply with (i) all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject and (ii) the terms of all FCC Licenses held by it, including any obligation to construct facilities and place them in operation with a minimum number of sites and/or customers by a specified date, except where the failure to do so would not have a Material Adverse Effect. 5.7. Maintenance of Properties. Geotek will, and will cause each of its Subsidiaries to, do all things necessary to maintain, preserve, protect and keep its properties in good repair, working order and condition, and make all necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times, except where the failure to do so would not have a Material Adverse Effect. 5.8. Inspection. Geotek will, and will cause each of its Subsidiaries to, permit representatives and agents appointed by the Collateral Agent or the Majority Lenders, to inspect any of the properties, licenses, corporate books and financial records of Geotek and each such Subsidiary, to examine and make copies of the books of accounts and other financial records of Geotek and each Subsidiary, and to discuss the affairs, finances and accounts of Geotek and each Subsidiary with, and to be advised as to the same by, their respective officers at such reasonable times and intervals as the Collateral Agent or the Majority Lenders may designate. Geotek may require as a condition of any such inspection 25 30 and/or discussions that such representatives and agents enter into confidentiality agreements customary in the asset-based lending field in form and substance reasonably satisfactory to Geotek. 5.9. Restricted Payments. Prior to July 15, 2000, the Borrower will not, nor will it permit any of its Subsidiaries to, (i) declare or pay any dividends on its capital stock (other than dividends payable in its own capital stock) or redeem, repurchase or otherwise acquire or retire any of its capital stock at any time outstanding, except that any of the Borrower's Subsidiaries may declare and pay dividends to the Borrower or to a Wholly-Owned Subsidiary of the Borrower or (ii) directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Indebtedness. 5.10. Indebtedness. The Borrower will not, nor will it permit any of its Subsidiaries to, incur any Indebtedness other than (i) the Advances (in the case of the Borrower), (ii) the Indebtedness of the Borrower under the Loan Agreement, (iii) the Holdings Note (in the case of Holdings) and (iv) the Guarantees by the Borrower and Holdings required to be provided under the 1995 Indenture as in effect on the date hereof. 5.11. Corporate Changes. The Borrower will not, nor will it permit any of its Subsidiaries to, merge or consolidate with or into any other Person or otherwise alter or modify the Borrower's or any Subsidiary's certificate or articles of incorporation or by-laws (unless such alteration or modification would not have a Material Adverse Effect), corporate names, mailing addresses, principal places of business, structure, status or existence. 5.12. Sale of Assets. Subject to the second sentence of this Section 5.12 and as contemplated by the proviso in the second sentence of Section 5.13 of the Loan Agreement, the Borrower will not, nor will it permit any of its Subsidiaries to, lease, sell or otherwise dispose of all, or a substantial portion of, its property, assets or business to any other Person. The Borrower will not sell, assign, lease, convey or otherwise transfer any interest in any of the Collateral, except that the Borrower may: (i) sell any Base Station Equipment if: (a) simultaneous with such sale, the Borrower repays the remaining unpaid principal balance of the Advances in respect of such Base Station Equipment (i.e., up to ninety percent (90%) of the purchase price thereof) (together with all accrued and unpaid interest thereon); (b) such sale is made expressly subject to the Collateral Agent's security interest in such Base Station Equipment and the Collateral Agent is satisfied in its reasonable discretion that following such sale the Collateral Agent will continue to have a fully-enforceable, first-priority security interest in such Collateral, subject to no other Liens or other claims of any Person (other than Permitted Liens), it being understood that the Collateral Agent may require the purchaser of such Base Station Equipment (and its lenders, landlords and mortgagees) to enter into certain 26 31 agreements with the Borrower and/or the Collateral Agent in order to satisfy the Collateral Agent hereunder; or (c) the Borrower receives "fair value" for such Base Station Equipment (as certified by the Chief Financial Officer of the Borrower with respect to sales of Base Station Equipment the original purchase price of which was less than $3,000,000, and as determined by a reputable, experienced independent appraiser of wireless communications equipment reasonably acceptable to the Collateral Agent with respect to sales the original purchase price of which was equal to or greater than $3,000,000 (it being agreed, however, that the "fair value" of Base Station Equipment sold by the Borrower shall not be less than (x) prior to first installation thereof, the original purchase price thereof, as established pursuant to the Manufacturing Agreement and (y) after first installation thereof, the net book value thereof at the time of such sale)) in the form of cash in which the Collateral Agent has a fully- enforceable, first-priority perfected security interest (subject only to Permitted Liens not otherwise waived or released hereunder) as security for the Obligations until (1) used by the Borrower to (A) repay all or a portion of the Advances or (B) purchase from HNS other wireless communications equipment ("Replacement Communications Equipment") in which the Collateral Agent is granted a fully- enforceable, first-priority perfected security interest (subject only to Permitted Liens not otherwise waived or released hereunder) as security for the Obligations or (2) the Base Station Equipment so sold is reacquired by the Borrower ("Reacquired Base Station Equipment")and the Collateral Agent is granted a fully-enforceable, first-priority perfected security interest therein (subject only to Permitted Liens not otherwise waived or released hereunder) (it being understood that the determination of the enforceability, priority or perfection of any security interest referred to in this clause (c) shall be made by the Collateral Agent in its reasonable discretion and that the Collateral Agent may require the Borrower to deliver a legal opinion of counsel reasonably acceptable to the Collateral Agent with respect to such matters of enforceability, priority (but only with respect to jurisdictions outside of the United States where such opinions are customarily given in similar circumstances) and perfection); and (ii) lease any Base Station Equipment if: (a) such lease is made expressly subject and subordinate to the Collateral Agent's security interest in such Base Station Equipment; (b) such lease is on arms-length terms and at market rates; and (c) the Collateral Agent is satisfied in its reasonable discretion that after the commencement of such lease the Collateral Agent will continue to have a fully-enforceable, first-priority security interest in such Collateral, subject to no other Liens or other claims of any Person (other than Permitted Liens), it being understood that the Collateral Agent may require the lessee (and its lenders, landlords and mortgagees) of such Base Station Equipment to enter into certain agreements with the 27 32 Borrower and/or the Collateral Agent in order to satisfy the Collateral Agent hereunder. For the avoidance of doubt, neither the Collateral Agent nor any of the Lenders shall be responsible for any of the costs of fulfilling the requirements of subsection 5.12(i)(b), 5.12(i)(c) or 5.12(ii). 5.13. Sale and Leaseback. The Borrower will not, nor will it permit any of its Subsidiaries to, sell or transfer any property in order to concurrently or subsequently lease as lessee such or similar property. 5.14. Investments and Acquisitions. The Borrower will not, nor will it permit any of its Subsidiaries to, make or suffer to exist any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or commitments therefor, or to create any new Subsidiary or to become or remain a partner in any partnership or joint venture, or to acquire any going business or all or substantially all of the assets of any Person or any division or business of a Person, whether through purchase of assets, merger or otherwise, except existing Investments in Subsidiaries in existence on the date hereof and the purchases of 900 MHz Licenses and related assets as provided in the Loan Agreement. 5.15. Guarantees. The Borrower will not, nor will it permit any of its Subsidiaries to, make or suffer to exist any Guaranty (including, without limitation, any Guaranty of the obligations of a Subsidiary of Geotek), other than the Guarantees by the Borrower and Holdings required to be provided under the 1995 Indenture as in effect on the date hereof. 5.16. Liens. The Borrower will not, nor will it permit any of its Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the property of the Borrower or any of its Subsidiaries, except Permitted Liens. 5.17. Asset Expenditures. The Borrower will not, nor will it permit any of its Subsidiaries to, acquire any assets, other than the acquisition (or reacquisition) by the Borrower or its Subsidiaries of Base Station Equipment pursuant to the Manufacturing Agreement or hereto (including, without limitation, Section 5.12(c)), as applicable, and the acquisition by Holdings of the 900 MHz Licenses and related assets as provided in the Loan Agreement. 5.18. Rentals. The Borrower will not, nor will it permit any of its Subsidiaries to, create, incur or suffer to exist any obligations for Rentals. 5.19. Letters of Credit. The Borrower will not, nor will it permit any of its Subsidiaries to, apply for or become liable with respect to any Letter of Credit (other than for the benefit of HNS). 28 33 5.20. Affiliates. The Borrower will not, nor will it permit any of its Subsidiaries to, enter into any transaction with any Affiliate, except as contemplated by this Agreement (including, without limitation, Sections 5.12 and 5.17). 5.21. Preservation of Licenses. The Borrower will not, and will not permit any of its Subsidiaries to, allow any FCC License held by it to lapse or be revoked or suspended. 5.22. Ownership of Borrower and Holdings. The Borrower shall at all times be a Wholly-Owned Subsidiary of Geotek and Holdings shall at all times be a Wholly-Owned Subsidiary of the Borrower. 5.23. Compliance with other Agreements. Geotek shall, and shall cause each of its Subsidiaries to, comply with all covenants, restrictions and other agreements applicable to them in the 1995 Indenture, the 1996 Indenture and the S-C Rig Loan Agreement as in effect on the date hereof (without giving effect to any amendments, waivers or other modifications thereof or supplements thereto, unless otherwise consented to in writing by the Majority Lenders, such consent not to be unreasonably withheld). 5.24. Further Assurances. Geotek shall take, and shall cause each of the Subsidiaries to take, all such further actions and execute all such further documents and instruments as the Collateral Agent may at any time reasonably determine to be necessary or desirable to further carry out and consummate the transactions contemplated by the Financing Documents, to cause the execution, delivery and performance of the Financing Documents to be duly authorized and to perfect, protect and maintain the Liens (and the priority status thereof) of the Collateral Agent on the Collateral. 5.25. Payments. Geotek will, and will cause its Subsidiaries (and any other Person obligated thereon) to, pay when due all rent or mortgage loan installments with respect to any Landlord Waiver Location, except where such payments are being contested in good faith if a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof. ARTICLE VI GUARANTY 6.1. The Guaranty. The Guarantor hereby absolutely, unconditionally and irrevocably guarantees to the Lenders and their respective successors and assigns the full and punctual payment and performance (whether at stated maturity, upon acceleration or otherwise) of the Obligations, including all reasonable costs of collection and enforcement thereof (including, without limitation, all fees and disbursements of counsel) and interest thereon which would be owing by the Borrower but for the effect of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (collectively, the "Guaranteed Obligations"). The Guarantor understands, agrees and confirms that any Lender may enforce this Guaranty up to the full amount guaranteed by the Guarantor hereunder without proceeding against the Borrower or 29 34 any other obligor, against the Collateral or against any other guarantor under any other guarantee covering the Guaranteed Obligations. All payments made by the Guarantor under this Guaranty shall be paid at the place and in the manner specified in Section 2.8. 6.2. Guaranty Unconditional. The obligations of the Guarantor hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by: (a) any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of any Obligor under any of the Facility Documents, by operation of law or otherwise; (b) any modification or amendment of or supplement to this Agreement, any Note or any of the other Facility Documents, including, without limitation, any increase in the principal amount of the Advances; (c) any release, non-perfection or invalidity of any direct or indirect security herefor or for, or any other guarantee of, any of the Guaranteed Obligations; (d) any change in the corporate existence, structure or ownership of any of the Obligors, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting any of the Obligors or any of their assets or any resulting release or discharge of any obligation of any Obligor contained in this Agreement or any Note; (e) the existence of any claim, set-off or other rights which the Guarantor may have at any time against the Borrower or any other Person, whether in connection herewith or with any unrelated transactions, provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; (f) any invalidity or unenforceability relating to or against any Obligor for any reason of any of the Facility Documents, or any provision of applicable law or regulation purporting to prohibit the payment by the Borrower of the principal of or interest on the Advances or any other amount payable by it under the Facility Documents; or (g) any other act or omission to act or delay of any kind by any Obligor or any other Person or any other circumstance whatsoever which might, but for the provisions of this paragraph, constitute a legal or equitable discharge of the Guarantor's obligations hereunder. In addition, the obligations of the Guarantor hereunder are joint and several with the obligations of each other guarantor or obligor in respect of the Guaranteed Obligations. 30 35 6.3. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances. The Guarantor's obligations hereunder shall remain in full force and effect until the Guaranteed Obligations shall have been paid in full. If at any time any payment of any of the Guaranteed Obligations is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, the Guarantor's obligations hereunder with respect to such payment shall be reinstated at such time as though such payment had been due but not made at such time. 6.4. Waivers by the Guarantor. The Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against the Borrower or any other Person. 6.5. Subrogation. Prior to July 15, 2000, the Guarantor shall not exercise any rights which it may have acquired by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, nor shall the Guarantor seek any reimbursement from the Borrower in respect of payments made by the Guarantor hereunder, unless and until all of the Guaranteed Obligations shall have been paid to the Lenders and discharged, in full. On or after July 15, 2000, to the extent not expressly prohibited by the terms of the 1995 Indenture or the S-C Rig Loan Agreement (each as in effect on the date hereof), the Guarantor shall not exercise any rights which it may have acquired by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, nor shall the Guarantor seek any reimbursement from the Borrower in respect of payments made by the Guarantor hereunder, unless and until all of the Guaranteed Obligations shall have been paid to the Lenders and discharged, in full. If any payment shall be made to the Guarantor on account of the subrogation, contribution or reimbursement rights discussed in this Section 6.5 at any time when the Guaranteed Obligations shall not have been paid and discharged, in full, each and every amount so paid shall forthwith be paid to the Lenders to be credited and applied against the Guaranteed Obligations, whether matured or unmatured. 6.6. Stay of Acceleration. In the event that acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of this Agreement and the Note shall nonetheless be payable by the Guarantor forthwith on demand by the Lender. ARTICLE VII DEFAULTS The occurrence of any one or more of the following events shall constitute a Default: 7.1. Any representation or warranty made or deemed made by or on behalf of either of the Obligors to the Collateral Agent or the Lenders under or in connection with this Agreement, any Note, any other Financing Document or any certificate or information 31 36 delivered in connection herewith or therewith shall be materially false as of the date on which made. 7.2. (a) Nonpayment of principal of any Note within one (1) day of when due, or (b) nonpayment of interest upon any Note or of any other Obligations under any of the Financing Documents within five (5) days of notice from any Lender of such nonpayment or, with respect to nonpayment of interest, if shorter, within eight (8) days of when due. 7.3. The breach by either Obligor of any of the terms or provisions of Article V (except, with respect to a breach by the Borrower of Section 5.25 only, if all overdue rent payments (not being contested in good faith as provided in Section 5.25) with respect to all leases for all Landlord Waiver Locations do not, in the aggregate, exceed at any time $50,000) and, where such breach is reasonably capable of cure and provided such breach has not otherwise caused a Material Adverse Effect, the failure of either Obligor to cure such breach within thirty (30) days of a senior officer of either Obligor obtaining actual knowledge thereof. 7.4. The breach by either Obligor (other than a breach which constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this Agreement or any Note which is not remedied within ten (10) days after written notice from the Collateral Agent. 7.5. Failure of Geotek or any of its Subsidiaries to pay any Indebtedness in excess of $2,000,000 when due (including any applicable grace periods); or the default by Geotek or any of its Subsidiaries in the performance of any term, provision or condition contained in any agreement under which any Indebtedness in excess of $3,500,000 was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or any Indebtedness in excess of $3,500,000 shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment) prior to the stated maturity thereof. 7.6. Geotek, the Borrower or any of the Borrower's Subsidiaries shall (a) have an order for relief entered with respect to it under the Federal Bankruptcy Code, (b) not pay, or admit in writing its inability to pay, its debts generally as they become due, (c) make an assignment for the benefit of creditors, (d) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its property, (e) institute any proceeding seeking an order for relief under the Federal Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (f) take any corporate action to authorize or effect any of the foregoing actions set forth in this Section 7.6, or (g) fail to contest in good faith any appointment or proceeding described in Section 7.7. 32 37 7.7. Without the application, approval or consent of Geotek, the Borrower or any of the Borrower's Subsidiaries, a receiver, trustee, examiner, liquidator or similar official shall be appointed for Geotek, the Borrower or any of the Borrower's Subsidiaries or any substantial part of their respective properties, or a proceeding described in Section 7.6(e) shall be instituted against Geotek, the Borrower or any of the Borrower's Subsidiaries and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 60 consecutive days. 7.8. Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of greater than $1,000,000 worth of Collateral (as measured by the aggregate purchase price thereof) or all or any substantial portion of the property of Geotek, the Borrower or any of the Borrower's Subsidiaries. 7.9. Geotek, the Borrower or any of the Borrower's Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge any judgment or order for the payment of money in excess of $1,000,000 which is not stayed on appeal or otherwise being appropriately contested in good faith. 7.10. The Unfunded Liabilities of all Plans shall exceed in the aggregate $1,000,000, any Lien in favor of the PBGC with respect to any Plan shall arise or be recorded, or any Reportable Event shall occur in connection with any Plan. 7.11. Any Lien, levy or assessment is filed or recorded with respect to or otherwise imposed upon all or any part of the Collateral by the United States or any department or instrumentality thereof or by any state, county, municipality or other governmental agency (other than Permitted Liens) and such lien, levy or assessment is not stayed, vacated, paid or discharged within ten (10) days. 7.12. Geotek, the Borrower or any of the Borrower's Subsidiaries is enjoined, restrained or in any way prevented by the order of any court or any administrative or regulatory agency from conducting all or any material part of its business and such order continues for more than thirty (30) days. 7.13. Any of the Financing Documents for any reason, other than a partial or full release in accordance with the terms thereof, ceases to be in full force and effect or is declared to be null and void, or either Obligor denies that it has any further liability under any Financing Document to which it is party, or gives notice to such effect. 7.14. Any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for more than fifteen (15) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of Geotek or any of its Subsidiaries if any such event or circumstance could have a Material Adverse Effect. 7.15. The loss, suspension, revocation or amendment of, or failure to renew, any FCC License now held or hereafter acquired by Geotek or any of its Subsidiaries, if 33 38 such loss, suspension, revocation, amendment or failure to renew could have a Material Adverse Effect. For purposes of this Section 7.15, the loss, suspension, revocation or failure to renew of any 900 MHz License owned by the Borrower or any of its Subsidiaries is deemed to have a Material Adverse Effect. 7.16. The FCC schedules or conducts a hearing with respect to, or commences an action or proceeding seeking the termination, suspension, revocation or material adverse amendment of, any FCC License now held or hereafter acquired by Geotek or any of its Subsidiaries (other than a hearing with respect to a pending competing application) and (i) the Majority Lenders reasonably believe that the result thereof would be the termination, revocation, suspension or material adverse amendment of such License and (ii) in the case of any Subsidiary of Geotek other than the Borrower or any of the Borrower's Subsidiaries, such termination, revocation, suspension or material adverse amendment would have a Material Adverse Effect. 7.17. Geotek or any of its Subsidiaries defaults in the payment of any other written obligation to HNS in excess of $2,000,000, including, without limitation, with respect to any extension of trade credit by HNS; provided that such default shall not be a Default if it is the subject of a good-faith dispute for no longer than ninety (90) days. 7.18. The Collateral Agent does not have or ceases to have a fully-enforceable valid and perfected first-priority security interest in the Collateral (subject only to Permitted Liens (except as provided in Section 3.2(iii)(c)), in each case, for any reason other than the failure of the Collateral Agent to take any reasonable action (other than involving the payment of money) within its control and requested in writing by the Borrower (and which is not otherwise the responsibility of the Borrower hereunder or under the Collateral Documents). 7.19. Any judgment, order or ruling is entered, or partial or full resolution is reached, with respect to any litigation or proceeding listed in the Disclosure Letter (or any Schedule thereto), which judgment, order, ruling or resolution could have a Material Adverse Effect. 7.20. The breach by Geotek or any of its Subsidiaries of any of the terms or provisions of any of the other Financing Documents and, where such breach is reasonably capable of cure and provided such breach has not otherwise caused a Material Adverse Effect, the failure of Geotek or such Subsidiary to cure such breach within ten (10) days of becoming aware thereof. 7.21. The breach by the Borrower of its obligations to the Lender under Section 5.3 of the Manufacturing Agreement. 34 39 7.22. Any court shall enjoin the manufacture, sale, lease, use, repair, reconstruction, import or export of the Base Station Equipment by Geotek, the Borrower or PST on the grounds of infringement of intellectual property rights held by a third party. ARTICLE VIII ACCELERATION, REMEDIES, WAIVERS AND AMENDMENTS 8.1. Acceleration. If any Default described in Section 7.6 or 7.7 occurs, the obligation of the Lenders to make Advances hereunder shall immediately and automatically terminate and the Obligations shall immediately become due and payable, in each case without any election or action on the part of the Lenders. If any other Default occurs, the Majority Lenders may (i) declare the obligation of the Lenders to make Advances to be terminated, whereupon the same shall forthwith terminate and (ii) declare the Obligations to be due and payable, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Obligors hereby expressly waive. The Lenders' remedies hereunder shall be in addition to any remedies available to the Lenders or the Collateral Agent upon a Default under any of the other Financing Documents or otherwise pursuant to applicable law. All remedies contained in the Financing Documents or by law afforded shall be cumulative and all shall be available to the Lenders and the Collateral Agent until the Obligations have been paid in full. No individual Lender shall have any right to institute any proceeding or pursue any remedy with respect to this Agreement, the Notes or any other Financing Document (such right belonging to the Majority Lenders (or the Collateral Agent, at the direction of the Majority Lenders)); provided, however, that any Lender may institute a proceeding or pursue any remedy for the enforcement of the payment of principal of, or accrued interest on, any Note on or after the respective due dates set forth in such Note (or any applicable prepayment date, if earlier), subject to applicable grace periods; provided, further, that the foregoing shall not limit any right of HNS (in its individual capacity and not as a Lender hereunder) to institute any proceeding or pursue any remedy under the Manufacturing Agreement, the Sales Representation Agreement or any other Facility Document (other than the Financing Documents). 8.2. Preservation of Rights; Amendments and Waivers. No delay or omission of the Lenders or the Collateral Agent to exercise any right under the Facility Documents shall impair such right or be construed to be a waiver of any Default or an acquiescence therein. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right, and no waiver, amendment or other variation of the terms, conditions or provisions of the Financing Documents whatsoever shall be valid unless in writing signed by the Majority Lenders, and then only to the extent in such writing specifically set forth; provided that the consent of all the Lenders is required to (i) increase the Maximum Advance Amount, (ii) reduce the principal of, or interest on, the Notes, (iii) postpone any date fixed for any payment in respect of principal of, or interest on, the Notes, (iv) change the percentage of the 35 40 Commitments, or any minimum requirement necessary for the Lenders or the Majority Lenders to take any action hereunder, (v) change the definition of Majority Lenders or (vi) except as otherwise expressly provided in this Agreement or the other Financing Documents, and other than in connection with the sale or other disposition of any asset of the Borrower permitted under this Agreement, release any Liens in favor of the Lenders on a material portion of the Collateral; provided, further, that the consent of the Collateral Agent shall be required for any amendment, waiver or consent affecting the rights or duties of the Collateral Agent under any Financing Document, in addition to the consent of the Majority Lenders or the Lenders otherwise required by this Section. ARTICLE IX GENERAL PROVISIONS 9.1. Successors and Assigns. (a) The terms and provisions of the Facility Documents shall be binding upon and inure to the benefit of the Obligors, the Lenders, the Collateral Agent and their respective successors and assigns. (b) Subject to the Securities Act and applicable state securities laws, the Lender may (i) on or prior to the Advance Cutoff Date, (1) sell, assign or otherwise transfer the Note, subject to the terms thereof (and its rights and obligations under the other Financing Documents), in whole or in part, to (A) any Hughes Subsidiary, (B) any other Affiliate of the Lender (other than a competitor of Geotek engaged or, to the knowledge of the Lender, planning to engage in the business of providing wireless voice or data communications services to mobile customers or of providing equipment in connection therewith) or, (C) with the prior written consent of Geotek, such consent not to be unreasonably withheld, any other Person or (2) assign the payments due under the Note to any bank or financial institution and (ii) after the Advance Cutoff Date, sell, assign or otherwise transfer the Note, subject to the terms thereof (and its rights and obligations under the other Financing Documents), in whole or in part (but in parts representing no less than $1,000,000 in principal amount), to any Person (other than a competitor of Geotek engaged or, to the knowledge of the Lender, planning to engage in the business of providing wireless voice or data communications services to mobile customers or of providing equipment in connection therewith (except for Hughes Subsidiaries)). Notwithstanding the foregoing, after the occurrence and during the continuance of a Default, the Lender may sell, assign or otherwise transfer the Note (and its rights and obligations under the other Financing Documents) to any Person without any restriction (other than as imposed by the Securities Act and applicable state securities laws) or right of the Borrower to approve or disapprove such transfer. (c) Except upon the occurrence and during the continuance of a Default, before HNS or any of its Affiliates may sell, assign or otherwise transfer any Note pursuant to Section 9.1(b), it shall give the Borrower written notice of its good faith intention to do so, whereupon the Borrower shall have fifteen (15) days from the date of such notice 36 41 (the "Prepayment Notice Period") to notify HNS or such Affiliate in writing of its intention to prepay such Note in its entirety (including any accrued and unpaid interest and any other Obligations allocable thereto). If the Borrower so chooses to prepay such Note, it shall do so within thirty (30) days of its notice to HNS or such Affiliate of such intention to do so. If the Borrower does not give HNS or such Affiliate notice of its intention to prepay such Note during the Prepayment Notice Period, then HNS or such Affiliate may sell, assign or otherwise transfer such Note or any portion thereof at any time during the seventy-five (75) day period beginning on the day immediately following the last day of the applicable Prepayment Notice Period without any right of the Borrower to prepay such Note hereunder or under Section 2.10 (the "Prepayment Moratorium Period"). If HNS or such Affiliate does not sell, assign or otherwise transfer such Note or any portion thereof during the Prepayment Moratorium Period, the Borrower's prepayment rights hereunder shall revive with respect to any portion not sold, assigned or transferred until the occurrence of another Prepayment Moratorium Period in accordance herewith. (d) The Obligors authorize the Lenders to disclose to any prospective purchaser, assignee or other transferee of an interest in the Financing Documents the Financing Documents and any financial or other information pertaining to the Financing Documents and the Advances known to the Lenders and the Obligors agree to cooperate in providing such purchaser or prospective purchaser with any publicly- filed or publicly-available information about the Obligors or their respective businesses. (e) Except as expressly set forth to the contrary in Section 9.1(b), from and after the completion of any sale, assignment or other transfer permitted hereunder, the purchaser, assignee or transferee shall have all of the rights and obligations of a "Lender" hereunder and under the other Financing Documents, to the extent of the interest sold, assigned or otherwise transferred to such Person. (f) In connection with any sale, assignment or other transfer permitted hereunder, the Borrower and the Lenders agree to execute such agreements, certificates, instruments or other documents, and to take such other actions as the transferor or transferee Lender or the Borrower may reasonably request (including, without limitation, the execution and delivery by the Borrower of replacement Notes), to evidence such sale, assignment or other transfer and to preserve the rights of the Lenders, such transferee and the Borrower under the Notes and the other Financing Documents (including, without limitation, their respective rights and the rights of the Collateral Agent in the Collateral). (g) The Obligors may not assign or otherwise transfer any of their rights or obligations under any of the Facility Documents. 9.2. Survival of Representations. All representations and warranties of the Obligors contained in any Financing Document shall survive delivery of the Notes and the making of the Advances herein contemplated. 37 42 9.3. Governmental Regulation. Anything contained in any Facility Document to the contrary notwithstanding, the Lenders shall not be obligated to extend credit to the Borrower in violation of any limitation or prohibition provided by any applicable statute or regulation. 9.4. New York Law; Submission to Jurisdiction; Waiver of Jury Trial; Service of Process. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY (AND APPELLATE COURTS FROM ANY THEREOF) FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH OBLIGOR AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE APPLICABLE OBLIGOR AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES TO THIS AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED PURSUANT TO SECTION 10.2. 9.5. Headings. Section headings in the Financing Documents are for convenience of reference only, and shall not govern the interpretation of any of the provisions of the Financing Documents. 9.6. Entire Agreement. The Facility Documents embody the entire agreement and understanding among the Obligors, the Lenders and the Collateral Agent and supersede all prior agreements and understandings among the Obligors, the Lenders and the Collateral Agent relating to the subject matter thereof. 9.7. Expenses; Indemnification. The Obligors agree, jointly and severally, to reimburse the Lenders and the Collateral Agent for any out-of-pocket costs and expenses 38 43 (including reasonable fees and time charges of outside legal counsel to the Collateral Agent) paid or incurred by the Lenders and the Collateral Agent in connection with (i) obtaining (or confirming) the required perfection and first-priority status of the Collateral Agent's security interest in the Base Station Equipment ("Perfection Costs") and (ii) after the occurrence and during the continuance of a Default, the collection and enforcement of the Financing Documents. The Obligors further agree, jointly and severally, to indemnify the Lenders, the Collateral Agent and their respective directors, officers, employees, agents and attorneys (collectively, the "Indemnified Parties") against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation (or preparation therefor (if litigation actually commences)) whether or not any Indemnified Party is a party thereto, but excluding the costs of negotiating, documenting and closing the financing transaction contemplated by this Agreement (other than Perfection Costs)) (collectively, "Costs") which any of them may pay or incur arising out of or relating to this Agreement, the other Financing Documents, the transactions contemplated hereby or the direct or indirect application or proposed application of the proceeds of the Advances; provided, however, that with respect to any Costs incurred in connection with any legal proceeding between an Indemnified Party and one or more of the Obligors (solely as such Costs relate to the matter or matters in dispute between an Obligor or the Obligors and such Indemnified Party and not to any matters in dispute between such Indemnified Party and any third party), the Obligors shall only be required to indemnify such Indemnified Party in the event the Indemnified Party shall finally prevail in such proceeding (as evidenced by a final judgment not subject to further appeal). The obligations of the parties under this Section shall survive the termination of this Agreement. 9.8. Accounting. Except as provided to the contrary herein, all accounting terms used herein shall be interpreted and all accounting determinations hereunder shall be made in accordance with Agreement Accounting Principles. 9.9. Severability of Provisions. Any provision in any Financing Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Financing Documents are declared to be severable. 9.10. Confidentiality; Public Disclosures. Subject to the parties' disclosure obligations under the Securities Act and the Exchange Act, and unless otherwise permitted under Section 9.1(d) or required by law or order of a court, administrative agency or other quasi- judicial body of competent jurisdiction, and then only after providing prompt written notice of its intention to disclose, no party hereto shall issue any press release or make any public statement relating to the transactions evidenced by this Agreement or otherwise disclose this agreement to any third party without the other parties' written approval (such approval not to be unreasonably withheld), except that this Agreement may be disclosed to 39 44 each party's attorneys, financial advisors and others in a confidential relationship to such party. 9.11. Risk of Loss. The Borrower bears the risk of loss of the Base Station Equipment financed hereunder. If any item of such Base Station Equipment is lost, stolen, destroyed, damaged beyond repair or rendered permanently unfit for use (each, a "Loss"), the Borrower shall immediately notify the Lenders, and shall, no later than thirty (30) days from the date of such Loss, pay to the Lenders the remaining unpaid principal balance of the Advances in respect of such item (i.e., up to ninety percent (90%) of the purchase price thereof), together with all amounts of interest and other amounts due to the Lenders with respect to such item. 9.12. Setoff. To the extent that any amount is owing at any time to Geotek by HNS pursuant to any of the Warrants for the payment of the "Exercise Price" thereunder, HNS may satisfy such amount, in whole or in part, by set-off against any amount then due and payable by either Obligor hereunder (whether at the stated maturity, by acceleration or otherwise). 9.13. Registration Rights. The Notes shall be entitled to the Registration Rights set forth in the Registration Rights Agreement. In connection therewith, the parties hereto agree to any amendments to this Agreement made pursuant to and as contemplated by Section 6(a) thereof. ARTICLE X NOTICES 10.1. Giving Notice. Any notice required or permitted to be given under this Agreement may be, and shall be deemed, given when personally delivered, or when deposited in the United States mail for overnight delivery, postage prepaid, or when sent by facsimile transmission and mechanical confirmation of a successful transmission has been received, or when deposited with a reputable overnight delivery service, charges prepaid, in each case addressed to the applicable Obligor or HNS at the addresses indicated below their signatures to this Agreement or to any other Lender at the address specified in writing by such Lender to the parties hereto. All notices to be given to the Collateral Agent hereunder or under the other Financing Documents shall, so long as HNS is the Collateral Agent, be delivered to the address for notices to HNS set forth on the signature page hereto. 10.2. Change of Address. The Obligors, HNS, the Lenders and the Collateral Agent may each change the address for service of notice upon it by a notice in writing to the other parties hereto. 40 45 ARTICLE XI COUNTERPARTS This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and either of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by each of the Obligors and HNS. [SIGNATURE PAGE FOLLOWS] 41 46 IN WITNESS WHEREOF, the Borrower, Geotek and the Lender have executed this Agreement as of the date first above written. Borrower: GEOTEK FINANCING CORPORATION By: /s/ Michael McCoy -------------------------------------------- Title: Chief Financial Officer Address: c/o Geotek Communications, Inc. 20 Craig Road Montvale, NJ 07645 Telecopy No.: (201) 930-9614 Geotek (Guarantor): GEOTEK COMMUNICATIONS, INC. By: /s/ Michael McCoy -------------------------------------------- Title: Chief Financial Officer Address: 20 Craig Road Montvale, NJ 07645 Telecopy No.: (201) 930-9614 HNS (Lender) HUGHES NETWORK SYSTEMS, INC. By: /s/ Pradeep Kaul -------------------------------------------- Title: Executive Vice President Address: 10450 Pacific Center Court San Diego, CA 92121 Telecopy No.: (619) 457-4994 47 EXHIBIT A FORM OF NOTE THIS NOTE MAY NOT BE OFFERED OR SOLD, UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE VENDOR CREDIT FINANCING AGREEMENT, DATED AS OF SEPTEMBER ___, 1996, A COPY OF WHICH MAY BE OBTAINED FROM GEOTEK FINANCING CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICE. GUARANTEED SECURED PROMISSORY NOTE $[100,000,000] _____________, 1996 GEOTEK FINANCING CORPORATION, a Delaware corporation (the "Borrower"), promises to pay to HUGHES NETWORK SYSTEMS, INC. (the "Lender"), in immediately available funds, the principal sum of [ONE HUNDRED MILLION] DOLLARS ($[100,000,000]), or such lesser amount as may then constitute the aggregate unpaid principal amount of the Advances made to the Borrower by the Lender pursuant to the Vendor Credit Financing Agreement (as defined below), together with interest thereon at the rates and on the dates specified in Section 2.3 of the Vendor Credit Financing Agreement, dated as of September ___, 1996, by and among the Borrower, the Lender and Geotek Communications, Inc., as Guarantor (as the same may be amended, modified or restated from time to time, the "Vendor Credit Financing Agreement"). Capitalized terms used herein and not otherwise defined herein are used with the meanings attributed to them in the Vendor Credit Financing Agreement. All interest shall be computed for actual days elapsed on the basis of a 365 (or 366, as appropriate)-day year. The obligations of the Borrower under this Note have been unconditionally guaranteed by the Guarantor, as more fully provided in Article VI of the Vendor Credit Financing Agreement. The Borrower hereby authorizes the Lender to endorse on the Schedule annexed to this Note the principal amount of all Advances made by the Lender to the Borrower under the Vendor Credit Financing Agreement as well as all repayments of principal permitted thereunder and all additions to principal made pursuant to Section 2.3(b) thereof; provided, that the failure to make any such notations on such Schedule shall not limit or otherwise affect the obligations of the Borrower under the Vendor Credit Financing Agreement or this Note. 48 This Note is one of the Notes issued pursuant to, and is entitled to the benefits of, the Vendor Credit Financing Agreement, to which Vendor Credit Financing Agreement reference is hereby made for a statement of the terms and conditions under which the Maturity Date of this Note may be accelerated. This Note is subject to optional and mandatory prepayment as provided in the Vendor Credit Financing Agreement. This Note is secured pursuant to the terms of the Pledge Agreement and the Security Agreement and the other Collateral Documents in existence from time to time. This Note is subject to the restrictions on transfer set forth in Section 9.1 of the Vendor Credit Financing Agreement and is entitled to the Registration Rights set forth in Annex A attached to the Vendor Credit Financing Agreement. The Borrower hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. GEOTEK FINANCING CORPORATION By:_______________________________ Title: ___________________________ 49 SCHEDULE OF BORROWINGS OF, ADDITIONS TO AND REPAYMENTS OF PRINCIPAL TO GUARANTEED SECURED PROMISSORY NOTE OF GEOTEK FINANCING CORPORATION DATED ________________, 1996
Amount of Amount of Addition to Amount Unpaid Date Borrowing Principal Repaid Balance - ----------------------------------------------------------------------------- ---------
50 EXHIBIT C FORM OF SECURITY AGREEMENT THIS SECURITY AGREEMENT (this "Security Agreement") is made and entered into as of September __, 1996 by GEOTEK FINANCING CORPORATION, a Delaware corporation, having its principal office at c/o Geotek Communications, Inc., 20 Craig Road, Montvale, NJ 07645 (the "Borrower"), in favor of HUGHES NETWORK SYSTEMS, INC., a Delaware corporation, having an office at 10450 Pacific Center Court, San Diego, CA 92121 ("HNS"), for itself and as collateral agent for the benefit of the Lenders (as defined below) (in such capacity, the "Collateral Agent"). W I T N E S S E T H: WHEREAS, the Borrower, Geotek Communications, Inc., as guarantor (the "Guarantor") and HNS have entered into a Manufacturing Agreement of even date herewith (as amended or otherwise modified from time to time, the "Manufacturing Agreement") pursuant to which the Borrower will purchase from HNS from time to time Base Station Equipment (as described therein); WHEREAS, the Borrower, the Guarantor and HNS (together, with its successors and assigns, referred to collectively as the "Lenders") have entered into a Vendor Credit Financing Agreement of even date herewith (as amended or otherwise modified from time to time, the "Financing Agreement") pursuant to which the Lenders have agreed to make Advances (as defined therein) to the Borrower as evidenced by the Notes (as defined therein) to finance the purchase by the Borrower from HNS of Base Station Equipment pursuant to the Manufacturing Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Financing Agreement; WHEREAS, the Lenders have required, as a condition to their entering into the Financing Agreement, that the Borrower (i) grant to the Collateral Agent a security interest in and to the Collateral (as defined herein) and (ii) execute and deliver this Security Agreement in order to secure the payment and performance by the Borrower of the Obligations. AGREEMENT NOW THEREFORE, in consideration of the premises and in order to induce HNS to make the Advances under the Financing Agreement, the Borrower hereby agrees with the Collateral Agent for its benefit and the ratable benefit of the Lenders as follows: SECTION 1. CREATION OF SECURITY INTEREST. The Borrower hereby grants to the Collateral Agent for its benefit and the ratable benefit of the Lenders a continuing security interest in all of the Borrower's right, title and interest in and to the collateral described in 51 Section 2 hereof (the "Collateral") in order to secure the payment and performance of all Obligations. SECTION 2. COLLATERAL. The Collateral is: (a) All Base Station Equipment (as defined in the Financing Agreement) and other related equipment purchased by the Borrower from HNS utilizing Advances under the Financing Agreement and all Replacement Communications Equipment and Reacquired Base Station Equipment (each as defined in the Financing Agreement), whether purchased on the date hereof or hereafter at any time by the Borrower from HNS and wherever located, including, without limitation, mobile radio infrastructure equipment (which includes, without limitation, remote sector equipment, mini-sector equipment, microsites, sector controllers, power amplifier racks, transceiver racks and antenna box final assemblies (and any wiring, harnesses, incidental equipment and hardware contained in such mobile radio infrastructure equipment)) to be used by the Borrower, the Guarantor, and Geotek Affiliates (as defined in the Manufacturing Agreement, "Geotek Affiliates") and their respective joint-venture partners and participants for the provision of mobile wireless communications services throughout the world or in any network in which the Guarantor or any Geotek Affiliate owns an interest or for any other purpose; (b) all cash substituted by the Borrower for Base Station Equipment as Collateral hereunder pursuant to the provisions of Section 5.12(c) of the Financing Agreement; and (c) all products and proceeds of any of the foregoing including, without limitation, (i) whatever is now or hereafter received by the Borrower upon the sale, exchange, collection or other disposition of any item of Collateral, whether such proceeds constitute inventory, accounts, accounts receivable, general intangibles, instruments, securities (including, without limitation, United States of America Treasury Bills), credits, claims, demands, documents, letters of credit and letter of credit proceeds, chattel paper, documents of title, certificates of title, certificates of deposit, warehouse receipts, bills of lading, leases, deposit accounts, money, tax refund claims, contract rights, goods, equipment, machinery or computers and related equipment, (ii) any such items which are now or hereafter acquired by the Borrower with any proceeds of Collateral hereunder and (iii) any insurance now or hereafter payable by reason of loss or damage to any item of Collateral or any proceeds thereof. SECTION 3. THE BORROWER'S REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to the Collateral Agent and the Lenders as follows: (a) Location of Chief Executive Office. The Borrower's chief executive office is located at c/o Geotek Communications, Inc., 20 Craig Road, Montvale, NJ 07645. (b) Perfection and Priority of Security Interest. With respect to Collateral constituting Base Station Equipment to be located in a jurisdiction subject to the Uniform Commercial Code, upon (i) the delivery (or redelivery, as contemplated by Section 5.12(c) of the Financing 2 52 Agreement) to the Borrower of such Collateral, (ii) the filing of Uniform Commercial Code financing statements naming the Collateral Agent as secured party and the Borrower as debtor with respect to such Collateral in the appropriate filing office(s) in such jurisdiction, and (iii) if applicable, compliance by the Collateral Agent with the provisions of Section 9-312(c) of the applicable Uniform Commercial Code relating to notice to the holders of conflicting security interests in the Collateral, if any (it being understood by the Borrower that such conflicting security interests may not be permitted hereunder or under the Financing Agreement and may result in an Event of Default hereunder), the Collateral Agent shall have, for its benefit and the ratable benefit of the Lenders, a fully-enforceable valid and perfected first-priority security interest in such Collateral, securing the payment of the Obligations. (c) No Consents or Filings. Except for those obtained prior to the date hereof, no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the grant of the security interest by the Borrower in the Collateral pursuant to this Security Agreement or for the execution, delivery or performance of this Security Agreement by the Borrower. (d) Authority. The Borrower has full power and authority to enter into this Security Agreement and to grant a security interest in the Collateral as provided by this Security Agreement. (e) Enforceable Obligation. This Security Agreement has been duly authorized, executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights generally or general principles of equity (whether considered at law or in equity). (f) No Conflict, etc. The execution, delivery and performance of this Security Agreement by the Borrower and the consummation of the transactions contemplated hereby will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any agreement, indenture, mortgage, deed of trust, equipment lease, instrument or other document to which the Borrower, the Guarantor or any of their respective Subsidiaries is a party. (g) Purchase Money Security Interest. The security interest granted to the Collateral Agent in Collateral comprised of Base Station Equipment (other than Base Station Equipment sold and reacquired by the Borrower as contemplated by Section 5.12(c) of the Financing Agreement) pursuant to this Security Agreement constitutes a "purchase money security interest" as defined in the Uniform Commercial Code in effect on the date hereof in the State of New York (without giving effect to any disposition and reacquisition of such Base Station Equipment as contemplated by Section 5.12 of the Financing Agreement. 3 53 SECTION 4. COVENANTS OF THE BORROWER. During the term of this Security Agreement, unless the Collateral Agent shall otherwise consent in writing: (a) Adverse Claims. The Borrower will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein unless both the Collateral Agent and the Borrower determine that the claim or demand is not material and that, consequently, such defense would not be consistent with good business judgment. The Borrower will not permit any notice of any Lien with respect to the Collateral or any portion thereof to exist or be on file in any public office, except for Permitted Liens not otherwise waived or released in connection with the Financing Agreement. (b) Changes Affecting Collateral. The Borrower will not (i) change the location of its chief executive office from that listed in Section 3(a) hereof; (ii) move or permit movement of any Collateral from the county or other jurisdiction specified by the Borrower pursuant to Section 3.2(i)(b) or 3.2(iii)(a), as applicable, of the Financing Agreement with respect to such Collateral or (iii) voluntarily or involuntarily change its identity or corporate structure, unless in each case the Borrower shall have given the Collateral Agent thirty (30) days prior written notice thereof and shall have in advance executed and caused to be filed and/or delivered to the Collateral Agent any financing statements or other documents required by the Collateral Agent to maintain its fully-enforceable valid and perfected first-priority security interest in all Collateral in accordance with Section 4(c) hereof, all in form and substance satisfactory to the Collateral Agent. (c) Further Assurances. The Borrower will, promptly upon request by the Collateral Agent, execute and deliver or procure any document, give any notices, execute and file any financing statements, mortgages or other documents, all in form and substance reasonably satisfactory to the Collateral Agent, mark any chattel paper, deliver any chattel paper or instruments to the Collateral Agent and take any other actions that are necessary or, in the opinion of the Collateral Agent, desirable to perfect or continue the perfection and the first-priority of the Collateral Agent's security interest in the Collateral, to protect the Collateral against the rights, claims or interests of third persons or to effect the purposes of this Security Agreement. The Borrower will pay all actual out-of-pocket costs and expenses incurred in connection with any of the foregoing. (d) Liens; Dispositions. Without the prior written consent of the Collateral Agent, the Borrower will not in any way hypothecate or create or permit to exist any Lien, security interest, charge or encumbrance on or other interest in the Collateral, except for Permitted Liens not otherwise waived or released in connection with the Financing Agreement, and the Borrower will not sell, transfer, assign, pledge, collaterally assign, exchange or otherwise dispose of the Collateral, except as expressly permitted by the Financing Agreement (including Section 5.12 thereof) and this Security Agreement. If the proceeds of any such sale are notes, instruments, documents of title, letters of credit or chattel paper, such proceeds shall be promptly delivered to the Collateral Agent to be held as Collateral hereunder. If the Collateral, or any part thereof, is sold, transferred, assigned, exchanged, or otherwise disposed of in violation of these provisions, the security interest of the Collateral Agent shall continue in such Collateral or part 4 54 thereof notwithstanding such sale, transfer, assignment, exchange or other disposition, and the Borrower will hold the proceeds thereof in a separate account for the benefit of the Collateral Agent and the Lenders. Following such a sale, the Borrower will transfer such proceeds to the Collateral Agent in kind. (e) Contractual Obligations. Except as expressly contemplated by the Financing Documents, the Borrower will not enter into any contractual obligations which may restrict or inhibit the Collateral Agent's legal rights to sell or otherwise dispose of the Collateral or any part thereof after the occurrence of an Event of Default (as hereinafter defined). (f) Protection of Security Interest. Upon the occurrence and during the continuance of an Event of Default (as hereinafter defined), the Collateral Agent shall have the right at any time to do any acts the Collateral Agent may deem necessary to protect its security interest in the Collateral, including, without limitation, the rights to pay, purchase, contest or compromise any encumbrance, charge or Lien which, in the judgment of the Collateral Agent, appears to be prior to or superior to the security interest granted hereunder, and appear in and defend any action or proceeding purporting to affect its security interest in, and/or the value of, the Collateral. Without limiting the generality of Section 9.7 of the Financing Agreement, the Borrower hereby agrees to reimburse the Collateral Agent for all payments made and expenses incurred under this Security Agreement including fees, expenses and disbursements of attorneys and paralegals (including the allocated costs of inside counsel) acting for the Collateral Agent, including any of the foregoing payments under or acts taken to protect its security interest in the Collateral, which amounts shall be secured under this Security Agreement, and agrees that it shall be bound by any payment made or act taken by the Collateral Agent hereunder absent the Collateral Agent's gross negligence or willful misconduct. The Collateral Agent shall have no obligation to make any of the foregoing payments or perform any of the foregoing acts. (g) Taxes. The Borrower shall pay and discharge all taxes, assessments and charges or levies against the Collateral prior to delinquency thereof, and shall keep the Collateral free of all unpaid taxes, assessments and charges (other than to the extent such unpaid taxes, assessments and charges constitute Permitted Liens). (h) Insurance. The Borrower, at its own expense, shall have and maintain, or cause to be maintained, insurance at all times with respect to all Collateral against such risks and liabilities, with such carriers and in such amounts as the Collateral Agent may reasonably require. Such insurance shall be payable to the Collateral Agent and to the Borrower as their interests may appear, shall include a loss payee endorsement, and shall not be subject to cancellation or reduction in coverage without thirty (30) days' prior written notice to the Collateral Agent. The Borrower shall supply evidence of such insurance to the Collateral Agent upon request. (i) Inspection. The Collateral Agent shall have, at all times, with reasonable prior notice (except after the occurrence and during the continuance of an Event of Default (as hereinafter defined), when no notice shall be required, the right to enter into and upon any premises where any of the Collateral or records with respect thereto are located for the purpose 5 55 of inspecting the same, performing an audit, making copies of records, observing the use of any part of the Collateral, protecting the Collateral Agent's security interest in the Collateral, or otherwise determining whether the Borrower is in compliance with the terms of this Security Agreement. (j) Priority. The Borrower, at its own expense, will provide the Collateral Agent with all information, filings and other documentation and cooperation necessary to enable the Collateral Agent to comply with the provisions of Section 9-312 of the applicable Uniform Commercial Code in order to preserve the priority of the Collateral Agent's purchase money security interest in the Collateral against the holders of conflicting security interests in such Collateral, if any, it being understood by the Borrower that such conflicting security interests may not be permitted hereunder or under the Financing Agreement and may result in an Event of Default hereunder. SECTION 5. EVENTS OF DEFAULT. The occurrence of any Default (as defined in the Financing Agreement) shall constitute an event of default ("Event of Default") under this Security Agreement. SECTION 6. REMEDIES UPON AN EVENT OF DEFAULT. Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may, in addition to the remedies provided for in Article VIII of the Financing Agreement, without notice to or demand upon the Borrower, do any one or more of the following: (a) Exercise any or all of the rights and remedies provided for by the applicable Uniform Commercial Code, specifically including, without limitation, the right to recover the fees and expenses incurred by the Collateral Agent in the enforcement of this Security Agreement or in connection with the Borrower's redemption of the Collateral, including fees, expenses and disbursements of attorneys and paralegals (including the allocated costs of inside counsel). (b) Require the Borrower to assemble the Collateral or any part thereof and make it available at one or more places as the Collateral Agent may reasonably designate and to deliver possession of the Collateral or any part thereof to the Collateral Agent, who shall have full right to enter upon any or all of the Borrower's premises and property to exercise the Collateral Agent's rights hereunder. (c) Use, manage, operate and control the Collateral in order to preserve such Collateral or its value, including, without limitation, the rights to take possession of all of the Collateral, to exclude any third parties, whether or not claiming under the Borrower, from the Borrower's premises and property, to make repairs, replacements, alterations, additions and improvements to the Collateral, and to dispose of all or any portion of the Collateral in the ordinary course of the Borrower's business. 6 56 (d) Use (and assign or license such right to use), in connection with any repair, replacement, alteration, addition, improvement, assembly, use, sale or disposition of the Collateral, any intellectual property (including, without limitation, patents, copyrights, trademarks and service marks) or other technical knowledge or process used or utilized from time to time by the Borrower or within the power of the Borrower to license or sublicense. (e) Enforce one or more remedies hereunder, successively or concurrently, and such action shall not operate to estop or prevent the Collateral Agent from pursuing any other or further remedy which it may have, and any repossession or retaking or sale of the Collateral pursuant to the terms hereof shall not operate to release the Borrower from its obligations hereunder. (f) In connection with any public or private sale under the applicable Uniform Commercial Code (or the equivalent with respect to a jurisdiction not subject to the Uniform Commercial Code), the Collateral Agent shall give the Borrower at least fifteen (15) days' prior written notice of the time and place of any public sale of the Collateral or of the time after which any private sale or other intended disposition thereof may be made, which shall be deemed to be reasonable notice of such sale or other disposition. Such notice may be given to the Borrower in accordance with the provisions of Section 11.1 hereof. (g) Proceed by an action or actions at law or in equity to foreclose this Security Agreement and sell the Collateral, or any portion thereof, pursuant to a judgment or decree of a court or courts of competent jurisdiction. (h) If the Collateral Agent recovers possession of all or any part of the Collateral pursuant to a writ of possession or other judicial process, whether prejudgment or otherwise, the Collateral Agent may thereafter retain, sell or otherwise dispose of such Collateral in accordance with this Security Agreement or the applicable Uniform Commercial Code, and following such retention, sale or other disposition, the Collateral Agent may voluntarily dismiss without prejudice the judicial action in which such writ of possession or other judicial process was issued. The Borrower hereby consents to the voluntary dismissal by the Collateral Agent of such judicial action, and the Borrower further consents to the exoneration of any bond that the Collateral Agent files in such action. SECTION 7. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and powers granted to the Collateral Agent hereunder are being granted in order to preserve and protect the Collateral Agent's security interest in and to the Collateral granted hereby and shall not be interpreted to, and shall not, impose any duties on the Collateral Agent in connection therewith other than such duties as may be imposed by Article 9 of the Uniform Commercial Code and other applicable laws and not expressly and validly waived hereunder. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, it being understood that the Collateral Agent shall not have any responsibility for (i) ascertaining or taking action with respect to any matters relative to any Collateral, whether or not the Collateral Agent has or is deemed to have 7 57 knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Collateral. SECTION 8. SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Borrower hereunder, shall be absolute and unconditional irrespective of, and unaffected by: (a) any lack of validity or enforceability of any Facility Document; (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from any Facility Document; (c) any exchange, surrender, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations; or (d) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Borrower in respect of the Obligations or of this Security Agreement. SECTION 9. DISTRIBUTION OF PROCEEDS UPON EVENT OF DEFAULT. Upon the sale or other disposition of any Collateral pursuant to Section 6 hereof, the proceeds of such sale or other disposition shall be applied by the Collateral Agent in the following order of priority: (a) first, to the reasonable out-of-pocket costs and expenses of the Collateral Agent incurred in connection with the performance of its duties under this Security Agreement; (b) second, to the Lenders pro rata based on their respective Proportionate Shares until payment in full of all Obligations; and (c) third, delivered to the Borrower. For the avoidance of doubt, none of the proceeds of such sale or other disposition shall be distributed to the Lenders pursuant to Section 9(b) hereof until the Collateral Agent has received full payment for all expenses incurred by it in connection with the performance of its duties under this Security Agreement and none of the proceeds of such sale or other disposition shall be distributed to the Borrower under Section 9(c) hereof until all of the Obligations have been paid in full. SECTION 10. THE COLLATERAL AGENT AS THE LENDERS' CONTRACTUAL REPRESENTATIVE. SECTION 10.1. Appointment of Collateral Agent. Each Lender hereby designates HNS as Collateral Agent to act as herein specified. Each Lender hereby irrevocably authorizes the 8 58 Collateral Agent to take such action on its behalf under the provisions of this Security Agreement and any other instruments and agreements referred to herein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Collateral Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Collateral Agent shall hold all Collateral and proceeds from the Collateral for the benefit of itself and the Lenders to be distributed as provided herein. The Collateral Agent may perform any of its duties hereunder by or through its agents or employees. SECTION 10.2. Nature of Duties of Collateral Agent. The Collateral Agent shall have no duties or responsibilities except those expressly set forth in this Security Agreement. Neither the Collateral Agent nor any of its officers, directors, employees or agents shall be liable to the Lenders for any action taken or omitted by it as such hereunder or in connection herewith, unless caused by its or their gross negligence or willful misconduct. The duties of the Collateral Agent shall be mechanical and administrative in nature, and the Collateral Agent shall not have by reason of this Security Agreement a fiduciary relationship in respect of any Lender. SECTION 10.3. Lack of Reliance on Collateral Agent. The Collateral Agent shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Security Agreement, the Financing Agreement or the Notes or the existence or possible existence of any Event of Default, unless any Lender specifically requests the Collateral Agent to do so in writing. SECTION 10.4. Certain Rights of the Collateral Agent. The Collateral Agent shall have the right to request instructions from the Majority Lenders at any time. If the Collateral Agent shall request instructions from the Majority Lenders with respect to any act or action (including the failure to act) in connection with this Security Agreement, the Collateral Agent shall be entitled to refrain from such act or taking such action unless and until the Collateral Agent shall have received instructions from the Majority Lenders, and the Collateral Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Collateral Agent as a result of the Collateral Agent acting or refraining from acting hereunder in accordance with the instructions of the Majority Lenders. SECTION 10.5. Reliance by Collateral Agent. The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other documentary, teletransmission or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. The Collateral Agent may consult with legal counsel (including counsel for the Borrower with respect to matters concerning the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 10.6. Indemnification of Collateral Agent. To the extent the Collateral Agent is not reimbursed and indemnified by the Borrower, each Lender will reimburse and indemnify 9 59 the Collateral Agent for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in performing its duties hereunder, in any way relating to or arising out of this Security Agreement, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Collateral Agent's gross negligence or willful misconduct. SECTION 10.7. The Collateral Agent in its Individual Capacity . With respect to its obligation as a Lender under this Security Agreement, the Collateral Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it was not performing the duties specified herein; and the term "Lenders" or any similar term shall, unless the context clearly otherwise indicates, include the Collateral Agent in its individual capacity as a Lender. The Lenders acknowledge that HNS is the seller of the Base Station Equipment to the Borrower and has engaged in certain other business transactions with the Borrower and other Geotek Affiliates and agree that the Collateral Agent may lend money to, acquire equity interests in, and generally engage in any kind of financial advisory or other business with the Borrower or any other Geotek Affiliate as if it were not performing the duties specified herein, and may accept fees and other consideration from the Borrower for services in connection with this Security Agreement and otherwise without having to account for the same to the Lenders. SECTION 10.8. Successor Collateral Agent. (a) The Collateral Agent may, upon five (5) Business Days' notice to the Lenders and the Borrower, resign at any time (effective upon the appointment of a successor collateral agent pursuant to the provisions of this Section 10.8) by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation, the Majority Lenders shall have the right, upon five (5) days' notice and approval by the Borrower (which approval shall not be unreasonably withheld), to appoint a successor collateral agent. If no successor collateral agent (i) shall have been so appointed by the Majority Lenders, and (ii) shall have accepted such appointment, within thirty (30) days after the Collateral Agent's giving of notice of resignation, then, upon five (5) days' notice, the Collateral Agent may, on behalf of the Lenders, appoint a successor collateral agent. (b) Upon the acceptance of any appointment as collateral agent hereunder by a successor collateral agent, such successor collateral agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Collateral Agent, all references in this Security Agreement to "Collateral Agent" shall refer to such successor collateral agent and the Collateral Agent shall be discharged from its duties and obligations under this Security Agreement. After the Collateral Agent's resignation hereunder as collateral agent, the provisions of Section 10 hereof shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Security Agreement. 10 60 (c) In the event of a material breach by the Collateral Agent of its duties hereunder, the Collateral Agent may be removed by the Majority Lenders for cause and the provisions of this Section 10.8 shall apply to the appointment of a successor collateral agent. SECTION 10.9. Collateral Matters. (a) The Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of Default, to take any action with respect to any Collateral which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral. (b) The Lenders hereby authorize the Collateral Agent to, and the Collateral Agent shall, release any Lien granted to or held by the Collateral Agent upon any Collateral (i) upon the payment and satisfaction of all of the Obligations, (ii) constituting property being sold or disposed of in conformance with the requirements of the Financing Agreement and this Security Agreement (provided that the proceeds of such sale are applied or pledged as required therein and herein) or (iii) if approved, authorized or ratified in writing by the Majority Lenders. Upon request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral Agent's authority to release particular types or items of Collateral pursuant to this Section 10.9. (c) Upon any sale and transfer of Collateral which is expressly permitted pursuant to the terms of the Financing Agreement or this Security Agreement or consented to in writing by the Majority Lenders, and upon at least five (5) Business Days' prior written request by the Borrower, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent for its benefit and the benefit of the Lenders herein or pursuant hereto upon the Collateral that was sold or transferred; provided that (i) the Collateral Agent shall not be required to execute any such document on terms which, in the Collateral Agent's opinion, would expose the Collateral Agent or the Lenders to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon all interests retained by the Borrower, including (without limitation) the proceeds of the sale, all of which shall continue to constitute part of the Collateral. In the event of any sale or transfer of Collateral, or any foreclosure with respect to any of the Collateral, the Collateral Agent shall be authorized to deduct all of the expenses reasonably incurred by the Collateral Agent from the proceeds of any such sale, transfer or foreclosure. (d) The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Collateral exists or is owned by the Borrower or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising 11 61 at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 10.9, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent's own interest in the Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct. SECTION 10.10. Actions with Respect to Events of Default. The Collateral Agent shall take such action with respect to an Event of Default as shall be directed by the Majority Lenders; provided that until the Collateral Agent shall have received such directions, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable and in the best interests of the Lenders. Any amendment or waiver of any provision of this Security Agreement and any consent to any departure by the Borrower from any provision of this Security Agreement shall be effected by the Collateral Agent pursuant to Section 11.4 hereof and only upon the written authorization of the Majority Lenders. SECTION 10.11. Delivery of Information. The Collateral Agent shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Collateral Agent from the Borrower, the Majority Lenders, any Lender or any other Person under or in connection with this Security Agreement except (i) as specifically provided in this Security Agreement and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of the Collateral Agent at the time of receipt of such request and then only in accordance with such specific request. SECTION 11. MISCELLANEOUS PROVISIONS. SECTION 11.1. Notices. All notices, approvals, consents or other communications required or desired to be given hereunder shall be in the form and manner, and delivered to each of the parties hereto at their respective addresses, set forth in Article X of the Financing Agreement or Article XI of the Loan Agreement, as applicable. SECTION 11.2. Headings. Section headings in this Security Agreement are for convenience of reference only, and shall not govern the interpretation of any of the provisions of this Security Agreement. SECTION 11.3. Severability. Any provision in this Security Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that 12 62 jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Security Agreement are declared to be severable. SECTION 11.4. Amendments, Waivers and Consents. No delay or omission of the Collateral Agent to exercise any right under this Security Agreement shall impair such right or be construed to be a waiver of any Event of Default or an acquiescence therein. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right and no waiver, amendment or other variation of the terms, conditions or provisions of this Security Agreement whatsoever shall be valid unless in writing signed by the Collateral Agent, and then only to the extent in such writing specifically set forth. All remedies contained in this Security Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent, for the benefit of the Lenders, until the Obligations have been paid in full. SECTION 11.5. Interpretation of Agreement. Time is of the essence in each provision of this Security Agreement of which time is an element. All terms not defined herein or in the Financing Agreement shall have the meaning set forth in the applicable Uniform Commercial Code, except where the context otherwise requires. To the extent a term or provision of this Security Agreement conflicts with the Financing Agreement and is not dealt with herein with more specificity, the Financing Agreement shall control with respect to the subject matter of such term or provision. Acceptance of or acquiescence in a course of performance rendered under this Security Agreement shall not be relevant in determining the meaning of this Security Agreement even though the accepting or acquiescing party had knowledge of the nature of the performance and opportunity for objection. SECTION 11.6. Continuing Security Interest; Transfer of Notes. This Security Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until payment in full of the Obligations, (ii) be binding upon the Borrower, its successors and assigns, and (iii) inure to the benefit of the Collateral Agent, the Lenders and their respective successors, transferees and assigns. Without limiting the generality of clause (iii), above, any Lender may, except as limited by the express terms of the Financing Agreement or the Notes, assign or otherwise transfer any Note held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise. SECTION 11.7. Reinstatement. To the extent permitted by law, this Security Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any amount received by the Collateral Agent or any Lender in respect of the Obligations is rescinded or must otherwise be restored or returned by such Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower or upon the appointment of any receiver, intervenor, conservator, trustee or similar official for the Borrower or any substantial part of its assets, or otherwise, all as though such payments had not been made. SECTION 11.8. Survival of Provisions. All representations, warranties and covenants of the Borrower contained herein shall survive the execution and delivery of this Security 13 63 Agreement, and shall terminate only upon the full and final payment and performance by the Borrower of the Obligations secured hereby. SECTION 11.9. Power of Attorney. The Borrower hereby irrevocably appoints and constitutes the Collateral Agent, or any Person or agent the Collateral Agent may designate, as the Borrower's attorney-in-fact to exercise all of the following powers upon the occurrence and during the continuance of an Event of Default (as defined in Section 5 hereof): (i) collection of proceeds of any Collateral; (ii) conveyance of any item of Collateral to any purchaser thereof; (iii) giving of any notices or recording of any Liens hereunder; (iv) making of any payments or taking any acts hereunder and (v) paying or discharging taxes or Liens levied or placed upon or threatened against the Collateral, the legality or validity thereof and the amounts necessary to discharge the same to be determined by the Collateral Agent in its sole discretion, and such payments made by the Collateral Agent to become the obligations of the Borrower to the Collateral Agent, due and payable immediately without demand. The Collateral Agent's authority hereunder shall include, without limitation, the authority to endorse and negotiate, for the Collateral Agent's own account, any checks or instruments in the name of the Borrower, execute and give receipt for any certificate of ownership or any document, transfer title to any item of Collateral, sign the Borrower's name on all financing statements or any other documents deemed necessary or appropriate to preserve, protect or perfect the security interest in the Collateral and to file the same, prepare, file and sign the Borrower's name on any notice of Lien, and prepare, file and sign the Borrower's name on a proof of claim in bankruptcy or similar document against any creditor of the Borrower, and to take any other actions arising from or incident to the powers granted to the Collateral Agent in this Security Agreement. This power of attorney is coupled with an interest and is irrevocable by the Borrower. SECTION 11.10. Authority of the Collateral Agent; Indemnification. The Collateral Agent shall have and be entitled to exercise all powers hereunder which are specifically granted to the Collateral Agent by the terms hereof, together with such powers as are reasonably incident thereto. The Collateral Agent may perform any of its duties hereunder or in connection with the Collateral by or through agents or employees and shall be entitled to retain counsel and to act in reliance upon the advice of counsel concerning all such matters. Neither the Collateral Agent nor any Lender, nor any director, officer, employee, attorney or agent of the Collateral Agent or any Lender shall be liable to the Borrower for any action taken or omitted to be taken by it or them hereunder, except for its or their own gross negligence or willful misconduct, nor shall the Collateral Agent be responsible for the validity, effectiveness or sufficiency of this Security Agreement or of any document or security furnished pursuant hereto. The Collateral Agent and its directors, officers, employees, attorneys and agents shall be entitled to rely on any communication, instrument or document reasonably believed by it or them to be genuine and correct and to have been signed or sent by the proper Person or Persons. The Borrower agrees to indemnify and hold harmless the Collateral Agent and its officers, directors, employees and agents from and against any and all costs, expenses (including reasonable fees, expenses and disbursements of attorneys and paralegals), claims and liabilities incurred by the Collateral Agent (in its capacity as Collateral Agent) or such officers, directors, employees and agents (in each case in their capacity as such) hereunder as a result of the Borrower's actions, breach or assertion of a defense hereunder or under the other Financing Documents, unless such claim or 14 64 liability shall be due to willful misconduct or gross negligence on the part of the Collateral Agent or such Person, as applicable. SECTION 11.11. Release; Termination of Agreement. Subject to the provisions of Section 11.8 hereof, this Security Agreement shall terminate upon full and final payment and performance of all the Obligations. At such time, the Collateral Agent shall, at the request and expense of the Borrower, promptly reassign and redeliver to the Borrower all of the Collateral hereunder which has not been sold, disposed of, retained or applied by the Collateral Agent, for its benefit and the benefit of the Lenders, in accordance with the terms hereof. Such reassignment and redelivery shall be without warranty by or recourse to the Collateral Agent, except as to the absence of any prior assignments by the Collateral Agent of its interest in the Collateral, and shall be at the expense of the Borrower. SECTION 11.12. Counterparts. This Security Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Security Agreement by signing any such counterpart. SECTION 11.13. SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER AND THE GUARANTOR EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS SECURITY AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED PURSUANT HERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT OR ANY OF THE LENDERS TO COMMENCE LEGAL PROCEEDINGS AGAINST THE BORROWER OR ITS PROPERTY IN ANY OTHER JURISDICTION; 15 65 (e) WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY OF THE LENDERS OF THEIR RIGHTS FROM AND AFTER AN EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL. THE BORROWER WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY OF THE LENDERS IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL, TO ENFORCE ANY JUDGMENT OR OTHER SECURITY FOR THE OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION, THIS SECURITY AGREEMENT, OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE BORROWER AND ANY SUCH PARTY. (f) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO, SUCH ACTION OR PROCEEDING; AND (g) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT. SECTION 11.14. JURY TRIAL. THE BORROWER, THE COLLATERAL AGENT AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 11.15. GOVERNING LAW. THIS SECURITY AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. [SIGNATURE PAGE FOLLOWS] 16 66 IN WITNESS WHEREOF, the undersigned has caused this Security Agreement to be duly executed and delivered as of the day and year first above written. Borrower: GEOTEK FINANCING CORPORATION By: -------------------------------------- Title: ----------------------------------- Address: c/o Geotek Communications, Inc. 20 Craig Road Montvale, NJ 07645 Telecopy No.: (201) 930-9614 Collateral Agent: HUGHES NETWORK SYSTEMS, INC., as Collateral Agent By: -------------------------------------- Title: ----------------------------------- Address: 10450 Pacific Center Court San Diego, CA 92121 Telecopy No.: (619) 457-4994 With respect to Section 10 only: Lender HUGHES NETWORK SYSTEMS, INC. By: -------------------------------------- Title: ----------------------------------- Address: 10450 Pacific Center Court San Diego, CA 92121 Telecopy No.: (619) 457-4994 EX-99.V 6 AMENDED & RESTATED BORROWER PLEDGE AGREEMENT 1 EXHIBIT V [EXECUTION COPY] AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT THIS AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT (this "Agreement") is made and entered into as of September 27, 1996 by GEOTEK FINANCING CORPORATION, a Delaware corporation, having its principal office at c/o Geotek Communications, Inc., 20 Craig Road, Montvale, NJ 07645 (the "Pledgor"), in favor of HUGHES NETWORK SYSTEMS, INC., a Delaware corporation, having an office at 10450 Pacific Center Court, San Diego, CA 92121 ("HNS"), for itself and as collateral agent for the benefit of the Lenders (as defined below) (in such capacity, the "Collateral Agent") and AMENDS AND RESTATES IN FULL the Borrower Pledge Agreement dated as of December 21, 1995, among the Pledgor and HNS, as lender (HNS, together with its successors and assigns, referred to collectively as the "Loan Agreement Lenders") (the "Original Pledge Agreement"). W I T N E S S E T H: WHEREAS, the Pledgor, Geotek Communications, Inc., as guarantor (the "Guarantor") and HNS (HNS, together with its successors and assigns and the other Lenders described in the Financing Agreement referred to collectively as the "Financing Agreement Lenders" and, together with the Loan Agreement Lenders, referred to collectively as the "Lenders") have entered into a Vendor Credit Financing Agreement of even date herewith (as amended or otherwise modified from time to time, the "Financing Agreement") pursuant to which the Financing Agreement Lenders have agreed to make Advances (as defined therein) to the Pledgor as evidenced by the Notes (as defined therein). Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Financing Agreement; WHEREAS, pursuant to the Original Pledge Agreement, the Pledgor pledged to the Loan Agreement Lenders all of the Pledgor's right, title and interest in and to the outstanding shares of stock set forth on Schedule I hereto (the "Pledged Shares") and those certain inter-company promissory notes in favor of the Pledgor set forth on Schedule II hereto (the "Pledged Notes" and, together with the Pledged Shares, the "Pledged Securities") as collateral for all obligations of the Pledgor (the "Loan Agreement Obligations") under that certain Loan Agreement, dated as of December 21, 1996 (the "Loan Agreement"), among the Pledgor, the Guarantor and HNS, as evidenced by the promissory notes executed and delivered to any Loan Agreement Lender by the Pledgor in connection with the Loan Agreement (the "Loan Agreement Notes" and, together with the Notes, the "Secured Notes"); WHEREAS, the Financing Agreement Lenders have required, as a condition to their entering into the Financing Agreement, that the Pledgor grant to the Collateral Agent, for its benefit and the ratable benefit of the Financing Agreement Lenders, a security interest in the Pledged Securities to secure the Obligations, such security interest to be shared equally and ratably with the Loan Agreement Lenders; and 2 WHEREAS, the Loan Agreement Lenders are willing to share their security interest in the Pledged Securities equally and ratably with the Financing Agreement Lenders. AGREEMENT NOW THEREFORE, in consideration of the premises and in order to induce the Financing Agreement Lenders to make the Advances under the Financing Agreement and the Loan Agreement Lenders to make the loans under the Loan Agreement, the Pledgor hereby agrees with the Collateral Agent as follows: SECTION 1. PLEDGE. The Pledgor hereby pledges to the Collateral Agent, for its benefit and the ratable benefit of the Lenders, and grants to the Collateral Agent, for its benefit and the ratable benefit of the Lenders, a continuing first priority perfected security interest in, the following (the "Pledged Collateral"): (a) the Pledged Shares and the certificates representing the Pledged Shares, and all products and proceeds of any of the Pledged Shares including, without limitation, all dividends, cash, instruments, subscriptions, warrants and any other rights and options and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Shares; and (b) all additional shares of stock of, or equity interests in, Holdings from time to time acquired by the Pledgor in any manner, and the certificates representing such additional shares (any such additional shares shall constitute part of the Pledged Shares under and as defined in this Agreement), and all products and proceeds of any of such additional Pledged Shares, including, without limitation, all dividends, cash, instruments, subscriptions, warrants and any other rights and options and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such additional Pledged Shares; and (c) the Pledged Notes and the instruments representing the Pledged Notes, and all products and proceeds of the Pledged Notes, including, without limitation, all interest and principal payments, instruments, and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for the Pledged Notes; and (d) all additional promissory notes of Holdings from time to time held by the Pledgor in any manner, and the instruments representing such additional promissory notes (any such additional promissory notes shall constitute part of the Pledged Notes under and as defined in this Agreement) and all products and proceeds of any such additional promissory notes, including, without limitation, all interest and principal payments, instruments, and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any such additional promissory notes; and 2 3 (e) all other claims of any kind or nature and any instruments, certificates, chattel paper or other writings evidencing such claims, whether in contract or tort and whether arising by operation of law, consensual agreement or otherwise, at any time acquired by the Pledgor against any Subsidiary of the Pledgor. SECTION 2. SECURITY FOR SECURED OBLIGATIONS. This Agreement secures the payment of all of the Obligations and the Loan Agreement Obligations (collectively, the "Secured Obligations"), whether for principal, interest, fees, expenses or otherwise, and all obligations of the Pledgor now or hereafter existing under this Agreement (including, without limitation, all expenses as set forth under Section 16 hereof), any of the Loan Documents (as defined by the Loan Agreement, the "Loan Documents") or any of the Financing Documents (the Secured Obligations and all such obligations of the Pledgor now or hereafter existing under this Agreement being referred to herein as the "Liabilities"). SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by the Collateral Agent, for its benefit and the ratable benefit of the Lenders, pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent. SECTION 4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants as follows: (a) The Pledged Shares have been duly authorized and validly issued and are fully paid and non-assessable. The Pledged Notes have been duly authorized and executed by Holdings and constitute the legal, valid and binding obligations of Holdings. (b) The Pledgor is the legal and beneficial owner of the Pledged Collateral, free and clear of any Lien on the Pledged Collateral, except as expressly permitted in the Loan Agreement and the Financing Agreement. (c) (i) Upon the delivery to the Collateral Agent of the Pledged Collateral, the pledge of the Pledged Collateral pursuant to this Agreement creates in favor of the Collateral Agent, for its benefit and the ratable benefit of the Lenders, a valid and perfected first priority security interest in such Pledged Collateral securing the payment of the Liabilities and (ii) the valid and perfected first priority status of the pledge by the Pledgor of the Pledged Collateral pursuant to the Original Pledge Agreement shall continue uninterrupted and unaffected. (d) Except as otherwise provided in Sections 14 and 15 hereof and except for those obtained prior to the date hereof, no authorization, approval, or other action by, and no notice to or filing with, any governmental authority or regulatory body is required either (i) for the pledge by the Pledgor of the Pledged Collateral pursuant to this Agreement or for 3 4 the execution, delivery or performance of this Agreement by the Pledgor or (ii) for the exercise by the Collateral Agent, for its benefit and the ratable benefit of the Lenders, of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement. (e) The Pledgor has full power and authority to enter into this Agreement and has the right to vote, pledge and grant a security interest in the Pledged Shares and to pledge and grant a security interest in the Pledged Notes as provided by this Agreement. (f) This Agreement has been duly authorized, executed and delivered by the Pledgor and constitutes a legal, valid and binding obligation of the Pledgor, enforceable against the Pledgor in accordance with its terms, except as such enforceability may be limited by the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws affecting creditors' rights generally or general principles of equity (whether considered at law or in equity). (g) The Pledged Shares constitute, as of the date hereof, all of the outstanding shares of Capital Stock and voting securities of Holdings beneficially owned by the Pledgor. (h) The Pledged Notes listed on Schedule II hereto constitute the only promissory notes of Holdings in favor of the Pledgor as of the date hereof. (i) Except for the Pledged Securities, there are no other instruments, certificates, securities or other writings, or any chattel paper, evidencing or representing any interest in or claim against Holdings or any subsidiary of Holdings, other than the guarantee given by Holdings pursuant to the 1995 Indenture, as permitted by the Loan Agreement. SECTION 5. FURTHER ASSISTANCE. The Pledgor agrees that at any time and from time to time, at the expense of the Pledgor, the Pledgor will promptly execute and deliver, or cause to be executed and delivered, all stock powers, note powers, proxies, assignments, instruments and documents and take all further action, that is reasonably necessary, at the Collateral Agent's request, in order to perfect any security interest granted or purported to be granted hereby or to enable the Collateral Agent, for its benefit and the ratable benefit of the Lenders, to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral and to carry out the provisions and purposes hereof. SECTION 6. VOTING RIGHTS; DIVIDENDS; ETC. (a) Notwithstanding the pledge of the Pledged Shares set forth in Section 1 hereof, so long as no Default as defined in the Loan Agreement (a "Loan Agreement Default") or Default as defined in the Financing Agreement (a "Financing Agreement Default" and, any Financing Agreement Default or Loan Agreement Default being referred to collectively herein as a "Default") shall have occurred and be continuing, the Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Pledged Shares 4 5 or any part thereof for any purpose not inconsistent with the terms of this Agreement, any of the Loan Documents or any of the Financing Documents; provided, however, that the Pledgor shall not exercise or shall refrain from exercising any such right if such action would have a material adverse effect on the value of the Pledged Collateral to the Lenders or any part thereof or be inconsistent with or violate any provisions of this Agreement, any of the Loan Documents or any of the Financing Documents. (b) Notwithstanding the pledge of the Pledged Notes set forth in Section 1 hereof, so long as no Default shall have occurred and be continuing, the Pledgor shall be entitled to receive all cash payments of interest and principal paid from time to time with respect to the Pledged Notes. (c) Notwithstanding the pledge of the Pledged Shares set forth in Section 1 hereof, so long as no Default shall have occurred and be continuing, the Pledgor shall be entitled to receive all cash dividends paid from time to time in respect of the Pledged Shares. (d) Any and all (i) dividends or other distributions and interest or principal paid or payable in the form of instruments and other property (other than cash interest and principal payments permitted under Section 6(b) hereof and cash dividends permitted under Section 6(c) hereof) received, receivable or otherwise distributed in respect of, or in exchange for, any Pledged Collateral, (ii) dividends and other distributions paid or payable in cash received, receivable or otherwise distributed in respect of any Pledged Shares in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (iii) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged Shares, shall in each case be delivered forthwith to the Collateral Agent to hold, for its benefit and the ratable benefit of the Lenders, as Pledged Collateral and shall, if received by the Pledgor, be received in trust for the Collateral Agent, for its benefit and the ratable benefit of the Lenders, be segregated from the other property or funds of the Pledgor, and be forthwith delivered to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement). (e) The Collateral Agent shall execute and deliver (or cause to be executed and delivered) to the Pledgor all such proxies and other instruments as the Pledgor may reasonably request for the purpose of enabling the Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant to Section 6(a) above and to receive dividends and distributions pursuant to Sections 6(b) and 6(c) above. (f) All dividends or other distributions and all interest and principal payments which are received by the Pledgor contrary to the provisions of this Section 6 shall be received in trust for the Collateral Agent, for its benefit and the ratable benefit of the Lenders, shall be segregated from other funds of the Pledgor and shall be forthwith paid over to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement). 5 6 (g) Upon the occurrence and during the continuance of a Default, all rights of the Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 6(a) shall cease, and all such rights shall become vested in the Collateral Agent, for its benefit and the ratable benefit of the Lenders, which shall thereupon have the sole right to exercise such voting and other consensual rights. (h) Upon the occurrence and during the continuance of a Default, all cash payments of interest and principal with respect to the Pledged Notes and all cash dividends or other distributions payable in respect of the Pledged Shares shall be paid directly to the Collateral Agent and, if received by the Pledgor, shall be received in trust for the Collateral Agent, for its benefit and the ratable benefit of the Lenders, shall be segregated from other funds of the Pledgor, and shall be forthwith paid over to the Collateral Agent as Pledged Collateral in the same form as so received (with any necessary endorsement) and the Pledgor's right to receive such cash payments pursuant to Sections 6(b) and 6(c) hereof shall immediately cease. SECTION 7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. (a) The Pledgor agrees that it will not (i) sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral without the prior written consent of the Collateral Agent, (ii) create or permit to exist any Lien upon or with respect to any of the Pledged Collateral, except for the security interest granted under this Agreement or (iii) enter into any agreement or understanding that purports to or may restrict or inhibit the Collateral Agent's rights or remedies hereunder, including, without limitation, the Collateral Agent's right to sell or otherwise dispose of the Pledged Collateral. (b) The Pledgor agrees that it will pledge and deliver to the Collateral Agent hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all additional shares of stock, notes or other securities of Holdings of which the Pledgor may become the beneficial owner after the date hereof. SECTION 8. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby appoints the Collateral Agent the Pledgor's attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time to time in the Collateral Agent's discretion to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to further perfect and protect the security interest granted hereby, including, without limitation, to receive, endorse and collect all instruments made payable to the Pledgor representing any dividend, interest or principal payment or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same. This power of attorney is coupled with an interest and is irrevocable by the Pledgor. The Pledgor hereby ratifies all that the Collateral Agent shall lawfully do or cause to be done by virtue of this Section 8. 6 7 SECTION 9. COLLATERAL AGENT MAY PERFORM. If the Pledgor fails to perform any agreement contained herein, the Collateral Agent may itself perform, or cause performance of, such agreement, and the reasonable expenses of the Collateral Agent incurred in connection therewith shall be payable by the Pledgor under Section 16 hereof. SECTION 10. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and powers granted to the Collateral Agent hereunder are being granted in order to preserve and protect the Collateral Agent's security interest in and to the Pledged Collateral granted hereby and shall not be interpreted to, and shall not, impose any duties on the Collateral Agent or any of the Lenders to the Pledgor in connection therewith. The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, it being understood that the Collateral Agent shall not have any responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relative to any Pledged Collateral, whether or not the Collateral Agent or any of the Lenders has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral. SECTION 11. SUBSEQUENT CHANGES AFFECTING PLEDGED COLLATERAL. The Pledgor represents to the Collateral Agent that the Pledgor has made its own arrangements for keeping informed of changes or potential changes affecting the Pledged Collateral (including, but not limited to, rights to convert, rights to subscribe, payment of dividends, payments of interest and/or principal, reorganization or other exchanges, tender offers and voting rights), and the Pledgor agrees that the Collateral Agent and the Lenders shall have no responsibility or liability for informing the Pledgor of any such changes or potential changes or for taking any action or omitting to take any action with respect thereto. The Pledgor covenants that it will not, without the prior written consent of the Collateral Agent, sell or otherwise dispose of, or grant any option with respect to, any of the Pledged Collateral or create or permit to exist any Lien upon or with respect to any of the Pledged Collateral, except for Permitted Liens (as defined in each of the Loan Agreement and the Financing Agreement). SECTION 12. REMEDIES UPON DEFAULT. If any Default shall have occurred and be continuing, the Collateral Agent shall, in addition to all other rights given by law or by this Agreement, any of the Loan Documents, any of the Financing Documents, or otherwise, but subject to Sections 14 and 15 of this Agreement, have all of the rights and remedies with respect to the Pledged Collateral of a secured party under the Uniform Commercial Code in effect in the State of New York at that time and the Collateral Agent (personally or through an agent) may, without notice and at its option, transfer or register, and the Pledgor shall register or cause to be registered upon request therefor by the Collateral Agent, the Pledged Collateral or any part thereof on the books of Holdings into the name of the Collateral Agent or the Collateral Agent's nominee(s), indicating that such Pledged Collateral is subject to the security interest hereunder. In addition, with respect to any Pledged Collateral which shall then be in or shall thereafter come into the possession or custody of the Collateral Agent, the Collateral 7 8 Agent (personally or through an agent) may sell or cause the same to be sold at any broker's board or at any public or private sale, in one or more sales or lots, at such price or prices as the Collateral Agent may deem best, for cash or on credit or for future delivery, without assumption of any credit risk, all in accordance with the terms and provisions of this Agreement, the Loan Agreement and the Financing Agreement. The purchaser of any or all Pledged Collateral so sold shall thereafter hold the same absolutely, free from any claim, encumbrance or right of any kind whatsoever. Unless any of the Pledged Collateral threatens to decline speedily in value or is or becomes of a type sold on a recognized market, the Collateral Agent will give the Pledgor reasonable notice of the time and place of any public sale thereof, or of the time after which any private sale or other intended disposition is to be made. Any sale of the Pledged Collateral conducted in conformity with reasonable commercial practices of lenders in general disposing of property similar to the Pledged Collateral shall be deemed to be commercially reasonable. Any requirements of reasonable notice shall be met if such notice is mailed to the Pledgor as provided in Section 19.1 below, at least fifteen (15) days before the time of the sale or disposition. Any other requirement of notice, demand or advertisement for sale is, to the extent permitted by law, waived. The Collateral Agent may, for its benefit and the ratable benefit of the Lenders, buy any of the Pledged Collateral at any public sale and, if permitted by applicable law, at any private sale. All expenses (including court costs and reasonable attorneys' fees, expenses and disbursements) of, or incident to, the enforcement of any of the provisions hereof shall be recoverable from the proceeds of the sale or other disposition of the Pledged Collateral. In addition, upon the occurrence and during the continuance of a Default, all rights of the Pledgor to exercise the voting and other rights which it would otherwise be entitled to exercise shall cease, and all such rights shall thereupon become vested in the Collateral Agent, for its benefit and the ratable benefit of the Lenders, as provided in and subject to the terms of Section 6(g) hereof. SECTION 13. DISTRIBUTION OF PROCEEDS UPON DEFAULT. Upon the sale or other disposition of any Pledged Collateral pursuant to Section 12 hereof, the proceeds of such sale or other disposition shall be applied by the Collateral Agent in the following order of priority: (a) first, to the reasonable, out-of-pocket costs and expenses of the Collateral Agent incurred in connection with the performance of its duties under this Agreement; (b) second, to the Lenders pro rata based on their respective Outstanding Balance Shares (as defined below) until payment in full of all Liabilities; and (c) third, delivered to the Pledgor. "Outstanding Balance Share" means a fraction (expressed as a percentage), the numerator of which shall be the aggregate of the outstanding principal amount of the Secured Notes held by such Lender and the denominator of which shall be the aggregate outstanding 8 9 principal amount of all Secured Notes. For the avoidance of doubt, none of the proceeds of such sale or other disposition shall be distributed to the Lenders pursuant to Section 13(b) hereof until the Collateral Agent has received full payment for all expenses incurred by it in connection with the performance of its duties under this Agreement and none of the proceeds of such sale or other disposition shall be distributed to the Pledgor under Section 13(c) hereof until all of the Liabilities have been paid in full. SECTION 14. REGISTRATION RIGHTS; PRIVATE SALES. (a) If the Collateral Agent shall, for its benefit and the ratable benefit of the Lenders, determine to exercise its right to sell any or all of the Pledged Shares pursuant to Section 12 hereof, and if in the opinion of the Collateral Agent it is necessary or advisable to have the Pledged Shares, or that portion thereof to be sold, registered under the provisions of the Securities Act, the Pledgor will use its commercially reasonable efforts to cause Holdings to (1) execute and deliver, and cause the directors and officers of Holdings to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the opinion of the Collateral Agent, necessary or advisable to register the Pledged Shares, or that portion thereof to be sold, under the provisions of the Securities Act, (2) to use its commercially reasonable efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of one year from the date of the first public offering of the Pledged Shares, or that portion thereof to be sold, and (3) to make all amendments thereto and/or to the related prospectus which, in the opinion of the Collateral Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Commission applicable thereto. The Pledgor agrees to use its commercially reasonable efforts to cause Holdings to comply with the provisions of the securities or "Blue Sky" laws of any and all jurisdictions which the Collateral Agent shall designate and to make available to the Collateral Agent and its security holders, as soon as practicable, an earnings statement (which need not be audited) which will satisfy the provisions of Section 11(a) of the Securities Act. (b) The Pledgor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Shares, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. The Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Shares for the period of time necessary to permit Holdings to register such 9 10 securities for public sale under the Securities Act, or under applicable state securities laws, even if Holdings would agree to do so. (c) The Pledgor further agrees to use its commercially reasonable efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of the Pledged Shares pursuant to this Section valid and binding and in compliance with any and all other applicable requirements of law. The Pledgor further agrees that a breach of any of the covenants contained in this Section will cause irreparable injury to the Lenders, that the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Section shall be specifically enforceable against the Pledgor, and the Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Default has occurred. SECTION 15. FCC MATTERS. (a) If a Default shall have occurred and be continuing, the Pledgor shall take any action which the Collateral Agent may request in the exercise of its rights and remedies under this Agreement to transfer and assign to the Collateral Agent, or to such one or more third parties as the Collateral Agent may designate, or to a combination of the foregoing, the Pledged Collateral. To enforce the provisions of this Section 15, the Collateral Agent is hereby empowered to seek from the FCC an involuntary transfer of control of Holdings for the purpose of seeking a bona fide purchaser to whom control will ultimately be transferred. If a Default shall have occurred and be continuing, the Pledgor hereby agrees to authorize such an involuntary transfer of control upon the request of the Collateral Agent. Upon the occurrence and continuation of a Default, the Pledgor shall use its commercially reasonable efforts to assist in obtaining approval of the FCC, if required, for any action or transactions contemplated by this Agreement, including, without limitation, the preparation, execution and filing with the FCC of the Pledgor's portion of any application or applications for consent to transfer of control necessary or appropriate under the FCC's rules and regulations for approval of the transfer or assignment of any portion of the Pledged Collateral. (b) The Pledgor acknowledges that FCC authorization for the transfer of control of the licenses of Holdings and its Subsidiaries is integral to the Lenders' realization of the value of the Pledged Collateral, that there is no remedy at law for failure by the Pledgor to comply with the provisions of this Section 15 and that such failure would not be adequately compensable in damages, and therefore agrees that the agreements of the Pledgor contained in this Section 15 may be specifically enforced. (c) Notwithstanding anything to the contrary contained in this Agreement, the Collateral Agent shall not, without first obtaining approval of the FCC, take any action pursuant to this Agreement which would constitute or result in any change of control of Holdings or any of its Subsidiaries if such change in control would require, under then 10 11 existing law (including the written rules and regulations of the FCC), the prior approval of the FCC. (d) Upon the occurrence and during the continuance of a Default and subject to the other provisions of Sections 12 and 14, the Pledgor consents to the transfer of control or assignment of the Pledged Collateral to a receiver, trustee, transferee, or similar official or to any purchaser of the Pledged Collateral pursuant to any public or private sale, judicial sale, foreclosure or exercise of other remedies available to the Collateral Agent, for its benefit and the ratable benefit of the Lenders, under this Agreement and as permitted by applicable law. (e) Notwithstanding anything to the contrary contained in this Agreement, prior to the occurrence of a Default and compliance with all applicable laws by the Collateral Agent, this Agreement and the transactions contemplated hereby do not, will not, and are not intended to, constitute, create or have the effect of constituting or creating, directly or indirectly, actual or practical ownership of the Pledgor, Holdings or any of their respective Subsidiaries by the Collateral Agent or the Lenders or control, affirmative or negative, direct or indirect, of the Pledgor, Holdings or any of their respective Subsidiaries, over the management or any other aspect of the operations of the Pledgor, Holdings or any of their respective Subsidiaries, which ownership and control remain exclusively and at all times in the Pledgor, Holdings and their respective Subsidiaries, as the case may be. SECTION 16. EXPENSES. The Pledgor will, upon demand, pay to the Collateral Agent the amount of any and all reasonable expenses, including, without limitation, the reasonable fees, expenses and disbursements of its counsel (including allocated costs of inside counsel), of any investment banking firm, business broker or other selling agent and of any other experts and agents retained by the Collateral Agent, which the Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Pledged Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent hereunder or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof. All expenses incurred in connection therewith shall be for the sole account of the Pledgor, and shall constitute part of the Liabilities secured hereby. SECTION 17. SECURITY INTEREST ABSOLUTE. All rights of the Collateral Agent and security interests hereunder, and all obligations of the Pledgor hereunder, shall be absolute and unconditional irrespective of, and unaffected by: (a) any lack of validity or enforceability of any Loan Document; (b) any lack of validity or enforceability of any Financing Document; (c) any change in the time, manner or place of payment of, or in any other term of, all or any of the Liabilities, or any other amendment or waiver of or any consent to any 11 12 departure from any Loan Document or any Financing Document; (d) any exchange, surrender, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Liabilities; or (e) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the Pledgor in respect of the Liabilities or of this Agreement. SECTION 18. THE COLLATERAL AGENT AS THE LENDERS' CONTRACTUAL REPRESENTATIVE. SECTION 18.1 Appointment of Collateral Agent. Each Lender hereby designates HNS as Collateral Agent to act as herein specified. Each Lender hereby irrevocably authorizes the Collateral Agent to take such action on its behalf under the provisions of this Agreement and any other instruments and agreements referred to herein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Collateral Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Collateral Agent shall hold all Pledged Collateral and proceeds for the benefit of itself and the Lenders to be distributed as provided herein. The Collateral Agent may perform any of its duties hereunder by or through its agents or employees. SECTION 18.2 Nature of Duties of Collateral Agent. The Collateral Agent shall have no duties or responsibilities except those expressly set forth in this Agreement. Neither the Collateral Agent nor any of its officers, directors, employees or agents shall be liable to the Lenders for any action taken or omitted by it as such hereunder or in connection herewith, unless caused by its or their gross negligence or willful misconduct. The duties of the Collateral Agent shall be mechanical and administrative in nature, and the Collateral Agent shall not have by reason of this Agreement a fiduciary relationship in respect of any Lender. SECTION 18.3 Lack of Reliance on Collateral Agent. The Collateral Agent shall not be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement, the Financing Agreement, the Loan Agreement or the Secured Notes or the existence or possible existence of any Default, unless any Lender specifically requests the Collateral Agent to do so in writing. SECTION 18.4 Certain Rights of the Collateral Agent. The Collateral Agent shall have the right to request instructions from the Directing Lenders (as defined below) at any time. If the Collateral Agent shall request instructions from the Directing Lenders with respect to any act or action (including the failure to act) in connection with this Agreement, the Collateral Agent shall be entitled to refrain from such act or taking such action unless and until the Collateral Agent shall have received instructions from the Directing Lenders, and the Collateral Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, no Lender shall have any right of action whatsoever against the Collateral Agent as 12 13 a result of the Collateral Agent acting or refraining from acting hereunder in accordance with the instructions of the Directing Lenders. The "Directing Lenders" means such Lenders that hold Secured Notes that have an aggregate maximum face principal amount greater than fifty percent (50%) of the aggregate of the maximum face principal amount of all of the Secured Notes then outstanding. SECTION 18.5 Reliance by Collateral Agent. The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other documentary, teletransmission or telephone message believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. The Collateral Agent may consult with legal counsel (including counsel for the Pledgor with respect to matters concerning the Pledgor), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts. SECTION 18.6 Indemnification of Collateral Agent. To the extent the Collateral Agent is not reimbursed and indemnified by the Pledgor, each Lender will reimburse and indemnify the Collateral Agent for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in performing its duties hereunder, in any way relating to or arising out of this Agreement, provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Collateral Agent's gross negligence or willful misconduct. SECTION 18.7 The Collateral Agent in its Individual Capacity. With respect to its obligation as a Lender under this Agreement, the Collateral Agent shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it was not performing the duties specified herein; and the term "Lenders" or any similar term shall, unless the context clearly otherwise indicates, include the Collateral Agent in its individual capacity as a Lender. The Lenders acknowledge that HNS is the seller of the Base Station Equipment to the Pledgor and has engaged in certain other business transactions with the Pledgor and other Geotek Affiliates (as defined in the Manufacturing Agreement) and agree that the Collateral Agent may lend money to, acquire equity interests in, and generally engage in any kind of financial advisory or other business with the Pledgor or any Geotek Affiliate as if it were not performing the duties specified herein, and may accept fees and other consideration from the Pledgor for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. 13 14 SECTION 18.8 Successor Collateral Agent. (a) The Collateral Agent may, upon five (5) Business Days' notice to the Lenders and the Pledgor, resign at any time (effective upon the appointment of a successor collateral agent pursuant to the provisions of this Section 18.8) by giving written notice thereof to the Lenders and the Pledgor. Upon any such resignation, the Directing Lenders shall have the right, upon five (5) days' notice and approval by the Pledgor (which approval shall not be unreasonably withheld), to appoint a successor collateral agent. If no successor collateral agent (i) shall have been so appointed by the Directing Lenders, and (ii) shall have accepted such appointment, within thirty (30) days after the Collateral Agent's giving of notice of resignation, then, upon five (5) days' notice, the Collateral Agent may, on behalf of the Lenders, appoint a successor collateral agent. (b) Upon the acceptance of any appointment as collateral agent hereunder by a successor collateral agent, such successor collateral agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the Collateral Agent, all references in this Agreement to "Collateral Agent" shall refer to such successor collateral agent and the Collateral Agent shall be discharged from its duties and obligations under this Agreement. After the Collateral Agent's resignation hereunder as collateral agent, the provisions of Section 18 shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement. (c) In the event of a material breach by the Collateral Agent of its duties hereunder, the Collateral Agent may be removed by the Directing Lenders for cause and the provisions of this Section 18.8 shall apply to the appointment of a successor collateral agent. SECTION 18.9 Collateral Matters. (a) The Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to a Default, to take any action with respect to any Pledged Collateral which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Pledged Collateral. (b) The Lenders hereby authorize the Collateral Agent, and the Collateral Agent shall, release any Lien granted to or held by the Collateral Agent upon any Pledged Collateral (i) upon the payment and satisfaction of all of the Liabilities or (ii) if approved, authorized or ratified in writing by the Directing Lenders. Upon request by the Collateral Agent at any time, the Lenders will confirm in writing the Collateral Agent's authority to release particular types or items of Pledged Collateral pursuant to this Section 18.9. 14 15 (c) Upon any sale and transfer of Pledged Collateral which is expressly permitted pursuant to the terms of the Financing Agreement, the Loan Agreement or this Agreement or consented to in writing by the Directing Lenders, and upon at least five (5) Business Days' prior written request by the Pledgor, the Collateral Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Collateral Agent for its benefit and the benefit of the Lenders herein or pursuant hereto upon the Pledged Collateral that was sold or transferred; provided that (i) the Collateral Agent shall not be required to execute any such document on terms which, in the Collateral Agent's opinion, would expose the Collateral Agent or the Lenders to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect or impair the Liabilities or any Liens upon all interests retained by the Pledgor, including (without limitation) the proceeds of the sale, all of which shall continue to constitute part of the Pledged Collateral. In the event of any sale or transfer of Pledged Collateral, or any foreclosure with respect to any of the Pledged Collateral, the Collateral Agent shall be authorized to deduct all of the expenses reasonably incurred by the Collateral Agent from the proceeds of any such sale, transfer or foreclosure. (d) The Collateral Agent shall have no obligation whatsoever to the Lenders or to any other Person to assure that the Pledged Collateral exists or is owned by the Pledgor or is cared for, protected or insured or that the Liens granted to the Collateral Agent herein or pursuant hereto have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent in this Section 18.9, it being understood and agreed that in respect of the Pledged Collateral, or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Collateral Agent's own interest in the Pledged Collateral as one of the Lenders and that the Collateral Agent shall have no duty or liability whatsoever to the Lenders, except for its gross negligence or willful misconduct. SECTION 18.10 Actions with Respect to Defaults. The Collateral Agent shall take such action with respect to a Default as shall be directed by the Directing Lenders; provided that until the Collateral Agent shall have received such directions, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable and in the best interests of the Lenders. Any amendment or waiver of any provision of this Agreement and any consent to any departure by the Pledgor from any provision of this Agreement shall be effected by the Collateral Agent pursuant to Section 19.4 hereof and only upon the written authorization of the Directing Lenders. 15 16 SECTION 18.11 Delivery of Information. The Collateral Agent shall not be required to deliver to any Lender originals or copies of any documents, instruments, notices, communications or other information received by the Collateral Agent from the Pledgor, the Directing Lenders, any Lender or any other Person under or in connection with this Agreement except (i) as specifically provided in this Agreement and (ii) as specifically requested from time to time in writing by any Lender with respect to a specific document, instrument, notice or other written communication received by and in the possession of the Collateral Agent at the time of receipt of such request and then only in accordance with such specific request. SECTION 19. MISCELLANEOUS PROVISIONS. SECTION 19.1 Notices. All notices, approvals, consents or other communications required or desired to be given hereunder shall be in the form and manner, and delivered to each of the parties hereto at their respective addresses, set forth in Article X of the Financing Agreement or Article XI of the Loan Agreement, as applicable. SECTION 19.2 Headings. Section headings in this Agreement are for convenience of reference only, and shall not govern the interpretation of any of the provisions of this Agreement. SECTION 19.3 Severability. Any provision in any Loan Document or in any Financing Document that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable. SECTION 19.4 Amendments, Waivers and Consents. No delay or omission of the Collateral Agent to exercise any right under this Agreement shall impair such right or be construed to be a waiver of any Default or an acquiescence therein. Any single or partial exercise of any such right shall not preclude other or further exercise thereof or the exercise of any other right and no waiver, amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever shall be valid unless in writing signed by the Collateral Agent, and then only to the extent in such writing specifically set forth. All remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent, for its benefit and the ratable benefit of the Lenders, until the Liabilities have been paid in full. SECTION 19.5 Interpretation of Agreement. Time is of the essence in each provision of this Agreement of which time is an element. All terms not defined herein or in the Financing Agreement shall have the meaning set forth in the applicable Uniform Commercial Code, except where the context otherwise requires. To the extent a term or provision of this Agreement conflicts with the Loan Agreement or the Financing Agreement and is not dealt with herein with more specificity, the Loan Agreement or the Financing Agreement, as applicable, 16 17 shall control with respect to the subject matter of such term or provision. Acceptance of or acquiescence in a course of performance rendered under this Agreement shall not be relevant in determining the meaning of this Agreement even though the accepting or acquiescing party had knowledge of the nature of the performance and opportunity for objection. SECTION 19.6 Continuing Security Interest; Transfer of Secured Notes. This Agreement shall create a continuing security interest in the Pledged Collateral and shall (i) remain in full force and effect until payment in full of the Liabilities, (ii) be binding upon the Pledgor, its successors and assigns, and (iii) inure to the benefit of the Collateral Agent, the Lenders and their respective successors, transferees and assigns. Without limiting the generality of clause (iii), above, any Lender may, except as limited by the express terms of the Loan Agreement, the Financing Agreement or the Secured Notes, assign or otherwise transfer, in whole or in part, any Secured Note held by it to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise. SECTION 19.7 Reinstatement. To the extent permitted by law, this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any amount received by the Collateral Agent or any Lender in respect of the Liabilities is rescinded or must otherwise be restored or returned by such Lender upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Pledgor or upon the appointment of any receiver, intervenor, conservator, trustee or similar official for the Pledgor or any substantial part of its assets, or otherwise, all as though such payments had not been made. SECTION 19.8 Survival of Provisions. All representations, warranties and covenants of the Pledgor contained herein shall survive the execution and delivery of this Agreement, and shall terminate only upon the full and final payment and performance by the Pledgor of the Liabilities secured hereby. SECTION 19.9 Waivers. The Pledgor waives presentment and demand for payment of any of the Liabilities, protest and notice of dishonor or default with respect to any of the Liabilities, and all other notices to which the Pledgor might otherwise be entitled, except as otherwise expressly provided in this Agreement, the Loan Agreement or the Financing Agreement, as applicable. SECTION 19.10 Authority of the Collateral Agent; Indemnification. The Collateral Agent shall, for the benefit of the Lenders, have and be entitled to exercise all powers hereunder which are specifically granted to the Collateral Agent by the terms hereof, together with such powers as are reasonably incident thereto. The Collateral Agent may perform any of its duties hereunder or in connection with the Pledged Collateral by or through agents or employees and shall be entitled to retain counsel and to act in reliance upon the advice of counsel concerning all such matters. Neither the Collateral Agent nor any Lender, nor any director, officer, employee, attorney or agent of the Collateral Agent or any Lender shall be liable to the Pledgor for any action taken or omitted to be taken by it or them hereunder, except 17 18 for its or their own gross negligence or willful misconduct, nor shall the Collateral Agent or any of the Lenders be responsible for the validity, effectiveness or sufficiency of this Agreement or of any document or security furnished pursuant hereto. The Collateral Agent and its directors, officers, employees, attorneys and agents shall be entitled to rely on any communication, instrument or document reasonably believed by it or them to be genuine and correct and to have been signed or sent by the proper Person or Persons. The Pledgor agrees to indemnify and hold harmless the Collateral Agent and its officers, directors, employees and agents from and against any and all costs, expenses (including reasonable fees, expenses and disbursements of attorneys and paralegals), claims and liabilities incurred by the Collateral Agent (in its capacity as Collateral Agent) or such officers, directors, employees and agents (in each case in their capacity as such) as a result of the Pledgor's actions, breach or assertion of a defense under this Agreement, any of the Loan Documents or any of the Financing Documents, unless such claim or liability shall be due to willful misconduct or gross negligence on the part of the Collateral Agent or such Person, as applicable. SECTION 19.11 Release; Termination of Agreement. Subject to the provisions of Section 19.7 hereof, this Agreement shall terminate upon full and final payment and performance of all the Liabilities. At such time, the Collateral Agent shall, at the request and expense of the Pledgor, promptly reassign and redeliver to the Pledgor all of the Pledged Collateral hereunder which has not been sold, disposed of, retained or applied by the Collateral Agent, for its benefit and the benefit of the Lenders, in accordance with the terms hereof. Such reassignment and redelivery shall be without warranty by or recourse to the Collateral Agent or any of the Lenders, except as to the absence of any prior assignments by the Collateral Agent of its interest in the Pledged Collateral, and shall be at the expense of the Pledgor. SECTION 19.12 INTERRELATIONSHIP WITH ORIGINAL PLEDGE AGREEMENT. As stated in the preamble hereof, this Agreement is intended to amend and restate the provisions of the Original Pledge Agreement and, except as expressly modified herein, (a) all of the terms and provisions of the Original Pledge Agreement shall continue to apply for the period prior to the date hereof and (b) the pledge by the Pledgor of the Pledged Collateral (pursuant to and as defined in the Original Pledge Agreement) shall continue uninterrupted notwithstanding this amendment and restatement of the Original Pledge Agreement. All references in the Loan Agreement, the other Loan Documents, the Financing Agreement or the other Financing Documents to the "Pledge Agreement" shall be deemed to include references to this Agreement. As of the date hereof, all of the covenants set forth in the Original Pledge Agreement are of no further force and effect, it being understood that all obligations of the Pledgor with respect to the Pledged Collateral (as defined in the Original Pledge Agreement) shall be governed by this Agreement from and after the date hereof. For the avoidance of doubt, this Agreement has been executed in renewal, amendment, restatement and modification, but not in extinguishment of, the Original Pledge Agreement. 18 19 SECTION 19.13 SUBMISSION TO JURISDICTION; WAIVERS. THE PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY: (a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF; (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND AGREES NOT TO PLEAD OR CLAIM THE SAME; (c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE PLEDGOR AT ITS ADDRESS SET FORTH BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE COLLATERAL AGENT SHALL HAVE BEEN NOTIFIED PURSUANT HERETO; (d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE COLLATERAL AGENT OR ANY OF THE LENDERS TO COMMENCE LEGAL PROCEEDINGS AGAINST THE PLEDGOR OR ITS PROPERTY IN ANY OTHER JURISDICTION; (e) WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND PRIOR TO THE EXERCISE BY THE COLLATERAL AGENT OR ANY OF THE LENDERS OF THEIR RIGHTS FROM AND AFTER AN EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL. THE PLEDGOR WAIVES THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY OF THE LENDERS IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL, TO ENFORCE ANY JUDGMENT OR OTHER SECURITY FOR THE LIABILITIES, TO ENFORCE ANY JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY OR TO ENFORCE BY SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT, OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN THE PLEDGOR AND ANY SUCH PARTY. 19 20 (f) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO, SUCH ACTION OR PROCEEDING; AND (g) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT. SECTION 19.14 JURY TRIAL. THE PLEDGOR, THE COLLATERAL AGENT AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. SECTION 19.15 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK. SECTION 19.16 COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and either of the parties hereto may execute this Agreement by signing any such counterpart. [SIGNATURE PAGE FOLLOWS] 20 21 IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have each caused this Agreement to be duly executed and delivered as of the date first above written. PLEDGOR: GEOTEK FINANCING CORPORATION, a Delaware corporation By: /s/ MICHAEL MCCOY ----------------------------------- Name: Michael McCoy Title: Chief Financial Officer COLLATERAL AGENT: HUGHES NETWORK SYSTEMS, INC., as Collateral Agent By: /s/ S.P. CARRIER ----------------------------------- Name: S.P. Carrier Title: Vice President and Secretary With respect to Section 18 only: LENDER: HUGHES NETWORK SYSTEMS, INC. By: /s/ PRADEEP KAUL ----------------------------------- Name: Pradeet Kaul Title: Executive Vice President 22 Schedule I PLEDGED SHARES
Number of Pledged Share Certificate Percentage of Issuer Shares Numbers Outstanding - ------ ------ ------- ----------- Geotek License Holdings, Inc. 100 1 100%
23 Schedule II PLEDGED NOTES
Obligor Description of Note Principal Amount of Note - ------- ------------------- ------------------------ Geotek License Promissory Note dated $24,500,000 Holdings, Inc. September 27, 1996
EX-99.VI 7 FORM OF WARRANT TO PURCHASE COMMON STOCK 1 EXHIBIT VI NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF IN THE UNITED STATES EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), ANY APPLICABLE STATE SECURITIES LAWS AND THE TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH. VOID AFTER 5:00 P.M., NEW YORK, NEW YORK TIME, September 26, 2003 ************************************************ WARRANT to PURCHASE COMMON STOCK of GEOTEK COMMUNICATIONS, INC. ************************************************ This certifies that, for good and valuable consideration, Geotek Communications, Inc., a Delaware corporation (the "Company"), grants to Hughes Network Systems, Inc., a Delaware corporation, or permitted assigns (the "Warrantholder" or "Warrantholders"), the right to subscribe for and purchase from the Company, at a purchase price of $_______ per share (the "Exercise Price"), at any time and from time to time after the Initial Exercise Date (as defined below), and to and including 5:00 P.M. New York City time on September 26, 2003 (the "Expiration Date"), One Million (1,000,000) shares, as such number of shares may be adjusted from time to time (the "Warrant Shares"), of the Company's Common Stock, par value $.01 per share (the "Common Stock"), subject to the provisions and upon the terms and conditions herein setforth. The Exercise Price and the number of Warrant Shares are subject to adjustment from time to time as provided in Section l.5(c) and Section 6. The Initial Exercise Date shall be the earlier of (x) September 27, 1997 and (y) a Change of Control (as defined in the Indenture dated as of June 30, 1995 by and between the Company and IBJ Schroder Bank & Trust Company, as trustee, as in effect on the date hereof). This Warrant has been issued as part of a duly authorized issue of warrants expiring September 26, 2003 (which warrants are hereinafter referred to collectively as the "Warrants") pursuant to that certain Vendor Credit Financing Agreement made as of the 27th day of September, 2 1996 (the "Credit Agreement") by and among Geotek Financing Corporation ("Finance Corporation"), the Company and Hughes Network Systems, Inc. ("HNS"). SECTION 1. EXERCISE OF WARRANT; LIMITATION ON EXERCISE; PAYMENT OF TAXES. 1.1 Exercise of Warrant. (a) Subject to the limitations set forth in Section 1.2 hereof, the Warrantholder may exercise this Warrant, in whole or in part at any time and from time to time on or after the Initial Exercise Date, by presentation and surrender of this Warrant to the Company at its principal executive offices or at the office of its stock transfer agent, if any, with the Subscription Form annexed hereto duly executed and payment of the full Exercise Price for each Warrant Share to be purchased in accordance with Section 1.3 hereof. (b) Upon receipt of this Warrant, with the Subscription Form duly executed and payment of the aggregate Exercise Price in accordance with Section 1.3 hereof for the Warrant Shares for which this Warrant is then being exercised, the Company shall cause to be issued certificates for the total number of whole shares of Common Stock for which this Warrant is being exercised (adjusted to reflect the effect of the antidilution provisions contained in Section 6 hereof, if any, and as provided in Sections 5 and 8.8 hereof) in such denominations as are requested for delivery to the Warrantholder, and the Company shall thereupon promptly deliver such certificates to the Warrantholder. The stock certificates so delivered shall be in such denominations as may be specified by the Warrantholder and shall be issued in the name of the Warrantholder or, if permitted by Section 5 and in accordance with the provisions thereof, such other name as shall be designated in the Subscription Form. The Warrantholder shall be deemed to be the holder of record of the shares of Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such shares of Common Stock shall not then be actually delivered to the Warrantholder. If at the time this Warrant is exercised, a registration statement is not in effect to register under the Securities Act the issuance of the Warrant Shares upon exercise of this Warrant, the Company may require the Warrantholder to make such customary representations and deliver such customary opinions of counsel, and may place such customary legends on certificates representing the Warrant Shares, as may be reasonably required in the opinion of counsel to the Company to permit the Warrant Shares to be issued without such registration. (c) If this Warrant shall have been exercised only in part, the Company shall, at the time of delivery of the certificates for the Warrant Shares, deliver to the Warrantholder a new Warrant evidencing the rights to purchase the remaining Warrant Shares, which new Warrant shall in all other respects be identical with this Warrant. No adjustments or payments shall be made on or in respect of Warrant Shares issuable on the exercise of this Warrant for any regular cash dividends paid or payable to holders of record of Common Stock prior to the date as of which the Warrantholder shall be deemed to be the record holder of such Warrant Shares. -2- 3 1.2 Limitation on Exercise of Warrants and Sales of Warrant Shares. (a) If this Warrant is not exercised prior to 5:00 p.m. on the Expiration Date (or the next succeeding Business Day, if the Expiration Date is a Saturday, Sunday or a day on which the New York Stock Exchange is authorized to close or on which the Company is otherwise closed for business (a "Nonbusiness Day")), this Warrant, or any new Warrant issued pursuant to Section 1.1, shall cease to be exercisable and shall become void and all rights of the Warrantholder hereunder shall cease. This Warrant shall not be exercisable and no Warrant Shares shall be issued hereunder prior to 9:00 a.m. New York City time on the Initial Exercise Date. (b) Notwithstanding anything herein to the contrary, no Warrantholder, without the Company's prior written consent, shall be entitled to sell or otherwise transfer (other than sales or transfers between Warrantholder and one or more of its affiliates (as defined in Rule 501 under the Securities Act) or between its affiliates) greater than 10,000 Warrant Shares on any trading day occurring prior to October 1, 1996 or greater than the Maximum Sales Amount (as defined below) on any trading day occurring on or after October 1, 1996. All sales and transfers by Warrantholder and its affiliates on a trading day shall be aggregated for purposes of determining whether Warrantholder has complied with this Section. For purposes of this Section 1.2(b), the "Maximum Sales Amount" shall mean the greater of (x) a number of shares of Common Stock with an aggregate market value (based on the Quoted Price (as defined herein) of the Common Stock on the trading day immediately preceding the sale or transfer for which the determination is being made) equal to $500,000 and (y) such number of shares which is equal to 5% of the average daily trading volume of the Company's Common Stock on the primary interdealer quotation system or national securities exchange on which the Common Stock is traded for the thirty (30) trading day period immediately preceding the date of sale or transfer. (c) For so long as HNS or any of its affiliates own any Warrants or Warrant Shares, neither HNS nor any of its affiliates may sell on any day more shares of the Company's Common Stock than HNS and its affiliates (other than HNS Retirement Plans (as defined below)) own on such day (including shares in respect of which it has or will properly exercise its exercise rights under the Warrants on such day). Nothing in this Section 1.2(c) shall restrict (i) the ability of HNS or any of its affiliates to sell, assign or otherwise transfer this Warrant in accordance with the terms, and subject to the limitations, contained herein or (ii) the ability of any pension or other retirement plan (other than a pension or retirement plan which owns Warrants or Warrant Shares) for the primary benefit of employees or former employees of HNS and its affiliates (each such plan is referred to herein as an "HNS Retirement Plan") from engaging in any trading activity with respect to the Company's Common Stock. 1.3 Payment of Exercise Price. Payment of the Exercise Price pursuant to Section 1.1 (a) shall be made to the Company no later than the fourth trading day following delivery of the Subscription Form with respect to such exercise by one of the following methods (at the option of the Warrantholder): (a) in cash; (b) by certified or official bank check payable in United States dollars to the order of the Company; (c) by wire transfer of same day funds in accordance with the -3- 4 Company's written wiring instructions; (d) by applying all or any portion of the Obligations under the Credit Agreement that are then past due and payable under the Credit Agreement against the Exercise Price; or (e) by any combination of the foregoing. Any portion of the Exercise Price paid by the Warrantholder in the manner set forth in clause (d) of this Section 1.3 shall be in complete satisfaction of Finance Corporation's and the Company's obligations to pay such amount under the Credit Agreement. 1.4 Payment of Taxes. The issuance of certificates for Warrant Shares shall be made without charge to the Warrantholder for any stock transfer or other issuance tax in respect thereto; provided, however, that the Warrantholder shall be required to pay any and all taxes which may be payable in respect to any transfer involved in the issuance and delivery of any certificates for Warrant Shares in a name other than that of the then Warrantholder as reflected upon the books of the Company. 1.5 Mandatory Exercise. (a) From and after September 27, 2000, the Company may, in its sole discretion, require the exercise of all or any portion of this Warrant following a Mandatory Exercise Calculation Period in accordance with the Mandatory Exercise Procedures (as defined in Section 1.5(b) below). "Mandatory Exercise Calculation Period" shall be any period during which for ten (10) consecutive trading days after September 27, 2000, the Closing Price (as defined below) of the Common Stock equaled or exceeded the Mandatory Exercise Price. The initial Mandatory Exercise Price shall be equal to $12.9375. The Mandatory Exercise Price shall be subject to equitable adjustment in accordance with the antidilution provisions set forth in Section 6(a) to the same extent as the Exercise Price is subject to adjustment. At any time during the ten (10) business day period immediately following the conclusion of a Mandatory Exercise Calculation Period, the Company may mail to the holder of this Warrant at its last address reflected on the Company's books and records (and in the case of HNS, with copies of such notice sent by certified or registered mail, postage prepaid and return receipt requested, to each of the General Counsel and the Chief Financial Officer of HNS at 11717 Exploration Lane, Germantown, Maryland 20876 and to the Treasurer of Hughes Electronics Corporation at 7200 Hughes Terrace, Los Angeles, California 90045) a notice ( a "Mandatory Exercise Notice") notifying such holder that the Company has exercised its right pursuant to this Section 1.5 and that the Holder is subject to the Mandatory Exercise Procedures set forth in Section 1.5(b). Such notice shall set forth (i) the last date by which the Warrantholder must have initiated the Mandatory Exercise Procedures, (ii) the aggregate number of shares of Common Stock issuable upon exercise of this Warrant which are subject to Mandatory Exercise Procedures and (iii) any restrictions on the number of shares of Common Stock which the Warrantholder may sell pursuant to the Mandatory Exercise Procedures (the "Volume Limitations"). Notwithstanding the foregoing, this Warrant shall not be subject to mandatory exercise pursuant to this Section 1.5 at any time that the issuance of the Warrant Shares upon exercise of the Warrant or the resale of such is not registered under the Securities Act. As used in this Agreement, "Closing Price" shall mean the last reported sales price of the Common Stock on any national securities exchange on which the Common Stock is listed which shall be for consolidated trading if applicable to such exchange, or -4- 5 if not so listed, the last reported bid price of the Common Stock, as reported on the NASDAQ Stock Market or on the principal securities market on which the Common Stock is then being traded. (b) As used in this Section 1.5, "Mandatory Exercise Procedures" shall consist of the following: (i) Within five (5) business days after receiving a Mandatory Exercise Notice, the Warrantholder shall deliver a standing order to a nationally recognized brokerage firm to use its reasonable best efforts to sell, in an orderly manner and subject to the Volume Limitations and the restrictions contained in Section 1.2 hereof, such number of shares of Common Stock that such brokerage firm can sell at a price at or above the Mandatory Exercise Price. The Warrantholder shall not revoke or otherwise modify such standing order other than as contemplated by subparagraph (iii) of these Mandatory Exercise Procedures or otherwise with the written consent of the Company and shall deliver to the Company (when delivered to the brokerage firm) copies of all correspondence to the brokerage firm which relates to such standing order. (ii) Within four (4) trading days after any sale by the Warrantholder of any shares of Common Stock pursuant to these Mandatory Exercise Procedures, the Warrantholder shall exercise this Warrant to purchase the full number of shares so sold. (iii) In the event the Company shall modify or impose any new Volume Limitations or increase the Maximum Sales Amount with respect to any Mandatory Exercise Procedures then in effect, such modified or new Volume Limitations and/or Mandatory Sales Amount shall become effective on the third trading day following the Company's written notice to the Warrantholder of such modified or new Volume Limitations and/or Mandatory Sales Amount. The Warrantholder shall promptly (but in no event later than one (1) trading day prior to the effective date of such new criteria) notify the brokerage firm implementing the Mandatory Exercise Procedures of the new or modified Volume Limitations and/or Mandatory Sales Amount and shall deliver a copy of such notification to the Company. (c) In the event the holder of this Warrant (i) fails to implement the Mandatory Exercise Procedures within the time frames set forth therein (including, without limitation, any failure by the brokerage firm referenced in Section 1.5(b)(i) hereof to utilize its reasonable best efforts to sell, in an orderly manner, the maximum number of Shares it is authorized to sell under such Mandatory Exercise Procedures) or fails to exercise this Warrant in accordance with such procedures and (ii) fails to fully cure all such failures during the thirty (30) day period (the "Maximum Exercise Cure Period") following the date upon which such holder receives notice from the Company of its failure to exercise any portion of this Warrant pursuant to the Mandatory Exercise Procedures, then, effective on the first day following the Maximum Exercise Cure Period and continuing until such time as such holder shall fully cure all such failures which have occurred through the date of such cure (the "Cure Date"), the Exercise Price with respect to each Warrant Share (a "Default Share") which would have been purchased upon exercise of this Warrant in accordance with the Mandatory Exercise Procedures through the Cure Date shall be equal to the -5- 6 Mandatory Default Exercise Price. The Mandatory Default Exercise Price shall initially equal one hundred and ten percent (110%) of the Exercise Price then in effect and shall increase, on a daily basis, at a rate of ten percent (10%) of the Exercise Price in effect at the time of the Mandatory Exercise Notice per month until the Cure Date. In the event the Cure Date does not occur within five (5) months after the expiration of the Mandatory Exercise Cure Period, the Company, in addition to all other remedies available to it at law or in equity, may terminate this Warrant effective on the Mandatory Exercise Date. (d) In no event shall any Mandatory Exercise Procedures (including, without limitation, any Volume Limitations set forth therein) limit the Warrantholder's ability to exercise this Warrant or sell Warrant Shares in accordance with and subject to the limitations contained elsewhere in this Warrant (including, without limitation, Section 1.2 hereof). For the avoidance of doubt, any Volume Limitations established by the Company as part of the Mandatory Exercise Procedures shall not limit the Warrantholder's ability to elect to sell up to the Maximum Sales Amount as contemplated by Section 1.2 hereof even if such Maximum Sales Amount is greater than any such Volume Limitations. SECTION 2. RESERVATION AND LISTING OF SHARES, ETC. All Warrant Shares which are issued upon the exercise of the rights represented by this Warrant shall, upon issuance and payment of the Exercise Price, be validly issued, fully paid and nonassessable without any preemptive rights, and free from all taxes, liens, security interests, charges and other encumbrances with respect to the issue thereof other than taxes in respect of any transfer occurring contemporaneously with such issue. During the period within which this Warrant may be exercised, the Company shall at all times have authorized and reserved, and keep available and free from preemptive rights, and free from all taxes, liens, security interests, charges and other encumbrances with respect to the issue thereof, a sufficient number of shares of Common Stock to provide for the exercise of this Warrant, and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the exercise of this Warrant, in addition to such other remedies as shall be available to a Warrantholder, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes. In addition, prior to the issuance of any Warrant Shares, the Company shall at its expense procure the listing of the Warrant Shares (or any other issues of capital stock issuable upon the exercise of this Warrant if such other class of capital stock is then so listed) which shall be issued upon exercise of this Warrant (subject to official notice of issuance) as then may be required on all stock exchanges or interdealer quotation systems on which the Common Stock is then listed and shall maintain such listing if and so long as any shares of the same class shall be listed on such stock exchanges or interdealer quotation systems. The Company shall, from time to time, take all such action as may be required to assure that the par value per share of the Warrant Shares is at all times equal to or less than the then effective Exercise Price. -6- 7 SECTION 3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT. If permitted by Section 5 and in accordance with the provisions thereof, upon surrender of this Warrant to the Company with a duly executed instrument of assignment and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant of like tenor in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of such bond or indemnification as the Company may reasonably require, and, in the case of such mutilation, upon surrender and cancellation of this Warrant, the Company will execute and deliver a new Warrant of like tenor. The term "Warrant" as used herein includes any Warrants issued in substitution or exchange of this Warrant. SECTION 4. OWNERSHIP OF WARRANT: CERTAIN RIGHTS OF WARRANTHOLDERS. (a) The Company may deem and treat the Person (as defined in Section 7.1 hereof) in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary, until presentation of this Warrant for registration of transfer as provided in subsection 1.1, Section 3 or Section 5. (b) Nothing contained in this Warrant shall be construed as conferring upon the Warrantholder or its transferees the right to vote or to receive dividends or to consent or to receive notice as a stockholder in respect of any meeting of stockholders for the election of directors of the Company or of any other matter, or any rights whatsoever as stockholders of the Company. The Company shall give notice to the Warrantholder by registered mail if at any time prior to the expiration or exercise in full of the Warrants, any of the following events shall occur: (i) the Company shall authorize the payment of any dividend payable in any securities upon shares of Common Stock or authorize the making of any distribution (other than a regular cash dividend paid out of net profits legally available therefor) to all holders of Common Stock; (ii) the Company shall authorize the issuance to all holders of Common Stock of any additional shares of Common Stock or securities that are convertible into or exercisable for shares of Common Stock ("Common Stock Equivalents") or of rights, options or warrants to subscribe for or purchase Common Stock or Common Stock Equivalents or of any other subscription rights, options or warrants; (iii) a dissolution, liquidation or winding up of the Company; or -7- 8 (iv) a capital reorganization or reclassification of the Common Stock (other than a subdivision or combination of the outstanding Common Stock and other than a change in the par value of the Common Stock) or any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or change of Common Stock outstanding) or in the case of any sale or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety or a tender offer or exchange offer for shares of Common Stock. Such giving of notice shall be initiated at least 20 days prior to the date fixed as a record date or effective date or the date of closing of the Company's stock transfer books for the determination of the stockholders entitled to such dividend, distribution, issuance or subscription rights, or for the determination of the stockholders entitled to vote on such proposed merger, consolidation, sale, conveyance, dissolution, liquidation or winding up or to participate in such tender or exchange offer. Such notice shall specify (A) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such rights, options, warrants or distribution are to be determined, or (B) the initial expiration date set forth in any tender offer or exchange offer for shares of Common Stock or any securities convertible into or exchangeable for Common Stock, or (C) the date on which any such reorganization, reclassification, consolidation, merger, sale, conveyance, dissolution, liquidation or winding up is expected to become effective or consummated, and the date as of which it is expected that holders of record of shares for securities or other property, if any, deliverable upon such reorganization, reclassification, consolidation, merger, sale, conveyance, dissolution, liquidation or winding up are to be determined. Failure to provide such notice shall not affect the validity of any action taken in connection with such dividend, distribution, issuance or subscription rights, or proposed merger, consolidation, sale, conveyance, tender offer, exchange offer, dissolution, liquidation or winding up. SECTION 5. SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF WARRANTS. (a) Subject to the provisions of Section 5(b), this Warrant may be split up, combined or exchanged for another Warrant or Warrants containing the same terms to purchase a like aggregate number of Warrant Shares. If the Warrantholder desires to split up, combine or exchange this Warrant, he, she or it shall make such request in writing delivered to the Company and shall surrender to the Company this Warrant and any other Warrants to be so split up, combined or exchanged. Upon any such surrender for a split up, combination or exchange, the Company shall execute and deliver to the Person entitled thereto a Warrant or Warrants, as the case may be, as so requested. The Company shall not be required to effect any split up, combination or exchange which will result in the issuance of a warrant entitling the Warrantholder to purchase upon exercise a fraction of a share of Common Stock or a fractional Warrant. The Company may require such Warrantholder to pay a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any split up, combination or exchange of Warrants. -8- 9 (b) Neither this Warrant nor the Warrant Shares may be transferred, disposed of or encumbered (any such action, a "Transfer") except in accordance with and subject to the provisions of the Securities Act, any applicable state securities laws and the rules and regulations promulgated thereunder. If at the time of a Transfer, a registration statement is not in effect to register this Warrant or the 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 Warrantholder to make such customary representations and deliver such customary opinions of counsel, and may place such customary legends on certificates representing this Warrant, as may be reasonably required in the opinion of counsel to the Company to permit a Transfer without such registration. (c) Warrantholder shall not sell or otherwise transfer any Warrants to a competitor of the Company engaged or, to the knowledge of Warrantholder, planning to engage in the business of providing wireless voice or data communications services to mobile customers or of providing equipment in connection therewith; provided, however, that nothing in this Section 5 (c) shall restrict the ability of any Warrantholder from selling or transferring any Warrants to a Hughes Subsidiary (as defined in the Credit Agreement) or to any pension or retirement plan which is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act. SECTION 6. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES ISSUABLE. The Exercise Price and the number of Warrant Shares issuable upon the exercise of this Warrant are subject to adjustment from time to time upon the occurrence of the events enumerated in this Section 6. For purposes of this Section 6, "Common Stock" means the Common Stock and any other capital stock of the Company, however designated, for which the Warrants may be exercisable. (a) Adjustment for Change in Capital Stock. If the Company: (i) pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock; (ii) subdivides its outstanding shares of Common Stock into a greater number of shares; (iii) combines its outstanding shares of Common Stock into a smaller number of shares; (iv) makes a distribution on its Common Stock in shares of its capital stock other than Common Stock; or -9- 10 (v) issues by reclassification of its Common Stock any shares of its capital stock, then the Exercise Price and the number and kind of shares of capital stock of the Company issuable upon the exercise of this Warrant (as in effect immediately prior to such action) shall be proportionately adjusted so that the Warrantholder may receive, upon exercise of this Warrant, the aggregate number and kind of shares of capital stock of the Company which he would have owned immediately following such action if this Warrant had been exercised immediately prior to such action. The adjustment shall become effective immediately after the record date, subject to subsection (n) of this Section 6, in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment, a Warrantholder shall be entitled to receive shares of two or more classes or series of capital stock of the Company upon exercise of this Warrant, the Company shall determine the allocation of the adjusted Exercise Price between the classes or series of capital stock. After such allocation, the exercise privilege and the Exercise Price of each class or series of capital stock shall thereafter be subject to adjustment on terms comparable to those applicable to Common Stock in this Section 6. Such adjustment shall be made successively whenever any event listed above shall occur. (b) Adjustment for Rights Issue. If the Company distributes any rights, options or warrants to all holders of its Common Stock entitling them for a period expiring within 60 days after the record date mentioned below to purchase shares of Common Stock or securities convertible into or exercisable or exchangeable for shares of Common Stock at a price per share less than the current market price (as defined below) per share (including, in the case of securities convertible into or exercisable or exchangeable for shares of Common Stock, the consideration payable for such convertible, exercisable or exchangeable security and the minimum consideration per share payable upon the conversion, exercise or exchange of such security into or for Common Stock) on that record date, the Exercise Price shall be adjusted in accordance with the following formula: O + N x P ----- E' = E x M --------- O+ N where: E' = the adjusted Exercise Price. -10- 11 E = the current Exercise Price. O = the number of shares of Common Stock outstanding on the record date. N = the number of additional shares of Common Stock offered. P = the offering price per share of the additional shares. M = the current market price per share of Common Stock on the record date. The adjustment shall be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the record date for the determination of stockholders entitled to receive the rights, options or warrants. If at the end of the period during which such rights, options or warrants are exercisable, not all rights, options or warrants shall have been exercised, the Exercise Price shall be immediately readjusted to what it would have been if "N" in the above formula had been the number of shares actually issued. (c) Adjustment for Other Distributions. If the Company distributes to all holders of its Common Stock any of its assets or debt securities or any rights or warrants to purchase debt securities, assets or other securities of the Company, the Exercise Price shall be adjusted in accordance with the following formula: E' = E x M - F ----- M where: E' = the adjusted Exercise Price. E = the current Exercise Price. M = the current market price per share of Common Stock on the record date mentioned in the immediately succeeding paragraph. F = the fair market value on the record date of the assets, securities, rights or warrants applicable to one share of Common Stock. The Board of Directors of the Company shall determine the fair market value. The adjustment shall be made successively whenever any such distribution is made and shall become effective immediately after the record date for the determination of stockholders entitled to receive the distribution. This subsection (c) does not apply to: -11- 12 (i) rights, options or warrants referred to in subsection (b) of this Section 6, or (ii) cash dividends or cash distributions paid out of consolidated current or retained earnings as shown on the books of the Company prepared in accordance with generally accepted accounting principles other than any Extraordinary Cash Dividend (as defined below). An "Extraordinary Cash Dividend" shall be that portion, if any, of the aggregate amount of all cash dividends paid in any fiscal year which exceeds $25 million. In all cases, the Company shall give the Warrantholders at least 30 days notice of a record date for any dividend payment on its Common Stock. (d) Adjustment for Common Stock Issue. If the Company issues shares of Common Stock for a consideration per share less than the current market price per share on the date the Company fixes the offering price of such additional shares, the Exercise Price shall be adjusted in accordance with the following formula: P -- E' = E x 0 + M ----- A where: E' = the adjusted Exercise Price. E = the then current Exercise Price. O = the number of shares outstanding immediately prior to the issuance of such additional shares. P = the aggregate consideration received for the issuance of such additional shares. M = the current market price per share on the date the Company fixes the offering price of such additional shares. A = the number of shares outstanding immediately after the issuance of such additional shares. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. This subsection (d) does not apply to: -12- 13 (i) any of the transactions described in subsections (a), (b) and (c) of this Section 6, (ii) the conversion, exercise or exchange of securities convertible or exchangeable for Common Stock, (iii) Common Stock issuable upon the exercise of rights or warrants issued to the holders of Common Stock, (iv) Common Stock issued to shareholders of any Person which merges into the Company in proportion to their stock holdings of such Person immediately prior to such merger, upon such merger, (v) Common Stock issued in a bona fide public offering pursuant to a firm commitment underwriting, or (vi) Common Stock issued in a bona fide private placement through a placement agent which is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the current market price attributable to restrictions on transferability of the Common Stock, as determined in good faith by the Board of Directors and described in a Board resolution, shall exceed 20%). (e) Adjustment for Convertible Securities Issue. If the Company issues any securities convertible into or exercisable or exchangeable for Common Stock (other than securities issued in transactions described in subsections (a), (b) and (c) of this Section 6) for a consideration per share (including the minimum consideration per share payable upon conversion, exercise or exchange of any securities convertible into or exercisable or exchangeable for Common Stock) of Common Stock initially deliverable upon conversion, exercise or exchange of such securities less than the current market price per share on the date the Company fixes the offering price of such securities, the Exercise Price shall be adjusted in accordance with this formula: P -- E' = E x 0 + M ----- 0 + D where: E' = the adjusted Exercise Price. E = the then current Exercise Price. O = the number of shares outstanding immediately prior to the issuance of such securities. -13- 14 P = the aggregate consideration received for the issuance of such securities. M = the current market price per share on the date the Company fixes the offering price of such securities. D = the maximum number of shares deliverable upon conversion or exercise of or in exchange for such securities at the initial conversion, exercise or exchange rate. The adjustment shall be made successively whenever any such issuance is made, and shall become effective immediately after such issuance. If all of the Common Stock deliverable upon conversion, exercise or exchange of such securities has not been issued when such securities are no longer outstanding, then the Exercise Price shall promptly be readjusted to the Exercise Price which would then be in effect had the adjustment upon the issuance of such securities been made on the basis of the actual number of shares of Common Stock issued upon conversion, exercise or exchange of such securities. This subsection (e) does not apply to: (i) convertible, exercisable or exchangeable securities issued to shareholders of any Person which merges into the Company, or with a subsidiary of the Company, in proportion to their stock holdings of such Person immediately prior to such merger, upon such merger, (ii) convertible, exercisable or exchangeable securities issued in a bona fide public offering pursuant to a firm commitment underwriting or pursuant to agreements in effect on the date of issuance of this Warrant, (iii) convertible, exercisable or exchangeable securities issued in a bona fide private placement through a placement agent which is a member firm of the National Association of Securities Dealers, Inc. (except to the extent that any discount from the current market price attributable to restrictions on transferability of Common Stock issuable upon conversion, as determined in good faith by the Board of Directors and described in a Board resolution which shall be filed with the Trustee, shall exceed 20% of the then current market price) or (iv) stock options issued to the Company's directors, officers or employees. -14- 15 (f) Adjustment for Tender or Exchange Offer. If the Company or any Subsidiary of the Company consummates a tender or exchange offer for all or any portion of the Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock, to the extent that the cash and value of any other consideration included in such payment per share of Common Stock (determined on an as-converted basis in the case of any such convertible, exercisable or exchangeable securities so tendered or exchanged) exceeds the average of the Quoted Prices (as defined in subsection (g) of this Section 6) of the Common Stock for the five consecutive trading days (the "Adjustment Period") commencing on the first trading day (such trading day, the "First Trading Day") immediately following the last time tenders or exchanges may be made pursuant to such tender or exchange offer (the "Expiration Time"), the Exercise Price shall be adjusted in accordance with this formula: E' = E x 0 x M ----------- P + (A x M) E' = the adjusted Exercise Price. E = the current Exercise Price. O = the number of shares of Common Stock outstanding immediately prior to the Expiration Time, including, in the case of any tender or exchange offer in respect of securities convertible into or exercisable or exchangeable for Common Stock, any shares of Common Stock issuable upon the conversion, exercise or exchange of such securities. M = the average of the Quoted Prices (as defined in subsection (g) of this Section 6) of the Common Stock for the Adjustment Period. P = the aggregate cash consideration and the fair market value of any non-cash consideration payable to stockholders based on the number of shares of Common Stock (or securities convertible into or exercisable or exchangeable for Common Stock) tendered or exchanged (and not withdrawn) in connection with the tender or exchange offer and accepted by the Company. The Board of Directors shall determine the fair market value of any non-cash consideration. A = the number of shares of Common Stock outstanding at the time of acceptance by the Company of any shares of Common Stock (or securities convertible into or exercisable or exchangeable for Common Stock) so tendered or exchanged and accepted by the Company, including, in the case of any tender or exchange offer in respect of securities convertible into or exercisable or exchangeable for Common Stock, any shares of Common Stock issuable upon the conversion, exercise or exchange of such securities. -15- 16 The adjustment shall be made successively whenever any such tender or exchange offer is made. To the extent a Warrantholder exercises such holder's Warrant(s) prior to the conclusion of the Adjustment Period, any adjustment in the number of Warrant Shares issuable upon exercise of such Warrant(s) shall be for the benefit of the holder of record of such Warrant(s) at the close of trading on the First Trading Day. This subsection (f) does not apply to redemptions of securities pursuant to redemption provisions contained in the certificate of designation pertaining to such securities in effect at the time such securities were issued, whether such redemptions are optional or mandatory. (g) Current Market Price. In subsections (b), (c), (d) and (e) of this Section 6, the current market price per share of Common Stock on any date is the average of the Quoted Prices of the Common Stock for 30 consecutive trading days commencing 45 trading days before the date in question. The "Quoted Price" of the Common Stock is the last reported sales price of the Common Stock on any national securities exchange on which the Common Stock is listed which shall be for consolidated trading if applicable to such exchange, or if not so listed, the last reported bid price of the Common Stock (reduced in each case to reflect any dividend for the period during which the Common Stock is traded on an ex-dividend basis). In the absence of one or more such quotations, the Board of Directors of the Company shall determine the current market price on such basis as it in good faith considers appropriate. (h) Consideration Received. For purposes of any computation respecting consideration received pursuant to subsections (d) and (e) of this Section 6, the following shall apply: (i) in the case of the issuance of shares of Common Stock for cash, the consideration shall be the amount of such cash, provided that in no case shall any deduction be made for any commissions, discounts or other expenses incurred by the Company for any underwriting of the issue or otherwise in connection therewith; (ii) in the case of the issuance of shares of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as determined in good faith by the Company's Board of Directors (irrespective of the accounting treatment thereof), whose determination shall be conclusive and described in a Board resolution; and (iii) in the case of the issuance of securities convertible into or exercisable or exchangeable for shares, the aggregate consideration received therefor shall be deemed to be the consideration received by the Company for the issuance of such securities plus the additional minimum consideration, if any, to be received by the Company upon the conversion, exercise or exchange thereof (the consideration in each case to be determined in the same manner as provided in clauses (i) and (ii) of this subsection). -16- 17 (i) When De Minimis Adjustment May Be Deferred. No adjustment in the Exercise Price need be made unless the adjustment would require an increase or decrease of at least 1 % in the Exercise Price. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 6 shall be made to the nearest cent or to the nearest 1/100th of a share, as the case may be. (j) When No Adjustment Required. No adjustment need be made for a transaction referred to in subsections (a), (b), (c), (d), (e) or (f) of this Section 6 if Warrantholders are to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of Common Stock participate in the transaction. No adjustment need be made for (i) a transaction referred to in subsections (b), (d) or (e) of this Section 6 if the below market portion of such issuances, taken together with the below market portions all other issuances and with the above market portions of all tender or exchange offers described in clause (ii) of this paragraph made on and after the date of this Agreement, is less than 2.0% of the Total Market Capitalization (as defined below) of the Company (determined by reference to the sum of the percentages of Total Market Capitalization of the Company attributable to each such transaction on the date thereof) and (ii) a transaction referred to in subsection (f) of this Section 6 if the above market portion of such tender or exchange offers, taken together with the above market portions of all other tender or exchange offers and with the below market portions of all issuances described in clause (i) of this paragraph made on or after the date of this Agreement, is less than 2.0% of the Total Market Capitalization of the Company (determined by reference to the sum of the percentages of Total Market Capitalization of the Company attributable to each such transaction on the date thereof). For purposes of this Agreement, the Total Market Capitalization of the Company shall mean as of any day of determination, the sum of (a) the consolidated indebtedness of the Company and its subsidiaries on such day plus (b) the product of (i) the Company's aggregate number of outstanding primary shares of Common Stock on such day (which shall not include any options or warrants on, or securities convertible or exchangeable into, shares of Common Stock other than any shares of preferred stock of the Company, that, as of the day of determination, cannot, pursuant to the terms thereof as in effect on the date of this Warrant, be required to be redeemed by the Company in cash), and (ii) the average Closing Price of such Common Stock over the 20 consecutive trading days immediately preceding such day, plus (c) the liquidation value of any outstanding shares of preferred stock of the Company on such day. If no such Closing Price exists with respect to shares of any such class, the value of such shares for purposes of clause (b) for the preceding sentence shall be determined by the Company's Board of Directors in good faith. No adjustment need be made for a change in the par value, or from par value to no par value, or from no par value to par value, of the Common Stock. -17- 18 To the extent the Warrants become convertible into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue on the cash. (k) Voluntary Reduction. The Company from time to time may, as the Board of Directors deems appropriate, reduce the Exercise Price by any amount for any period of time if the period is at least 20 days and if the reduction is irrevocable during the period; provided that in no event may the Exercise Price be less than the par value of a share of Common Stock. Whenever the Exercise Price is reduced, the Company shall mail to Warrantholders a notice of the reduction. The Company shall mail the notice at least 15 days before the date the reduced Exercise Price takes effect. The notice shall state the reduced Exercise Price and the period it will be in effect. A voluntary reduction of the Exercise Price pursuant to this Section 6(k), other than a reduction which the Company has irrevocably committed will be in effect for so long as any Warrants are outstanding, does not change or adjust the Exercise Price otherwise in effect for purposes of subsections (a), (b), (c), (d), (e) and (f) of this Section 6. (l) Reorganization of the Company. (i) If the Company consolidates or merges with or into, or transfers or leases all or substantially all its assets to, any Person, upon consummation of such transaction this Warrant shall automatically become exercisable for the kind and amount of securities, cash or other assets which the holder of a Warrant would have owned immediately after the consolidation, merger, transfer or lease if the holder had exercised the Warrant immediately before the effective date of the transaction. Concurrently with the consummation of such transaction, the corporation formed by or surviving any such consolidation or merger if other than the Company, or the Person to which such sale or conveyance shall have been made (any such Person, the "Successor Entity"), shall enter into a supplemental agreement so providing and further providing for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Section 6. The Successor Entity shall mail to the Warrant holder a notice describing the supplemental agreement. If the issuer of securities deliverable upon exercise of this Warrant under the supplemental agreement is an affiliate of the formed, surviving, transferee or lessee corporation, that issuer shall join in the supplemental agreement. (ii) If this subsection (1) applies, subsections (a), (b), (c), (d), (e) and (f) of this Section 6 do not apply. -18- 19 (m) Company Determinations. Any determination that the Company or the Board of Directors must make pursuant to subsection (a), (c), (d), (e), (f), (g), (h) or (j) of this Section 6 may be challenged in good faith by Warrantholders (other than the Company and entities controlled by the Company) that hold HNS Warrants entitling them to purchase more than 50% of the shares of Common Stock issuable upon exercise of HNS Warrants held by all holders other than the Company and entities controlled by the Company (the "Consent Warrantholders") by providing the Company written notice of such challenge within ten (10) business days of the Company providing Warrantholders notice of such determination. Any such challenge shall be resolved by an investment banking firm selected by the Company and reasonably acceptable to the Consent Warrantholders, which resolution shall be conclusive and binding on the Company and the Warrantholders. (n) When Issuance or Payments May Be Deferred. In any case in which this Section 6 shall require that an adjustment in the Exercise Price be made effective as of or immediately after a record date for a specified event, the Company may elect to defer until the occurrence of such event (i) issuing to the holder of any Warrant exercised after such record date the Warrant Shares and other capital stock of the Company, if any, issuable upon such exercise over and above the Warrant Shares and other capital stock of the Company, if any, issuable upon such exercise on the basis of the Exercise Price prior to such adjustment and (ii) paying to such holder any amount in cash in lieu of a fractional share pursuant to Section 8.8 hereof; provided that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional Warrant Shares, other capital stock and cash upon the occurrence of the event requiring such adjustment. (o) Adjustment in Number of Shares. Upon each adjustment of the Exercise Price pursuant to Section 1.5(c) or this Section 6 (other than an adjustment pursuant to Section 6(k) hereof), this Warrant shall thereafter evidence the right to receive upon payment of the adjusted Exercise Price that number of shares of Common Stock (calculated to the nearest hundredth) obtained from the following formula: N' = N x E -- E' where: N' = the adjusted number of Warrant Shares issuable upon exercise of a Warrant by payment of the adjusted Exercise Price. N = the number of Warrant Shares previously issuable upon exercise of this Warrant by payment of the Exercise Price prior to adjustment. E' = the adjusted Exercise Price. E = the Exercise Price prior to adjustment. -19- 20 (p) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Exercise Price or number of Warrant Shares issuable upon exercise hereof pursuant to this Section 6, the Company, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each Warrantholder a certificate prepared by the Company setting forth such adjustment or readjustment and showing in reasonable detail the method of calculation and the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of any Warrantholder, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustment and readjustment, (ii) the Exercise Price at the time in effect, and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of this Warrant. SECTION 7. REGISTRATION RIGHTS 7.1 Definitions. For purposes of this Section 7: (a) The term "RNS WARRANTS" shall mean this Warrant and the other warrants to purchase Common Stock issued to HNS on the date this Warrant was originally issued. (b) The term "HOLDER" means any Person owning or having the right to acquire Registrable Securities. (c) The term "PERSON" shall mean an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof (d) The term "REGISTER", "REGISTERED", and "REGISTRATION" refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document; (e) The term "REGISTRABLE SECURITIES" shall mean the HNS Warrants and the Warrant Shares; provided, however, that (i) the HNS Warrants shall cease to be Registrable Securities when (A) a Registration Statement with respect to the HNS Warrants shall have been declared effective under the Securities Act and such HNS Warrants shall have been disposed of by a Holder pursuant to such Registration Statement, (B) the HNS Warrants may be distributed to the public pursuant to Rule 144(k) (or any similar provision then in force) under the Securities Act or (C) the HNS Warrants shall have ceased to be outstanding and (ii) the Warrant Shares shall cease to be Registrable Securities when (w) if the Holders can resell publicly the Warrant Shares issuable upon exercise of the HNS Warrants without further registration under the Securities Act (as reasonably determined by counsel for the applicable Holder), a Registration Statement with respect to the issuance of the Warrant Shares shall have been declared effective under the Securities Act and such Warrant Shares shall have been issued pursuant to such Registration Statement, (x) if the Holders cannot resell publicly the Warrant Shares issuable upon exercise of the HNS Warrants -20- 21 without further registration under the Securities Act (as reasonably determined by counsel for the applicable Holder), a Registration Statement with respect to the resale of the Warrant Shares shall have been declared effective under the Securities Act and such Warrant Shares shall have been disposed of by a Holder pursuant to such Registration Statement, (y) the Warrant Shares may be distributed to the public pursuant to Rule 144(k) (or any similar provision then in force) under the Securities Act or (z) the Warrant Shares shall have ceased to be outstanding. (f) The term "REGISTRATION STATEMENT" shall mean a "shelf" registration statement of the Company pursuant to the provisions of Section 7.2 of this Agreement covering the resale of the Warrants and the issuance and resale of all of the Warrant Shares on an appropriate form under Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, and in each case including the prospectus contained therein, all exhibits thereto and all material incorporated by reference therein; provided, that, if more than one Registration Statement is required in order to satisfy the registration requirements set forth in this Agreement, the term "Registration Statement" shall refer to all such Registration Statements prepared pursuant to this Agreement, unless the context otherwise requires. (g) The term "SEC" shall mean the Securities and Exchange Commission. 7.2 Registration Under the Securities Act. The Company shall file and shall use all reasonable efforts to cause a Registration Statement pertaining to the Registrable Securities to be declared effective by the SEC prior to September 30, 1996. The Company agrees to use all reasonable efforts to keep the Registration Statement continuously effective until the earlier of October 27, 2003 and such date that no Registrable Securities are issuable or outstanding (the "Registration Period"). The Company further agrees to supplement or amend the Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for the Registration Statement or by the Securities Act or by any other rules and regulations thereunder for shelf registration or if reasonably requested by a Holder with respect to information relating to such Holder in order to accurately reflect information regarding such Holder or such Holder's plan of distribution as required by the Registration Statement, and to use all reasonable efforts to cause any such amendment to become effective and such Registration Statement to become usable as soon as thereafter practicable. The Company agrees to furnish to the Holders copies of any such supplement or amendment promptly after its being made available for use or filed with the SEC. 7.3 Obligations of the Company. Whenever required under this Section 7 to effect the registration of any Registrable Securities, the Company shall, during the Registration Period and within the time limits set forth in this Section 7, or if no specific time limit is specified, as expeditiously as reasonably possible: (a) use its best efforts to keep such Registration Statement continuously effective. Upon the occurrence of any event that would cause any such Registration Statement or the -21- 22 prospectus contained therein (i) to contain a material misstatement or omission or (ii) not to be effective and usable for the issuance and resale of Registrable Securities during the Registration Period, the Company shall file promptly an appropriate amendment to such Registration Statement or file appropriate documents that will be so incorporated by reference, (A) in the case of clause (i), correcting any such misstatement or omission, and (B) in the case of either clause (i) or (ii), use all reasonable efforts to cause such amendment to be declared effective and such Registration Statement and the related prospectus to become usable for their intended purpose(s) as soon as practicable thereafter; (b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement as may be necessary to keep the Registration Statement effective for the Registration Period; cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act and to comply fully with Rule 424, as applicable, under the Securities Act in a timely manner; and comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the Registration Period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the prospectus; the Company shall not be deemed to have used all reasonable efforts to keep a Registration Statement effective during the Registration Period if it voluntarily takes any action that would result in Holders of the Registrable Securities covered thereby not being able to sell Registrable Securities or the Company not being able to issue Warrant Shares, in each case, pursuant to the Registration Statement and during that period unless such action is required or advisable under applicable law or the action is for a valid business purpose in the interest of the Company and its effect on the Registration Statement is not the purpose of the action; (c) advise Holders promptly and, if requested by such Holders, confirm such advice in writing, (1) when the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to any Registration Statement or any post-effective amendment thereto, when the same has become effective, (2) of any request by the SEC for amendments to the Registration Statement or amendments or supplements to the prospectus or for additional information relating thereto, (3) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, (4) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time during the Registration Period the SEC shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory -22- 23 authority shall issue an order suspending the qualification or exemption from qualification of the Registrable Securities under state securities or blue sky laws, the Company shall use its best efforts to obtain the withdrawal or lifting of such order at the earliest practicable time; (d) make available to each selling Holder named in any Registration Statement or prospectus before filing with the SEC copies of any Registration Statement or any prospectus included therein or any amendments or supplements to any such Registration Statement or prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), portions of which relating to such Holders or their plan of distribution (the "Covered Provisions") will be subject to the review and comment of such Holders for a period of three business days, and the Company will not file any such Registration Statement or prospectus or any amendment or supplement to any such Registration Statement or prospectus and will correct all of the Covered Provisions to which the selling Holders covered by such Registration Statement shall reasonably object within three business days after the receipt thereof. A selling Holder shall be deemed to have reasonably objected to such filing of such Registration Statement, amendment, prospectus or supplement, as applicable, as proposed to be filed, if the Covered Provision contains a material misstatement or omission or fails to comply with the applicable requirements of the Securities Act; (e) promptly upon the filing of any document that is to be incorporated by reference into a Registration Statement or prospectus, make available copies of such document to the selling Holders, make the Company's representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such selling Holders reasonably may request; (f) make available at reasonable times for inspection by the selling Holders and any attorney or accountant retained by such selling Holders, all financial and other records, pertinent corporate documents and properties of the Company and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Holder, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; provided, that, any Person to whom information is provided under this clause (f) agrees in writing to maintain the confidentiality of such information to the extent such information is not in the public domain; (g) if requested by any selling Holders, promptly include in any Registration Statement or prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such selling Holders may reasonably request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Registrable Securities, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be included in such prospectus supplement or post-effective amendment; -23- 24 (h) furnish to each Holder, without charge, at least one copy of the Registration Statement, as first filed with the SEC, and of each amendment thereto; (i) deliver to each selling Holder, without charge, as many copies of the prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Holder reasonably may request; the Company hereby consents to the use of the prospectus and any amendment or supplement thereto by each of the selling Holders in connection with the offering and the sale of the Registrable Securities covered by the prospectus or any amendment or supplement thereto; (j) furnish to each selling Holder, upon the effectiveness of the Registration Statement: (i) a certificate, dated the date of effectiveness of the Registration Statement, signed by (x) the President or any Vice President and (y) a principal financial or accounting officer of the Company, confirming, as of the date thereof, the matters set forth in Section 3.2 (iv)(a) and (b) of the Credit Agreement; (ii) an opinion, dated the date of the effectiveness of the Registration Statement, of counsel for the Company, covering (A) a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and representatives of the independent public accountants for the Company and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing (relying as to materiality to a large extent upon facts provided to such counsel by officers and other representatives of the Company and without independent check or verification), no facts came to such counsel's attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the prospectus contained in such Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (B) such other matters of the type customarily covered in opinions of counsel for an issuer in connection with similar securities offerings, as may reasonably be requested by such parties. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial, statistical and accounting data included in any Registration Statement contemplated by this Section 7 or the related prospectus; -24- 25 (iii) a customary comfort letter, dated as of the date of effectiveness of the Registration Statement, from the Company's independent accountants, in the customary form and covering matters of the type customarily covered in such comfort letters; and (iv) such other documents and certificates as may be reasonably requested by such parties to evidence compliance with clauses (i)-(iii) above. The above shall be done in connection with the filing of the Registration Statement and if at any time the representations and warranties of the Company contemplated in (i) above cease to be true and correct, the Company shall so advise the selling Holders promptly and if requested by such Persons, shall confirm such advice in writing; (k) prior to any public offering of Registrable Securities, cooperate with the Holders and their respective counsel in connection with the registration and qualification of the Registrable Securities under the securities or blue sky laws of such jurisdictions as the selling Holders may reasonably request and use its best efforts to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the applicable Registration Statement; provided, however, that the Company shall not be required to register or qualify as a foreign corporation where it is not now so qualified or where its principal executive offices are not currently located or to take any action that would subject it to service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (l) in connection with any sale of Registrable Securities that will result in such securities no longer being Transfer Restricted Securities (as defined below), cooperate with the selling Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and to register such Registrable Securities in such denominations and such names as the Holders may request at least two business days prior to such sale of Registrable Securities. For purposes of this Section 7, "Transfer Restricted Securities" shall mean the Warrants and Warrant Shares until such Warrants or Warrant Shares, as applicable, (i) have been effectively registered under the Securities Act and disposed of in accordance with the Registration Statement covering it, (ii) are distributed to the public pursuant to Rule 144 under the Securities Act, (iii) may be sold or transferred pursuant to Rule 144(k) (or any similar provisions then in force) under the Securities Act or otherwise or (iv) may be sold freely in full in any one three month period before Rule 144(k) is available; (m) use its best efforts to cause the Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Registrable Securities, subject to the proviso contained in clause (k) above; (n) if any fact or event contemplated by clause (c)(4) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related -25- 26 prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Registrable Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (o) provide a CUSIP number for all Registrable Securities not later than the effective date of a Registration Statement covering such Registrable Securities; (p) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC, and make generally available to its security holders with regard to the Registration Statement, as soon as practicable, but in any event within sixteen months of the effectiveness of the Registration Statement, a consolidated earnings statement meeting the requirements of Rule 158 under the Securities Act (which need not be audited) covering a twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in paragraph (c) of such Rule 158); and (q) cause all Registrable Securities covered by the Registration Statement to be listed on each securities exchange on which similar securities issued by the Company are then listed if requested by the Holders of a majority in aggregate principal amount of Registrable Securities. For purposes of this Section 7.3(q), the HNS Warrants shall not be deemed to be securities which are similar to the Company's Common Stock. 7.4 Restrictions on Holders. Each Holder agrees by acquisition of a Registrable Security that, upon receipt of any notice from the Company of the existence of any fact of the kind described in Section 7.3(c)(4) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 7.3(n) hereof, or until it is advised in writing (the "Advice") by the Company that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the prospectus. If so directed by the Company, each Holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Holder's possession, of the prospectus covering such Registrable Securities that was current at the time of receipt of such notice. In the event the Company shall give any such notice, the time period regarding the effectiveness of such Registration Statement set forth herein shall be extended by the number of days during the period from and including the date of the giving of such notice pursuant to Section 7.3(c)(4) hereof to and including the date when each selling Holder covered by such Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 7.3(c)(4) hereof or shall have received the Advice. 7.5 Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 7 with respect to the Registrable Securities of any selling Holder that such Holder shall have furnished to the Company such information regarding -26- 27 itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be reasonably required to effect the registration of such Holder's Registrable Securities. 7.6 Expenses of Registration. All expenses (other than selling discounts and commissions) incurred by the Company in connection with registrations, filings or qualifications pursuant to this Section 7 (including without limitation all registration, filing and qualification fees, printers, and accounting fees and fees and disbursements of counsel for the Company) shall be borne by the Company. 7.7 Indemnification and Contribution. In connection with a Registration Statement covering the resale of HNS Warrants or Warrant Shares under this Section 7: (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, any underwriter (as defined in the Securities Act) and each Person if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act against any losses, claims, damages or liabilities (joint or several) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation") incurred in connection with the resale of Registrable Securities: (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement, including any preliminary prospectus (but only if such is not corrected in the final prospectus and copies of such final prospectus have been provided to the Holders)) contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading (but only if such is not corrected in the final prospectus and copies of such final prospectus have been provided to the Holders), or (iii) any violation or alleged violation by the Company in connection with the registration of Registrable Securities under the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will pay to each such Holder, underwriter or controlling Person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 7.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable to any such Holder, underwriter or controlling Person in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, underwriter or controlling Person. (b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the Registration Statement, each Person, if any who controls the Company within the meaning of the Securities Act, -27- 28 any underwriter, any other Holder selling securities in such Registration Statement and any controlling Person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any Person intended to be indemnified pursuant to this Section 7.7(b), in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Section 7.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld. (c) Promptly after receipt by an indemnified party under Section 7.7(a) or (b) of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 7.7, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall, jointly with any other indemnifying party similarly noticed, assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party who is a named party in such action shall have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would, in the reasonable opinion of counsel to the indemnifying party, be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding, it being understood, however, that the indemnifying party shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time for such indemnified party and any other indemnified parties, which firm shall be designated in writing by such indemnified parties. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if materially prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 7.7(a) and 7.7(b), but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability (including contribution pursuant to Section 7.7(d) hereof) that it may have to any indemnified party other than under Section 7.7(a) or (b). (d) In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 7.6(a) is applicable but for any reason is held to be unavailable from the Company with respect to all Holders or any Holder, the Company and the Holder or Holders, as the case may be, shall contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claims asserted) to which the -28- 29 Company and one or more of the Holders may be subject in such proportion as is appropriate to reflect the relative fault of the Company on the one hand, and the Holder or Holders on the other, in connection with statements or omissions which resulted in such losses, claims, damages or liabilities. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with the sale of Registrable Securities shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. Each Person, if any, who controls a Holder within the meaning of the Securities Act shall have the same rights to contribution as such Holder. (e) The obligations of the Company and Holders under this Section 7.6 shall survive the completion of any offering of Registrable Securities in a Registration Statement under this Section 7 or otherwise. SECTION 8. MISCELLANEOUS. 8.1 Entire Agreement. This Warrant and the Loan Agreement dated as of December 21, 1996 by and among Finance Corporation, Geotek and Hughes Network Systems, Inc. (as the same may have been or hereinafter may be amended) constitute the entire agreement between the Company and the Warrantholder with respect to this Warrant and the Warrant Shares. 8.2 Binding Effects; Benefits. This Warrant shall inure to the benefit of and shall be binding upon the Company, the Warrantholder and holders of Warrant Shares and their respective heirs, legal representatives, successors and assigns. Nothing in this Warrant, expressed or implied, is intended to or shall confer on any Person other than the Company, the Warrantholder and holders of Warrant Shares, or their respective heirs, legal representatives, successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Warrant or the Warrant Shares. 8.3 Amendments and Waivers. This Warrant may not be modified or amended except by an instrument in writing signed by the Company and the Warrantholders that hold Warrants entitling them to purchase at least 50% of the Warrant Shares entitled to be purchased by all Warrantholders. Notwithstanding the foregoing, the Company, any Warrantholder or holders of Warrant Shares may, by an instrument in writing, waive compliance by the other party with any term or provision of this Warrant on the part of such other party hereto to be performed or complied with; provided, however, that such waiver shall only be effective against the Person delivering such waiver. The waiver by any such party of a breach of any term or provision of this Warrant shall not be construed as a waiver of any subsequent breach. 8.4 Section and Other Headings. The section and other headings contained in this Warrant are for reference purposes only and shall not be deemed to be a part of this Warrant or to affect the meaning or interpretation of this Warrant. -29- 30 8.5 Further Assurances. Each of the Company, the Warrantholders and holders of Warrant Shares shall do and perform all such further acts and things (including, without limitation, any required filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) and execute and deliver all such other certificates, instruments and/or documents (including without limitation, such proxies and/or powers of attorney as may be necessary or appropriate) as any party hereto may, at any time and from time to time, reasonably request in connection with the performance of any of the provisions of this Warrant. 8.6 Notices. All demands, requests, notices and other communications required or permitted to be given under this Warrant shall be in writing and shall be deemed to have been duly given on the date delivered if delivered personally or three business days after being sent (or, in the case of a Mandatory Exercise Notice, when the last notice required to be sent to HNS or Hughes Electronics Corporation pursuant to Section 1.5(a) hereof is sent) if sent by United States certified or registered first class mail, postage prepaid, or one business day after dispatch by recognized overnight carrier (provided delivery is confirmed by the courier) to the parties hereto at the following addresses or at such other address as any party hereto shall hereafter specify by notice to the other party hereto: (a) if to the Company, addressed to: Geotek Communications, Inc. 20 Craig Road Montvale, New Jersey 07645 Attention: President (b) if to any Warrantholder or holder of Warrant Shares, addressed to the address of such Person appearing on the books of the Company (subject to Section 1.5(a) hereof). 8.7 Separability. Any term or provision of this Warrant which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable any other term or provision of this Warrant or affecting the validity or enforceability of any of the terms or provisions of this Warrant in any other jurisdiction. 8.8 Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. With respect to any fraction of a share called for upon any exercise hereof, the Company shall pay to the Warrantholder an amount in cash equal to such fraction multiplied by the current market price (as determined as of the date of exercise) of a share of such stock as of the date of such exercise. 8.9 Rights of the Holder. The Warrantholder shall not, solely by virtue of this Warrant, be entitled to any rights of a stockholder of the Company, either at law or in equity. -30- 31 8. 10 Governing Law. This Wan-ant shall be governed by and construed in accordance with the laws of the State of New York, without regard to such State's internal conflicts of laws principles. IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly authorized OFFICER. GEOTEK COMMUNICATIONS, INC. By: /s/ MICHAEL McCOY ------------------------------------------ Name: Michael McCoy Title: Chief Financial Officer Dated: September 27, 1996 -31- 32 ASSIGNMENT (To be executed only upon assignment of Warrant Certificate) For value received,___________________________hereby sells, assigns and transfers unto______________________________________________the within Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint_____________________________ attorney, to transfer said Warrant Certificate on the books of the within-named Company with respect to the number of Warrant Shares set forth below, with full power of substitution in the premises: Name(s) of Assignee(s) Address No. of Warrant Shares ----------- ------- --------------------- And if said number of Warrant Shares shall not be all the Warrant Shares represented by the Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the Warrant Shares represented by said Warrant Certificate. Dated:_____________________, 19__ _______________________________________________ Note: The above signature should correspond exactly with the name on the face of this Warrant Certificate. -32- 33 SUBSCRIPTION FORM (To BE EXECUTED UPON EXERCISE OF WARRANT PURSUANT TO SECTION 1.1(a)) The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate for, and to purchase thereunder,_________ shares of Common Stock, as provided for therein, and agrees to deliver, within four (4) trading days after the date hereof, payment in full of the Exercise Price in the amount of $ as follows: Cash or Wire Transfer $__________ Certified or Official bank check $__________ Amount of past due Obligations under the Credit Agreement to be applied against the Exercise Price $__________ Upon receipt of the full Exercise Price, please issue a certificate or certificates for such Common Stock in the name of, and pay any cash for any fractional share to: Name:____________________________________ Address:_________________________________ _________________________________ _________________________________ _________________________________ Social Security No.: _________________________________ (Please Print Name, Address and Social Security No.) Signature:______________________________________ NOTE: The above signature should correspond exactly with the name on the first page of this Warrant Certificate or with the name of the assignee appearing in the assignment from delivered herewith. And if said number of shares shall not be all the shares purchasable under the within Warrant Certificate, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable thereunder rounded up to the next higher number of shares. -33- EX-99.VII 8 REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT VII [EXECUTION COPY] REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "Agreement") is made and entered into as of September 27, 1996, by and among GEOTEK FINANCING CORPORATION, a Delaware corporation (the "Company"), GEOTEK COMMUNICATIONS, INC., a Delaware corporation (the "Guarantor"), and HUGHES NETWORK SYSTEMS, INC., a Delaware corporation ("HNS"), as the holder of the Notes referred to below on the date hereof. This Agreement is made pursuant to the Vendor Credit Financing Agreement (the "Financing Agreement"), dated as of September __, 1996, by and among the Company, the Guarantor and HNS, in order to induce HNS to enter the Financing Agreement and make the Advances (as defined in the Financing Agreement) as evidenced by the Notes (as defined herein). Capitalized terms not otherwise defined herein shall have the meanings given to them in the Financing Agreement. 1. Definitions As used in this Agreement, the following capitalized terms shall have the following meanings: Additional Securities: See Section 5 hereof. Covered Provisions: See Section 6(c) hereof. Exchange Act: The Securities Exchange Act of 1934, as amended from time to time. Geotek Guarantee: The Guarantee by the Guarantor of the obligations of the Company under the Financing Agreement and the Notes being issued pursuant to the Financing Agreement, and any Guarantee issued in exchange or substitution therefor. Guarantee: A guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any indebtedness. HNS Registration Expenses: See Section 7(a) hereof. Indemnified Holder: See Section 8(a) hereof. Indenture: See Section 6(a) hereof. Issuer Registration Expenses: See Section 7(b) hereof. Issuers: Collectively, the Company and the Guarantor. NASD: National Association of Securities Dealers, Inc. 1995 Indenture: The indenture, dated as of June 30, 1995, between the Guarantor and IBJ Schroder Bank & Trust Company, as trustee, governing the terms of the Guarantor's 15% Senior Secured Discount Notes due 2005. Notes: The Notes being issued pursuant to the Financing Agreement, and any debt securities issued in exchange or substitution for the Notes. 2 Person: An individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. Prospectus: The prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus. Registration: See Section 3(a) hereof. Registration Notice: See Section 3(a)(i) hereof. Registration Request: See Section 3(a) hereof. Registrable Securities: The Notes and the Geotek Guarantees issued with such Notes; provided that a security ceases to be a Registrable Security when it is no longer a Transfer Restricted Security. Registration Statement: Any registration statement of the Issuers which covers Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such Registration Statement. Requesting Holders: See Section 3(a) hereof. Restated Notes: See Section 6(a) hereof. Securities Act: The Securities Act of 1933, as amended from time to time. SEC: The Securities and Exchange Commission. Transfer Restricted Securities: The Notes and the Geotek Guarantees issued with such Notes acquired by the holder thereof other than pursuant to an effective registration under Section 5 of the Securities Act or pursuant to Rule 144 thereunder; provided that a Note and the Geotek Guarantee issued with such Note that has ceased to be a Transfer Restricted Security cannot thereafter become a Transfer Restricted Security. Trust Indenture Act: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) and all rules and regulations promulgated thereunder, as in effect on the date on which the Indenture is qualified under the Trust Indenture Act. Trustee: See Section 6(b) hereof. 2 3 2. Securities Subject to this Agreement. (a) Registrable Securities. The securities entitled to the benefits of this Agreement are the Registrable Securities. (b) Holders of Registrable Securities. A Person is deemed to be a holder of Registrable Securities whenever such Person owns Registrable Securities. 3. Registration. (a) Request for Registration. At any time on or after April 1, 1999, the holders (the "Requesting Holders") of an aggregate of at least 25% in aggregate principal amount of the outstanding Registrable Securities may deliver a written request (a "Registration Request") to the Issuers requiring the Issuers to effect a registration of the Registrable Securities and indicating the proposed method or methods of distribution thereof (the "Registration"). Subject to Section 4(a)(ii) hereof, upon receipt of a Registration Request, the Issuers shall: (i) promptly give written notice of the proposed Registration to all holders of Registrable Securities (a "Registration Notice"), which notice shall indicate (A) that the Issuers intend to file a Registration Statement with the SEC covering the Registrable Securities, (B) the proposed method or methods of distribution thereof and (C) that any holder of Registrable Securities who wishes to have the Registrable Securities owned by it included in such Registration Statement must so notify the Issuers within 30 days of receipt of such Registration Notice; (ii) in the event holders of at least 50% in aggregate principal amount of the outstanding Registrable Securities elect to participate in such Registration, as soon as practicable, file a Registration Statement with the SEC covering all of the Registrable Securities held by the Requesting Holders and by all other holders of Registrable Securities who notify the Company pursuant to Section 3(a)(i) of their desire to have their Registrable Securities included in such Registration Statement; (iii) use their best efforts to have such Registration Statement declared effective as soon as practicable, but in any event within 135 days after receipt of the Registration Request, and otherwise effect such registration (including, without limitation, the execution of an undertaking to file post-effective amendments, appropriate qualification under the applicable blue sky or other state securities laws and appropriate compliance with exemptive regulations issued under the Securities Act and any other governmental requirements or regulations) and take such other actions as may be reasonably necessary to permit or facilitate the sale and distribution of such Registrable Securities in accordance with the intended method or methods of disposition thereof; and (iv) keep such Registration Statement effective for 120 days. (b) Number of Registrations. The Issuers are not obligated to effect more than two Registrations under this Agreement; provided that a Registration will not count as a Registration under this Agreement until a Registration Statement with respect thereto has become effective and has remained effective for 120 days or until all Registrable Securities included therein have been sold, if earlier. 3 4 (c) Term of Agreement. This Agreement shall be effective until the longer of (i) three years from the date hereof and (ii) the date 75% in aggregate principal amount of the Notes have been sold at least once pursuant to a Registration Statement. (d) Selection of Underwriters. If the Registration is to be in the form of an underwritten offering, the investment banker or bankers and manager or managers that will administer the offering shall be selected by the holders of a majority in aggregate principal amount of the Registrable Securities to be included in such offering, subject to the consent of the Issuers (which consent shall not be unreasonably withheld). 4. Hold-Back Agreements (a) Restrictions on Public Sale by Holder of Registrable Securities. (i) Each holder of Registrable Securities whose Registrable Securities are covered by a Registration Statement filed pursuant hereto agrees, if requested in writing by the managing underwriters in an underwritten offering, not to effect any public sale or distribution of debt securities of the Issuers of the same class as the debt securities included in such Registration Statement, including a sale pursuant to Rule 144 or Rule 144A under the Securities Act (except as part of such underwritten registration), during the 7-day period prior to, and during the 90-day period following, the effective date of the Registration Statement for any underwritten offering made pursuant to such Registration Statement. The foregoing provisions shall not apply, however, to any holder of Registrable Securities if such holder is prevented by an applicable statute or regulation from entering into any such agreement. (ii) The Issuers may postpone for a reasonable period of time, not to exceed 120 days, the filing or effectiveness of a Registration requested pursuant to this Agreement if the boards of directors of the Issuers in good faith determine that (A) such Registration might have a material adverse effect on any plan or proposal by either Issuer or any of their respective subsidiaries with respect to any financing, acquisition, recapitalization, reorganization or other material transaction or (B) either Issuer is in possession of material nonpublic information that, if publicly disclosed, could result in a material disruption of a major corporate development or transaction then pending or in progress or in any other material adverse consequences to either Issuer; provided, however, that as soon as the conditions permitting such delay no longer exist, the Issuers shall give notice of such fact to the holders of Registrable Securities who have requested such Registration, and shall proceed with the Registration unless the holders of a majority in aggregate principal amount of such Registrable Securities shall have elected, at any time prior to the close of business on the fifth business day after such notice from the Issuers, to withdraw their request for Registration, and provided further, that the Issuers may postpone a Registration not more than once in any 365 day period. (b) Restrictions on Public Sale by the Issuers and Others. The Issuers agree: (i) not to register (including in a Registration Statement filed pursuant hereto) or effect any public sale (other than a public sale of debt securities offered in exchange for existing debt securities) or distribution (or any private sale which contemplates a substantially contemporaneous resale pursuant to Rule 144A) of their debt securities that are substantially similar to the Registrable Securities during the 7-day period prior to, and during the 90-day period following, the effective date of the Registration Statement for each underwritten offering made pursuant to 4 5 a Registration Statement filed pursuant hereto, except with the consent of the managing underwriter for such offering; and (ii) to cause each holder of their privately placed debt securities that are substantially similar to the Registrable Securities issued by the Issuers at any time on or after the date of this Agreement to agree not to effect any public sale or distribution, including a sale pursuant to Rule 144 under the Securities Act, of any such securities during the period set forth in clause (i) above, except with the consent of the managing underwriter for such offering. 5. Incidental Registration. The Issuers and, at the Issuers' election, any other holders of debt securities with registration rights may include in any Registration requested pursuant to this Agreement any debt securities that it or they shall determine to include (the "Additional Securities") and the consent of the holders of the Registrable Securities shall not be required with respect thereto; provided, however, that if in the opinion of the managing underwriter of such offering inclusion in such Registration of all Additional Securities would interfere with the successful marketing of the Registrable Securities, the number of Additional Securities shall be reduced to such number as such managing underwriter advises could be included in such underwriting without interfering with the successful marketing of the Registrable Securities. 6. Registration Procedures. In connection with the Issuers' registration obligations pursuant hereto, the Issuers shall use their best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Issuers shall as expeditiously as possible: (a) enter into an amendment and restatement of the Financing Agreement (as so amended and restated, the "Indenture") and the Notes (as so amended and restated, the "Restated Notes") to conform the Indenture and the Restated Notes to the requirements of the Trust Indenture Act and to make such other modifications as the holders of a majority in aggregate principal amount of the Registrable Securities to be included in the first Registration to be effected hereunder shall require to facilitate the disposition thereof; provided, however, that the Issuers shall not be required to include in the Indenture or the Restated Notes any provision not contained in or that is more restrictive to or burdensome on the Issuers (except as required by the Trust Indenture Act or any other applicable securities laws) than any provision in the most restrictive or most burdensome (with respect to such provision) of (i) the Financing Agreement and the Notes, (ii) the 1995 Indenture and the securities issued thereunder, in each case as in effect on the date hereof, and (iii) any other indenture governing outstanding public debt securities of either of the Issuers then in effect, and provided further, that the Issuers shall not be required to provide any additional credit support in the form of additional guarantees, pledges, granting of security interests or otherwise other than such credit support as is included in the Financing Agreement; (b) appoint a trustee to serve under the Indenture (the "Trustee"), which Trustee shall be reasonably acceptable to the holders of a majority in aggregate principal amount of the Registrable Securities to be included in the first Registration to be effected hereunder; (c) make available to each selling holder named in any Registration Statement or Prospectus before filing with the SEC, copies of any Registration Statement or Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents 5 6 incorporated by reference after the initial filing of such Registration Statement), portions of which relating to such holders or their plan of distribution (the "Covered Provisions") will be subject to the review and comment of such holders for a period of three business days, and the Issuers will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus and will correct all of the Covered Provisions to which the selling holders covered by such Registration Statement shall reasonably object within three business days after the receipt thereof; provided, however, the Issuers shall not be obligated to file such Registration Statement or Prospectus or such amendment or supplement to such Registration Statement or Prospectus, as applicable, unless the Issuers, a majority of the selling holders of Registrable Securities and the underwriters, if any, are able to agree on the filing of such document. A selling holder shall be deemed to have reasonably objected to such filing of such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, if the Covered Provision contains a material misstatement or omission or fails to comply with the applicable requirements of the Securities Act; (d) prepare and file with the SEC such amendments and post-effective amendments to any Registration Statement, and such supplements to the Prospectus, as may be required by the rules, regulations or instructions applicable to the registration form utilized by the Issuers or by the Securities Act or otherwise necessary to keep such Registration Statement effective until the earlier of (i) such time as all of the Registrable Securities included in such Registration Statement have been disposed of in accordance with the method or methods of distribution set forth in such Registration Statement and (ii) the last date of the applicable period set forth in Section 3(a)(iv) hereof, and cause the Prospectus as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period set forth in Section 3(a)(iv) hereof in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (e) notify the selling holders of Registrable Securities and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such advice in writing: (i) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC for amendments or supplements to the Registration Statement or the Prospectus or for additional information; (iii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iv) if at any time when the Prospectus relating to the Registrable Securities included in such Registration is required to be delivered under the Securities Act the representations and warranties of the Issuers contemplated by Section 6(q)(i) hereof cease to be true and correct; (v) of the receipt by the Issuers of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and 6 7 (vi) of the existence of any fact of which the Issuers become, or reasonably should have become, aware which fact results in the Registration Statement, the Prospectus or any document incorporated therein by reference containing an untrue statement of material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (f) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement at the earliest practicable time; (g) if reasonably requested by the managing underwriter or underwriters or a holder of Registrable Securities being sold in connection with an underwritten offering, immediately incorporate in a Prospectus supplement or post-effective amendment such necessary information as the managing underwriters or the holders of a majority in aggregate principal amount of the Registrable Securities being sold reasonably request to have included therein relating to the plan of distribution with respect to such Registrable Securities, including, without limitation, information with respect to the amount of Registrable Securities being sold to such underwriters, the purchase price being paid therefor by such underwriters and with respect to any other terms of the underwritten (or best efforts underwritten) offering of the Registrable Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable following notification to the Issuers of the matters to be incorporated in such Prospectus supplement or post-effective amendment; (h) at the request of any selling holder of Registrable Securities, furnish to such selling holder of Registrable Securities and each managing underwriter, without charge, at least one conformed copy of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (i) deliver to each selling holder of Registrable Securities and the underwriters, if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons may reasonably request; the Issuers consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling holders of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto in accordance with the method or methods of distribution set forth therein; (j) prior to any public offering of Registrable Securities, register or qualify or cooperate with the selling holders of Registrable Securities, the underwriters, if any, and their respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions as any seller or underwriter reasonably requests in writing and use their commercially reasonable best efforts to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided that neither Issuer shall be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified, (ii) take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject or (iii) subject it to taxation in any such jurisdiction where it is not then so subject; (k) cooperate with the selling holders of Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such 7 8 denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of Registrable Securities to the underwriters; (l) use their best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof and the underwriters, if any, to consummate the disposition of such Registrable Securities; (m) if any fact contemplated by Section 6(e)(vi) hereof shall exist, prepare a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (n) cause all Registrable Securities covered by the Registration Statement to be listed on each securities exchange on which similar securities issued by the Issuers are then listed, if requested by the holders of a majority in aggregate principal amount of such Registrable Securities or by the managing underwriters, if any; (o) cause the Registrable Securities covered by the Registration Statement to be rated with the appropriate rating agencies, if so requested by the holders of a majority in aggregate principal amount of such Registrable Securities or the managing underwriters, if any; (p) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable trustee(s) or transfer agent(s) with printed certificates for the Registrable Securities which are in a form eligible for deposit with Depositary Trust Company; (q) enter into agreements (including underwriting agreements) in form, scope and substance as are customarily entered into by issuers in similar transactions and take all other appropriate actions reasonably requested by holders of a majority in aggregate principal amount of Registrable Securities included in such Registration in order to expedite or facilitate the disposition of such Registrable Securities in accordance with the method or methods of distribution set forth in such Registration Statement and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration: (i) make such representations and warranties to the holders of such Registrable Securities and the underwriters, if any, in form, scope and substance as are customarily made by issuers to underwriters in primary underwritten offerings including, but not limited to, those set forth in the Financing Agreement; (ii) obtain opinions of counsel to the Issuers and updates thereof (which counsel and opinions shall be reasonably satisfactory in form, scope and substance to the managing underwriters, if any, and the holders of a majority in aggregate principal amount of the Registrable Securities being sold), dated as of the applicable closing date, addressed to each selling holder and the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such holders and underwriters; 8 9 (iii) obtain "cold comfort" letters, dated as of the effective date of the applicable Registration Statement, and updates thereof from the Issuers' independent certified public accountants addressed to the selling holders of Registrable Securities and the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters to underwriters in connection with primary underwritten offerings; (iv) if an underwriting agreement is entered into, cause the same to set forth in full the indemnification provisions and procedures of Section 8 hereof (or such other substantially similar provisions and procedures as the underwriters shall reasonably request) with respect to all parties to be indemnified pursuant to said Section; and (v) deliver at the applicable closing such documents and certificates as are customary for underwritten offerings to evidence compliance with the conditions contained in the underwriting agreement or other agreement entered into by the Issuers. (r) make available to a representative of the holders of a majority in aggregate principal amount of the Registrable Securities, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney or accountant retained by the sellers or underwriter in connection with such Registration Statement, or any post-effective amendment thereto subsequent to the filing and prior to the effectiveness thereof, all financial and other records, pertinent corporate documents and properties of the Issuers, and cause the Issuers' officers, directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with the registration, with respect to each at such time or times as the Issuers shall reasonably determine; provided that any records, information or documents that are designated by the Issuers in writing as confidential shall be kept confidential by such Persons unless disclosure of such records, information or documents is required by court or administrative order and each such Person shall execute a confidentiality agreement in form and substance satisfactory to the Issuers; and provided, further, that nothing in this Agreement shall require any officers, directors or employees of either Issuer to participate in any "road show" or any presentations to any potential purchasers of Registrable Securities, except as set forth in Section 6(v) hereof; (s) otherwise use their best efforts to comply with all applicable rules and regulations of the SEC, and make generally available to their security holders with regard to the Registration Statement, as soon as practicable, but in any event within sixteen months of the effectiveness of the Registration Statement, a consolidated earnings statement meeting the requirements of Rule 158 under the Securities Act (which need not be audited) covering a twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in paragraph (c) of such Rule 158); (t) cooperate and assist in any filings required to be made with the NASD and in the performance of any due diligence investigation by any underwriter (including any "qualified independent underwriter" that is required to be retained in accordance with the rules and regulations of the NASD); (u) promptly upon the filing of any document which is to be incorporated by reference into the Registration Statement or the Prospectus (after initial filing of the Registration Statement) provide copies of such document to counsel to the selling holders of Registrable Securities and to the managing underwriters, if any, make the Issuers' representatives available for discussion of such document and make such changes in such document as counsel for such selling holders or underwriters may reasonably request; and 9 10 (v) upon the reasonable advance request of a majority of the selling holders, make available its senior officers for telephone conferences with investors in connection with the sale of the Notes pursuant to a Registration Statement; provided that such telephone conferences do not unreasonably disrupt the normal business operations of the Issuers. The Issuers may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Issuers such information regarding such seller and the distribution of such securities as the Issuers may from time to time reasonably request in writing. Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Issuers of the happening of any event of the kind described in Sections 6(e)(iii) or 6(e)(vi) hereof, such holder shall forthwith discontinue disposition of Registrable Securities until such holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(m) hereof, or until it is advised in writing by the Issuers that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference in the Prospectus, and, if so directed by the Issuers, such holder shall deliver to the Issuers (at the Issuers' expense) all copies, other than permanent file copies then in such holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Issuers shall give any such notice, the time periods mentioned in Sections 3(a)(iv) and 3(b) hereof shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 6(m) hereof or is advised in writing by the Issuers that the use of the Prospectus may be resumed. 7. Registration Expenses. (a) The following expenses incident to any Registration shall be paid by HNS: (i) all registration and filing fees (including, without limitation, with respect to filings required to be made with the SEC and the NASD); (ii) fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the underwriters or selling holders in connection with blue sky qualifications of the Registrable Securities and determination of their eligibility for investment under the laws of such jurisdictions as the managing underwriters or holders of Registrable Securities being sold may designate); (iii) the fees and expenses incurred in connection with the listing of any securities to be registered on a securities exchange; (iv) rating agency fees and expenses; (v) the fees and expenses of the Trustee (including counsel fees) incurred in connection with the Registration of the Registrable Securities under the Securities Act, the qualification of the Indenture under the Trust Indenture Act and the initial appointment of the Trustee; provided, however, that the ongoing fees and disbursements of the Trustee in connection with the performance of its duties under the Indenture (including counsel fees) shall be paid by the Issuers; and 10 11 (vi) printing (including, without limitation, expenses of printing or engraving certificates for the Registrable Securities in a form eligible for deposit with Depositary Trust Company and of printing prospectuses); provided, however, that the Issuers agree, unless HNS otherwise requests or consents, to only use the services of commercial printers for purposes of electronic filing and making substantially final changes to the Registration Statement for the purpose of making an electronic filing (all such expenses listed in this Section 7(a) being collectively called "HNS Registration Expenses"). (b) Subject to Section 7(c) hereof, all of the Issuers' expenses incident to any Registration (other than HNS Registration Expenses) shall be paid by the Issuers, including, without limitation: (i) all out-of-pocket expenses (including, without limitation, messenger, telephone and delivery expenses); (ii) fees and disbursements of counsel for the Issuers; (iii) fees and disbursements of all independent certified public accountants of the Issuers (including the expenses of any special audit and "cold comfort" letters required by or incident to such performance); (iv) the Issuers' internal (i.e., not out-of-pocket) expenses (including, without limitation, all salaries and expenses of their officers and employees performing legal or accounting duties); and (v) fees and expenses of other Persons retained by the Issuers (all such expenses listed in this Section 7(b) being collectively called "Issuer Registration Expenses"). (c) Notwithstanding Section 7(b) above, with respect to any reasonable Issuer Registration Expenses (other than those set forth in Section 7(b)(iv) hereof), HNS shall reimburse the Issuers for (1) the first $110,000 of such documented Issuer Registration Expenses in connection with the first Registration provided for in Section 3(b) hereof and (2) the first $60,000 of such documented Issuer Registration Expenses in connection with the second Registration provided for in Section 3(b) hereof. In addition, following the completion of the first Registration provided for in Section 3(b) hereof and until the earlier of (i) the maturity date of the Notes and (ii) the date on which no Notes remain outstanding, HNS shall pay the Issuers a nonaccountable maintenance and compliance expense allowance equal to $20,000 per year (the first of such payments to be made on the first anniversary of the effective date of the Registration Statement for the first Registration effected hereunder, and subsequent payments to be made on each anniversary thereafter). The Issuers shall not be liable for any fees, disbursements or other expenses of any underwriters or the holders of any Registrable Securities incident to any Registration or the sale of the Registrable Securities (including, without limitation, any fees and disbursements of counsel retained by the holders or underwriters or any selling discounts or commissions), it being agreed that any of the fees, disbursements and expenses contemplated by Section 7(b) above shall not be deemed to be fees, disbursements or expenses of such holders or underwriters. Notwithstanding any provision in this Section 7, this Section shall not relieve the Issuers of the obligations to pay any costs or expenses required to be paid by the Issuers under the Financing Agreement. 11 12 8. Indemnification (a) Indemnification by the Issuers. The Issuers agree, jointly and severally, to indemnify and hold harmless each holder of Registrable Securities, its officers, directors, employees and agents and each Person who controls such holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each such Person being sometimes hereinafter referred to as an "Indemnified Holder") from and against all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation and legal expenses) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any such untrue statement or omission or allegation thereof based upon information furnished in writing to the Issuers by such holder expressly for use therein. This indemnity shall be in addition to any liability which the Issuers may otherwise have. The Issuers shall also indemnify any underwriters, selling brokers, dealer, managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as provided above with respect to the indemnification of the Indemnified Holders of Registrable Securities; provided, however, that the foregoing indemnity with respect to any untrue statement or omission or alleged untrue statement or omission made in a preliminary prospectus shall not inure to the benefit of any such underwriter, selling broker, dealer manager or similar securities industry professional from whom the Person asserting any such loss, liability, claim, damage or expense purchased any of the securities that are the subject thereof if a copy of the Prospectus (as then amended or supplemented if the Issuers shall have furnished any amendments or supplements thereto) was not sent or given to such Person, if such is required by law, at or prior to the written confirmation of the sale of the securities to such Person and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, liability, claim, damage or expense. If any action or proceeding (including any governmental investigation or inquiry) shall be brought or asserted against an Indemnified Holder in respect of which indemnity may be sought from the Issuers, such Indemnified Holder shall promptly notify the Issuers in writing, and the Issuers shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Holder and the payment of all expenses. Such Indemnified Holder shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be the expense of such Indemnified Holder unless (a) the Issuers have agreed to pay such fees and expenses, (b) the Issuers shall have failed to assume the defense of such action or proceeding or shall have failed to employ counsel reasonably satisfactory to such Indemnified Holder in any such action or proceeding or (c) the named parties to any such action or proceeding (including any impleaded parties) include both such Indemnified Holder and the Issuers, and such Indemnified Holder shall have been advised by counsel that representation of both parties by the same counsel would be inappropriate due to actual or potential material differing interests between them (in which case, if such Indemnified Holder notifies the Issuers in writing that it elects to employ separate counsel at the expense of the Issuers, the Issuers shall not have the right to assume the defense of such action or proceeding on behalf of such Indemnified Holder, it being understood, however, that the Issuers shall not, in connection with any one such action or proceeding or separate but substantially similar or related actions or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys at any time for such Indemnified 12 13 Holder and any other Indemnified Holders, which firm shall be designated in writing by such Indemnified Holders). The Issuers shall not be liable for any settlement of any such action or proceeding effected without their written consent, but if settled with their written consent, or if there be a final judgment for the plaintiff in any such action or proceeding, the Issuers agree to indemnify and hold harmless such Indemnified Holders from and against any loss or liability by reason of such settlement or judgment. (b) Indemnification by Holder of Registrable Securities. Each holder of Registrable Securities severally agrees to indemnify and hold harmless the Issuers, their directors and officers and each Person, if any, who controls the Issuers within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Issuers to such holder, but only with respect to information relating to such holder or its plan of distribution furnished in writing by such holder expressly for use in any Registration Statement or Prospectus, or any amendment or supplement thereto, or any preliminary prospectus. In case any action or proceeding shall be brought against the Issuers or their directors or officers or any such controlling person, in respect of which indemnity may be sought against a holder of Registrable Securities, such holder shall have the rights and duties given the Issuers and the Issuers or their directors or officers or such controlling person shall have the rights and duties given to each holder by the preceding paragraph. In no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds received by such holder upon the sale of the Registrable Securities giving rise to such indemnification obligation. The Issuers shall be entitled to receive indemnities from any underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement or any amendment or supplement thereto, or any preliminary prospectus. (c) Contribution. If the indemnification provided for in this Section 8 is unavailable to an indemnified party under Section 8(a) or Section 8(b) hereof (other than by reason of exceptions provided in those Sections) in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each applicable 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, liabilities or expenses in such proportion as is appropriate to reflect the relative benefits received by the Issuers, on the one hand, and the Indemnified Holders, on the other hand, from the sale of Registrable Securities or if such allocation is not permitted by applicable law, the relative fault of the Issuers, on the one hand, and of the Indemnified Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of the Issuers, on the one hand, and of the Indemnified Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers or by the Indemnified Holder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 8(a), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Issuers and each holder of Registrable Securities agree that it would not be just and equitable if contribution pursuant to this Section 8(c) were determined by pro rata allocation or by any other 13 14 method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 8(c), an Indemnified Holder shall not be required to contribute any amount in excess of the amount by which the total price at which the Securities sold by such Indemnified Holder or its affiliated Indemnified Holders and distributed to the public were offered to the public exceeds the amount of any damages which such Indemnified Holder, or its affiliated Indemnified Holders, has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 9. Rule 144 The Issuers covenant that they will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder and will take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any holder of Registrable Securities, the Issuers shall deliver to such holder a written statement as to whether it has complied with such information and requirements. 10. Rule 144A The Issuers hereby agree, for so long as any Registrable Securities remain outstanding, to make available to any holder or beneficial owner of Registrable Securities in connection with any sale thereof and any prospective purchaser of such Registrable Securities from such holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such Registrable Securities pursuant to Rule 144A. 11. Participation in Underwritten Registrations No holder (or its successors or assigns) may participate in any underwritten registration hereunder unless, in addition to complying with its other obligations under this Agreement, such Person (a) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the underwriters and other Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 12. Miscellaneous (a) Remedies. Each holder of Registrable Securities, in addition to being entitled to exercise all rights provided herein, and as provided in the Indenture and the Financing Documents and granted by law, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. The Issuers agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 14 15 (b) No Inconsistent Agreements. The Issuers shall not on or after the date of this Agreement enter into any agreement with respect to their securities which is inconsistent with the rights granted to the holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. (c) Adjustments Affecting Registrable Securities. The Issuers shall not take any action, or permit any change to occur, solely with respect to the Registrable Securities which would (i) adversely affect the ability of the holders of Registrable Securities to include such Registrable Securities in a Registration undertaken pursuant to this Agreement or (ii) adversely affect the marketability of such Registrable Securities in any such registration. Nothing in this Section 11(c) shall prohibit the Issuers from taking any action or permitting any change to occur that generally affects the Issuers' respective businesses, assets, operations or prospects regardless of any ancillary effect on the Registrable Securities, provided that such action or change is not designed specifically to impair the value of the Registrable Securities. (d) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Issuers have obtained the written consent of holders of at least 50% in outstanding aggregate principal amount of Registrable Securities. Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other holders of Registrable Securities may be given by the holders of 50% in aggregate principal amount of the Registrable Securities being sold. (e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telecopier, or air courier guaranteeing overnight delivery: (i) if to a holder of Registrable Securities, at the most current address given by such holder to the Company in accordance with the provisions of this Section 12(e), which address initially is, with respect to each holder, the address set forth on HNS' signature page of this Agreement, with a copy to Latham & Watkins, 1001 Pennsylvania Avenue, N.W., Suite 1300, Washington, D.C., Attention: James F. Rogers, Esq.; and (ii) if to the Issuers, initially at its address set forth on the Company's signature page of this Agreement and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 12(e), with a copy to Klehr, Harrison, Harvey, Branzburg & Ellers, 1401 Walnut Street, Philadelphia, PA 19102, Attention: Leonard M. Klehr, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; when received if deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery. (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent holders of Registrable Securities. 15 16 (g) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted by the Issuers with respect to the securities sold pursuant to the Financing Agreement. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. [SIGNATURE PAGE FOLLOWS] 16 17 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. ISSUERS: GEOTEK FINANCING CORPORATION By: /s/ Michael McCoy ------------------------------------------ Title: Chief Financial Officer Address: c/o Geotek Communications, Inc. 20 Craig Road Montvale, NJ 07645 Telecopy No.: (201) 930-9614 GEOTEK COMMUNICATIONS, INC. By: /s/ Michael McCoy ------------------------------------------ Title: Chief Financial Officer Address: 20 Craig Road Montvale, NJ 07645 Telecopy No.: (201) 930-9614 HNS: HUGHES NETWORK SYSTEMS, INC. By: /s/ Pradeep Kaul ------------------------------------------ Title: Executive Vice President Address: 10450 Pacific Center Court San Diego, CA 92121 Telecopy No.: (619) 457-4994 17 -----END PRIVACY-ENHANCED MESSAGE-----