EXHIBIT 2.6
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STOCK PURCHASE AGREEMENT
By and Among
GEOTEK COMMUNICATIONS, INC.,
GEOTEK PST, INC.
and
RDC-XXXXXX DEVELOPMENT CORPORATION LTD.
Dated as of
September 28, 1995
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TABLE OF CONTENTS
1. Purchase and Sale of Common Stock..................................................................... 1
1.1 Sale and Issuance............................................................................. 1
1.2 Closing....................................................................................... 2
2. Representations and Warranties of the Company......................................................... 2
3. Representations and Warranties of the Investor........................................................ 8
4. Conditions of Investor's Obligations at Closing....................................................... 10
5. Conditions of the Company's Obligations at Closing.................................................... 11
6. Limitations on Disposition............................................................................ 12
6.1 Securities Laws............................................................................... 12
6.2 Legends....................................................................................... 12
7. Registration Rights................................................................................... 12
7.1 Definitions................................................................................... 12
7.2 Registration.................................................................................. 13
7.3 Obligations of the Company.................................................................... 13
7.4 Furnish Information........................................................................... 14
7.5 Expenses of Registration...................................................................... 14
7.6 Indemnification and Contribution.............................................................. 14
7.7 Additional Registration Obligations........................................................... 16
8. Termination........................................................................................... 16
8.1 Termination by Mutual Written Consent......................................................... 16
8.2 Termination by the Company or the Investor.................................................... 16
8.3 Termination by the Investor................................................................... 17
8.4 Termination by the Company.................................................................... 17
9. Miscellaneous......................................................................................... 17
9.1 Survival of Warranties; Indemnity............................................................. 17
9.2 Successors and Assigns........................................................................ 18
9.3 Governing Law................................................................................. 18
9.4 Counterparts.................................................................................. 18
9.5 Captions and Headings......................................................................... 19
9.6 Notices....................................................................................... 19
9.7 Finder's Fee.................................................................................. 19
9.8 Amendments and Waivers........................................................................ 20
9.9 Reasonable Efforts............................................................................ 20
9.10 Severability.................................................................................. 20
9.11 Entire Agreement.............................................................................. 20
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Table of Defined Terms
Exhibits
Exhibit A Assignment Agreement
Exhibit B Opinion of Company's Counsel
Exhibit C Opinion of Company's General Counsel
Exhibit D Opinion of PST's Counsel
Exhibit E Opinion of Investor's Counsel
Schedules
Schedule I Schedule of Exceptions
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THE SECURITIES OF GEOTEK COMMUNICATIONS, INC. TO BE ISSUED HEREUNDER HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION. SUCH
SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT) IN THE ABSENCE
OF (I) A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE RESALE OF SUCH
SECURITIES UNDER THE SECURITIES ACT OR (II) AN EXEMPTION FROM ALL APPLICABLE
REGISTRATION REQUIREMENTS.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is dated as of the 28th day of September,
1995, by and among GEOTEK COMMUNICATIONS, INC., a Delaware corporation (the
"Company"), GEOTEK PST, INC., a Delaware corporation ("GP") and RDC-XXXXXX
DEVELOPMENT CORPORATION LTD., a corporation organized under the laws of the
State of Israel (the "Investor").
WHEREAS, the Investor currently holds a debenture (the "Debenture")
issued to it by PowerSpectrum Technology Limited, a private company organized
under the laws of the State of Israel ("PST") which is convertible into 760,000
ordinary shares of PST (the "PST Ordinary Shares") and a perpetual capital note
to be issued by PST (the "PST Capital Note").
WHEREAS, the Investor also holds 400 management shares issued by PST
(the "PST Management Shares"). The PST Management Shares, together with the PST
Ordinary Shares and PST Capital Note, are collectively referred to as the "PST
Securities."
WHEREAS, the Investor currently has the right (without the requirement
of any consents or approvals), and has agreed, to convert the Debenture into the
PST Ordinary Shares and the PST Capital Note, and the Investor and the Company
have agreed that the Company, through GP, a wholly-owned subsidiary of the
Company, shall issue and sell to the Investor, in exchange for the PST
Securities, 1,800,000 shares of the Company's common stock, $.01 par value per
share (the "Common Stock").
WHEREAS, the Investor has also agreed to purchase from the Company, and
the Company has agreed to sell to the Investor, 338,028 shares of the Common
Stock for an aggregate purchase price of $3,000,000.
WHEREAS, all of the above transactions are to be effected on the terms
and conditions set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale of Common Stock.
1.1 Sale and Issuance. Subject to the satisfaction of the
terms and conditions set forth in Sections 4 and 5 hereof, at the Closing, the
Company shall issue and sell to the Investor, and the Investor will purchase
from the Company, 2,138,028 shares of Common Stock, of which 1,800,000 shares
shall initially be issued by the Company to GP and then transferred
by GP to the Investor. In consideration thereof, the Investor shall (i) transfer
to GP the PST Securities, and (ii) shall pay to the Company a purchase price of
$3,000,000 (the "Cash Purchase Price") payable by wire transfer of immediately
available funds to an account to be specified by the Company at least five day
priors to the Closing. The above-referenced transactions are hereinafter
collectively referred to as the "Transactions."
1.2 Closing. Subject to the satisfaction or waiver of the
conditions set forth in Sections 4 and 5 hereof, the closing of the Transactions
(the "Closing") shall take place at the offices of Zellermayer, Pelossof,
Advocates, Tel-Aviv, Israel or at such other place as may be agreed. The date
and time on which the Closing shall take place (the "Closing Date") shall be
determined as follows: The parties shall use their best efforts to cause the
Closing to take place at 10:00 a.m. Tel-Aviv time on October 12, 1995, provided
that either the Company or the Investor may postpone the Closing Date until
10:00 Tel-Aviv time on October 19, 1995 by giving written notice, on or before
October 10, 1996, to the other party that the applicable conditions cannot
practically be met by October 12, 1995. Further postponements to 10:00 a.m.
Tel-Aviv time on October 26 and October 31, 1995, respectively, can be effected
in accordance with the same procedure by giving such notice by October 17 and
October 24, 1995, respectively. The failure by a party to satisfy conditions to
Closing by October 31, 1995 shall constitute a breach of this Agreement thereby.
Notwithstanding the foregoing, if the Chief Scientist of the Ministry of
Industry and Trade of the State of Israel (the "Chief Scientist") has not given
his approval of the Transactions by October 31, 1995, the Closing shall take
place five business days after one party has notified the other that such
approval has been obtained, provided that no party shall be obligated to close
after November 30, 1995. No party shall be in breach of this Agreement as a
result of the failure to obtain such approval if such party made a good faith
attempt to obtain such approval.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that, as of the date hereof and as of
the Closing, except as set forth in the Schedule of Exceptions attached hereto
as Schedule I (the "Schedule of Exceptions"):
(a) Organization and Qualification. Each of the Company and GP
is a corporation duly organized and validly existing under the laws of the State
of Delaware and has all requisite corporate power and authority to enter into
this and the other Transaction Documents (as hereinafter defined) and to
consummate the Transactions. PST is a private company duly organized and validly
existing under the laws of the State of Israel. The Company is duly qualified
and in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary and where the failure to be so qualified has or would
have a Material Adverse Effect (as defined below). The term "Material Adverse
Effect" means any change or effect that is or is reasonably likely to be
materially adverse to the business, results of operations, market value of the
Company's issued and outstanding capital stock, and/or financial condition of
the Company and/or the Subsidiaries (as defined below), taken as a whole.
(b) Subsidiaries. The Schedule of Exceptions sets forth each
Person (as defined below) in which the Company directly or indirectly owns any
of the capital stock or any partnership or other ownership interest (the
"Subsidiaries"). GP is a wholly-owned Subsidiary of the Company. Other than as
set forth on the Schedule of Exceptions, there are no outstanding
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preemptive rights, conversion rights, options, warrants or other rights or
agreements for the purchase or acquisition of any shares of the Subsidiaries.
The Subsidiaries were duly organized and are validly existing and in good
standing under the laws of the respective jurisdictions of their organization.
The Subsidiaries have not qualified to do business as foreign corporations in
any jurisdiction, and such qualification is not presently required in any
jurisdiction in which the failure so to qualify would have a Material Adverse
Effect.
(c) Capitalization. The Company's authorized capital consists
of 99,000,000 authorized shares of Common Stock, of which shares 51,537,849 were
issued and outstanding at August 31, 1995, and 4,000,000 authorized shares of
preferred stock, $.01 par value per share (the "Preferred Stock"), of which an
aggregate of 1,508,572.5 shares were issued and outstanding at July 31, 1995,
consisting of 444,445 shares of Series H Cumulative Convertible Preferred Stock,
20 shares of Series I Cumulative Convertible Preferred Stock, and 20 shares of
Series K Cumulative Convertible Preferred Stock, 1,062,925 shares of Series L
Cumulative Convertible Preferred Stock and 1,162.5 shares of Series M Cumulative
Convertible Preferred Stock.
Except as set forth on the Schedule of Exceptions, there are,
and at the Closing there will be, no other outstanding preemptive rights or
similar contractual or other rights to maintain any level of ownership of any
shares of capital stock of the Company nor any other conversion rights, options,
warrants or other rights or agreements for the purchase or acquisition from the
Company of any shares of its capital stock nor was the Company obligated, nor
will it be obligated, in any other manner to issue shares of capital stock or
other securities. Except as set forth in the Schedule of Exceptions, since July
31, 1995, the Company has not issued any shares of capital stock or other
securities other than upon conversion or exercise or otherwise as a result of
conversion rights, options, warrants and other rights or agreements for the
purchase of shares of its capital stock that were outstanding as of July 31,
1995.
(d) Authorization. All corporate action on the part of the
Company (and of GP and PST, to the extent applicable) necessary for the
authorization, execution and delivery of this Agreement, and the assignment
agreement by and between the Company and the Investor relating to the transfer
of the PST Securities in the form of Exhibit A attached hereto (the "Assignment
Agreement") (collectively, the "Transaction Documents") and the performance of
all obligations of the Company (and of GP and PST, to the extent applicable)
under the Transaction Documents has been taken. All corporate action on the part
of GP and the Company necessary for the authorization, issuance (or reservation
for issuance) and delivery of the Common Stock issuable hereunder will be taken
upon or prior to the Closing. Each of the Transaction Documents constitutes a
valid and legally binding obligation of the Company (and of GP and PST, to the
extent applicable), enforceable in accordance with its terms.
(e) Valid Issuance of Common Stock. When issued, transferred
and paid for pursuant hereto, the Common Stock issuable hereunder will (i) be
duly authorized and validly issued, fully paid and nonassessable and free and
clear of all liens, claims, charges, security interests, options, subscriptions,
calls, demands, obligations, warrants or other legal or equitable encumbrances
of whatever kind or nature or third party's rights whatsoever; and (ii)
constitute, as of the date hereof, 2.3% of the Company's outstanding Common
Stock on a fully diluted basis.
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(f) Organizational Documents and Corporate Records. The
Company has heretofore made available to the Investor true and complete copies
of the Certificate of Incorporation and Bylaws of the Company as in effect on
the date hereof. The minute books of the Company and its Subsidiaries, which
have been made available to the Investors for inspection, contain true and
complete records of all meetings and consents in lieu of meetings of the Board
of Directors and the stockholders or partners or other owners of the Company and
its Subsidiaries.
(g) Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority or other Person, including, without
limitation, the Federal Communications Commission (the "FCC"), on the part of
the Company or any of its Subsidiaries is required in connection with the
consummation of the Transactions, except as set forth in the Schedule of
Exceptions.
(h) Litigation. There is no action, suit, claim, demand,
proceeding or investigation (collectively, a "Claim") pending or, to the
Company's best knowledge, threatened against the Company or its Subsidiaries or
any of their respective properties which (i) questions the validity of the
Transaction Documents, or the right of the Company or PST to enter into the
Transaction Documents or to consummate the Transactions, or (ii) individually or
in the aggregate would reasonably be expected to have a Material Adverse Effect.
The Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. There are no Claims pending or, to
the best knowledge of the Company, threatened that would give rise to any right
of indemnification on the part of any director or officer of the Company or its
Subsidiaries, or the heirs, executors or administrators of such director or
officer, against the Company or its Subsidiaries.
(i) Compliance with Laws. Neither the Company nor any of its
Subsidiaries is or has been in violation of any applicable order, judgment,
injunction, award, decree or writ (collectively, "Orders"), or any applicable
law, statute, code, ordinance, regulation or other requirement (collectively
"Laws"), of any government or political subdivision thereof, or any agency or
instrumentality of any such government or political subdivision, or any court or
arbitrator (collectively, "Governmental Bodies") including, without limitation,
laws and regulations relating to the communications industry and environmental
laws, which violations either individually or in the aggregate could have a
Material Adverse Effect, and, to the knowledge of the Company, it has received
no written notice that any such violation has been alleged.
(j) Conflicting Instruments. The execution and delivery of
this Agreement does not, and the execution and delivery of the remaining
Transaction Documents will not, as of the date hereof and the Closing Date and
the consummation of the Transactions in compliance with the terms hereof and
thereof, will not, as of the Closing Date: (i) conflict with or result in any
violation of the corporation laws of the Company's, PST's or GP's jurisdiction
of incorporation or other applicable statutory requirements, or any provision of
the Company's, PST's or GP's Certificate of Incorporation, Bylaws, Articles of
Association and/or other applicable organizational documents, (ii) conflict
with, result in a violation or breach of, or constitute a default (or give rise
to any right of termination, revocation, cancellation or
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acceleration) under, any note, bond, mortgage, indenture, deed of trust,
license, lease, contract, commitment, agreement or arrangement to which the
Company (and/or Subsidiaries) or PST is a party or by which either of them is
bound, or by or to which any of their properties or assets may be bound or
subject, (iii) result in the creation or imposition of a lien on any properties
or assets owned or leased and operated by the Company (and/or Subsidiaries) or
PST, (iv) conflict with or result in a violation of any judgment, order, decree,
writ, injunction, statute, law, ordinance, rule or regulation applicable to the
Company or PST or any of their property or assets, or (v) violate or result in
the revocation, limitation or suspension of any Permits, as defined in
subsection (n) below, held by the Company (and/or Subsidiaries) or PST.
(k) Registration Rights. Except as provided in the Section 7
below or as described in the Schedule of Exceptions, the Company has not granted
or agreed to grant any registration rights under any applicable securities laws
to any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization (each, a "Person").
(l) Intangible Property. The Schedule of Exceptions sets forth
a list of all patents, trademarks, copyrights, service marks and trade names
owned by the Company or its Subsidiaries, and all permits, grants and licenses
or other rights running to or from the Company or its Subsidiaries relating to
any of the foregoing. The Company and its Subsidiaries have the right to use (to
the Company's knowledge, free and clear of any claims or rights of others) all
trade secrets, know-how, processes, technology, blue prints and designs utilized
in or incident to their businesses as presently conducted. The Company and its
Subsidiaries have taken such action as was reasonably necessary to ensure that
they have not infringed any patent, copyrights, trademark, trade name or other
intangible rights of any other Person. Neither the Company nor its Subsidiaries
has received any written communications alleging that it has infringed any
patent, copyright, trademark, trade name or other intangible rights of any other
Person, and no proceedings in connection therewith have been instituted or are
pending. All Trade Secrets are protected against the use of such Trade Secrets
by other Persons to an extent and in an manner customary in the industries in
which the Company and its Subsidiaries operate. There is no present or, to the
knowledge of the Company, threatened use or encroachment of any Trade Secret.
The foregoing shall not derogate from any rights that the Company or PST may
have against the Investor, its affiliates or other Persons arising under prior
agreements or otherwise prior to the date hereof. The Company and its
Subsidiaries will have caused by the Closing in the case of employees at such
date and will, following Closing cause their respective future employees who use
trade secrets in the ordinary course of their employment to execute agreements
providing that such employees will hold in confidence and will not disclose to
other Persons in any way, or otherwise use in any way, trade secrets, products
of such Company or Subsidiaries, as the case may be, or other proprietary, trade
secret or confidential information. Such agreements will be, in respect of
employees at the Closing Date, in full force and effect as of the Closing Date.
(m) Tax Matters.
(i) The Company and its Subsidiaries have paid all
federal, state, local and foreign taxes (including, without limitation, to the
extent that such taxes exist and are applicable, income, profits, premium,
estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem,
severance, capital levy, production, transfer, withholding, employment,
5
unemployment compensation, payroll-related and property taxes, import duties and
other governmental charges and assessments), whether or not measured in whole or
in part by net income, and including deficiencies, interest, additions to tax or
interest, and penalties with respect thereto (hereinafter "Taxes" or,
individually, a "Tax"), required to be paid by any of them through the date
hereof, and shall timely pay all Taxes required (under the law and procedures of
the applicable taxing jurisdiction) to be paid by any of them before the Closing
(except to the extent such Taxes are reserved for on the combined balance sheet
of the Company and its Subsidiaries as of June 30, 1995 and with respect to
Taxes accruing after the date of such balance sheet that are similar in nature
and amount to those shown in such balance sheet). Neither the Company nor any
Subsidiary has any liability for Taxes subsequent to the date of its most recent
applicable tax return other than as arise in the ordinary course of business.
(ii) The Company and its Subsidiaries have timely filed
all reports, declarations, statements or other reports with respect to Taxes
("Tax Returns") required to be filed through the date hereof taking into account
any extensions permitted by law.
(iii) With respect to all Tax Returns of the Company and
its Subsidiaries, no extension of time is in force with respect to any date on
which any Tax Return was or is to be filed, and no waiver or agreement is in
force for the extension of time for the assessment or payment of any Tax.
(iv) There are no ongoing, pending or, to the Company's
best knowledge, threatened tax audits, assessments or litigation of (or relating
to) the Company or its Subsidiaries.
(n) Permits. The Company and its Subsidiaries have all
licenses, permits, orders or approvals of, and have made all required
registrations with, all Governmental Bodies that are material to the conduct of
the business of the Company or its Subsidiaries (collectively, "Permits"),
including, without limitation, all Permits relating to compliance with any
environmental laws, except where the failure to have such Permits would not,
individually or in the aggregate, have a Material Adverse Effect. All such
Permits are in full force and effect and neither the Company nor its
Subsidiaries have violated any of the terms thereof except where such violations
would not, individually or in the aggregate, have a Material Adverse Effect. The
Company, through its wholly owned Subsidiaries listed on Schedule 2(b) of the
Schedule of Exceptions, has acquired, or has entered into agreements to acquire,
licenses to operate Specialized Mobile Radio Systems (the "Systems") in the
Designated Filing Areas listed on Schedule 2(n) of the Schedule of Exceptions.
(o) Environmental Matters. (i) The operations of the Company
and its Subsidiaries comply and have complied with all applicable environmental
laws except where the failure to comply would not have a Material Adverse
Effect; (ii) the Company and its Subsidiaries have obtained all material
environmental, health and safety permits, licenses and approvals necessary for
its operations, all such permits, licenses and approvals are in effect, no
appeal is pending therefrom and no action to revoke the same is pending, and the
Company and each Subsidiary are in compliance with all material terms and
conditions thereof; and (iii) there has not been a release into the environment
of a hazardous substance in, on or under any real property, asset or facility
currently or previously owned, leased or operated by the Company or its
Subsidiaries, except where such release would not have a Material Adverse
Effect.
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(p) SEC Filings; Financial Statements. (a) The Company has
filed all forms, reports and documents required to be filed by it with the
Securities and Exchange Commission (the "SEC") since December 31, 1991, and has
heretofore made available to the Investors, in the form filed with the SEC
(excluding any exhibits thereto), (i) its Annual Reports on Form 10-K for the
fiscal years ended December 31, 1992, 1993 and 1994, respectively, (ii) all
proxy statements relating to the Company's meetings of stockholders (whether
annual or special) held since December 31, 1992, and (iii) all other forms,
reports and other registration statements filed by the Company with the SEC
since December 31, 1991 (the forms, reports and other documents referred to in
clauses (i), (ii) and (iii) above being referred to herein, collectively, as the
"SEC Reports"). The SEC Reports were prepared in accordance with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, and the rules and regulations thereunder and did not at the time
they were filed contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each of the consolidated financial statements (including,
in each case, any notes thereto), contained in the SEC Reports filed by the
Company was prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and fairly and accurately present the financial
position, assets, liabilities, results of operations and cash flows of the
Company and its consolidated Subsidiaries as at the respective dates thereof and
for the respective periods indicated therein. Except and to the extent set forth
in the SEC Reports filed with the SEC prior to the date of this Agreement, the
Company and its Subsidiaries do not have any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) other than
liabilities and obligations which would not, individually or in the aggregate,
have a Material Adverse Effect. There is no fact known to the Company that has
not been disclosed in the SEC Reports or in this Agreement, including the
Schedule of Exceptions, that is likely to have a Material Adverse Effect.
(q) Changes. Other than as set forth in the Schedule of
Exceptions, since June 30, 1995, there has not been, with respect to the
Company or any of its Subsidiaries:
(i) any damage, destruction or loss, whether or not
covered by insurance, which could reasonably be expected to have a Material
Adverse Effect;
(ii) any waiver by the Company or any of its Subsidiaries
of a valuable right or of a debt owed to it which could reasonably be expected
to have a Material Adverse Effect;
(iii) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company or any of its
Subsidiaries, except in the ordinary course of business and which could not
reasonably be expected to have a Material Adverse Effect;
(iv) any change or amendment to a material contract or
arrangement by or to which the Company or any of its Subsidiaries or any of
their respective assets or properties are bound or subject which could
reasonably be expected to have a Material Adverse Effect;
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(v) any change by the Company in its accounting methods,
principles or priorities;
(vi) any material agreement entered into by the Company or
any of its Subsidiaries;
(vii) any sale, abandonment or other disposition of any of
its properties or assets except for inventory and equipment sold in the ordinary
course of business and the disposition of obsolete properties and assets; or
(viii) to the knowledge of the Company, any other event or
condition of any character which could reasonably be expected to have a Material
Adverse Effect.
(r) PST. The Company is fully aware of PST's financial,
business and other conditions and acknowledges that no representation or
warranty had been made by the Investor with respect to such matters nor has the
Company relied on any such representation or warranty in connection with the
Transactions.
(s) Accredited Investor; HSR Compliance. Each of the Company
and GP will, as of the Closing Date, be an "accredited Investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act, as
currently in effect. Assuming the accuracy of the Investor's representation in
Section 3(l), the Company is not required to make any filing under the HSR Act
(as defined below) in connection with the Transactions.
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company, as of the date hereof, that:
(a) Organization and Qualification. The Investor is a
corporation duly organized and validly existing under the laws of the State of
Israel and at the Closing will have all requisite corporate power and authority
to enter into this Agreement and the other Transaction Documents and to
consummate the Transactions.
(b) Authorization. All corporate action on the part of the
Investor necessary for the authorization, execution and delivery of this
Agreement and the other Transaction Documents and the performance of all
obligations of the Investor under the Transaction Documents shall be taken upon
or prior to the Closing. Each of the Transaction Documents will constitute a
validly binding obligation of the Investor at the Closing, enforceable in
accordance with its terms.
(c) Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
governmental authority or other Person is required in connection with the
consummation of the Transactions by the Investor, except that a permit is
required from the Controller of Foreign Currency of the Bank of Israel.
(d) Litigation. There is no Claim pending or, to the
Investor's knowledge, threatened against the Investor which questions the
validity of the Transaction Documents, or the right of the Investor to enter
into the Transaction Documents or to consummate the Transactions.
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(e) Conflicting Instruments. The execution and delivery of
this Agreement does not, and the execution and delivery of the Transaction
Documents will not, as of the Closing Date, and the consummation of the
Transactions in compliance with the terms hereof and thereof, will not, as of
the Closing Date:
(i) conflict with or result in any violation of the Laws
of the Investor's jurisdiction of incorporation or other applicable statutory
requirements, or any provision of its organizational documents,
(ii) conflict with, result in a violation or breach of, or
constitute a default (or give rise to any right or termination, revocation,
cancellation or acceleration) under, any note, bond, mortgage, indenture, deed
of trust, license, lease, contract, commitment, agreement or arrangement to
which it is a party or by which it is bound, or by or to which any of its
properties or assets may be bound or subject,
(iii) result in the creation or imposition of a lien on
any properties or assets owned or leased and operated by the Investor, and
(iv) conflict with or result in a violation of any Order
or Law applicable to it or any of its property or assets.
(f) PST Securities. The Debenture shall be converted into the
PST Ordinary Shares and the PST Capital Note prior to the Closing. Other than
the PST Ordinary Shares, the PST Capital Note and the PST Management Shares, the
Investor has no direct or indirect interest or rights of any type in PST. The
Investor has good, marketable and unencumbered title to the PST Securities free
and clear of all liens, claims, voting agreements and rights of others, except
as provided in PST's Articles of Association or in the Joint Venture Agreement
dated May 14, 1992 among, inter alia, the Company and PowerSpectrum, Inc.
(g) Purchase Entirely for Own Account. This Agreement is made
with the Investor in reliance upon the Investor's representation to the Company,
which by the Investor's execution of this Agreement the Investor hereby
confirms, that the Common Stock to be issued hereunder will be acquired for the
Investor's own account, not as a nominee or agent, solely for investment
purposes and not with a view to the sale or distribution of any part thereof,
and that the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, the Investor further represents that it does not have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participation to such Person or to any third Person, with respect to any of the
Common Stock.
(h) Disclosure of Information. The Investor has had an
opportunity to ask questions and receive answers from the Company regarding the
Transactions, the Common Stock and the Company. The foregoing, however, does not
limit or modify the representations and warranties made by the Company in
Section 2 of this Agreement or the right of the Investor to rely thereon. The
Investor shall be entitled to rely upon any information contained in any filing,
press release or other publication made by the Company prior to Closing upon
which any purchaser of the Company's securities through a securities exchange is
entitled to rely.
9
(i) Investment Experience. The Investor can bear the
economic risk of its investment in the Common Stock and the Investor has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Common Stock.
(j) Accredited Investor; Not U.S. Person. The Investor
will, as of the Closing Date, (i) be an "accredited investor" within the meaning
of Rule 501 of Regulation D promulgated under the Securities Act, as presently
in effect; and (ii) not be a "U.S. person" within the meaning of Rule 902 of
Regulation S promulgated under the Securities Act, as currently in effect.
(k) Unregistered Securities. The Investor understands that
the shares of Common Stock have not been registered under the Securities Act or
under any state securities laws, and that, under such laws, such securities may
not be resold in the United States or to a U.S. person without registration
under the Securities Act unless an exemption is available.
(l) HSR Compliance. The Investor's acquisition of Common
Stock hereunder is solely for the purpose of investment and, after giving effect
to such acquisition, the Investor (when aggregated with its ultimate parent
entity (as defined in the regulations promulgated under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and all entities
that such ultimate parent entity controls (as defined in the regulations
promulgated under the HSR Act)) directly or indirectly holds less than ten
percent of the outstanding voting securities (as defined in the regulations
promulgated under the HSR Act) of the Company.
4. Conditions of Investor's Obligations at Closing. The obligations
of the Investor under this Agreement are subject to the fulfillment at or
before the Closing of each of the following conditions, or their waiver by the
Investor in writing and in advance:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true at and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing.
(b) Performance. The Company shall have performed and complied
in all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
at or before the Closing.
(c) Compliance Certificate. The President and Chief Executive
Officer of the Company shall have delivered to the Investor at Closing a
certificate certifying that the conditions specified in Sections 4(a) and 4(b)
have been fulfilled.
(d) Delivery of Documents. The Investor shall have received
and the Company shall have delivered or caused to be delivered: (i) a certified
copy of the Certificate of Incorporation of the Company and all amendments
thereto; (ii) a copy of the By-Laws of the Company and all amendments thereto,
certified by the Secretary of the Company; (iii) incumbency certificates, board
resolutions and such other evidence of corporate authority and proceedings of
the Company, GP and PST for the transactions contemplated hereby and in
connection therewith as the Investor and its counsel shall reasonably request;
(iv) an opinion of counsel to the Company and GP in the form of Exhibit B; (v)
an opinion of the General Counsel
10
to the Company as to certain telecommunications law matters in reasonably
satisfactory form relating to the matters set forth in Exhibit C attached
hereto; and (vi) an opinion of counsel to PST in the form of Exhibit D attached
hereto, with such changes as counsel to PST shall reasonably request. The
Investor may conclusively rely on such documents.
(e) Approvals and Consents. The Company shall have duly
obtained, received or effected (and all applicable waiting and termination
periods, if any, including any extensions thereof, under any applicable law,
statute, regulation or rule shall have expired or terminated) all
authorizations, consents, approvals, licenses, franchises, permits and
certificates by or of, and shall have made all filings and effected all
notifications, registrations and qualifications with, all applicable
Governmental Bodies to the extent required to be obtained, received, effected or
filed by the Company for the issuance, sale and delivery of the shares of Common
Stock being issued at the Closing and the consummation of the Transactions.
(f) Share Certificates. The Investor shall have received
and the Company and GP, as applicable, shall have delivered or caused to be
delivered stock certificates evidencing the ownership of an aggregate of
2,138,028 shares of Common Stock.
5. Conditions of the Company's Obligations at Closing. The obligations
of the Company to the Investor under Section 1.1 of this Agreement are subject
to the fulfillment or waiver at or before the Closing of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true at and as of the
Closing with the same effect as though such representations and warranties had
been made at and as of the date of the Closing.
(b) Performance. The Investor shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with at or before the Closing, including without limitation the
conversion of the Debenture into the PST Ordinary Shares and the PST Capital
Note.
(c) Compliance Certificate and Opinion. The President and
Chief Executive Officer of the Investor shall have delivered to the Company at
Closing a certificate certifying that the conditions specified in Sections 5(a)
and 5(b) have been fulfilled; and counsel to PST and the Investor shall have
delivered opinions in the form of Exhibits D and E, respectively, attached
hereto with such changes to Exhibit D as counsel to PST shall reasonably
request; provided that failure of counsel to PST to deliver such opinion shall
not constitute a breach of this Agreement by the Investor.
(d) Approvals and Consents. The Investor shall have duly
obtained, received or effected (and all applicable waiting and termination
periods, if any, including any extensions thereof, under any applicable law,
statute, regulation or rule shall have expired or terminated) all
authorizations, consents, approvals, licenses, franchises, permits and
certificates by or of, and shall have made all filings and effected all
notifications, registrations and qualifications with, all applicable
governmental and regulatory authorities to the extent required to be obtained,
received, effected or filed by the Investor for the consummation of the
Transactions.
11
(e) Payment of Cash Purchase Price. The Investor shall have
paid the Cash Purchase Price in immediately available funds by wire transfer to
the account specified by the Company in accordance with Section 1.1 above.
(f) Assignment Agreement. The Investor shall have executed and
delivered the Assignment Agreement.
6. Limitations on Disposition.
6.1 Securities Laws. Without in any way limiting the covenants
set forth above, the Investor further agrees not to make any sale or disposition
of all or any portion of the Common Stock unless and until:
(i) There is then in effect a registration statement under
the Securities Act or the applicable law of any jurisdiction outside the United
States covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(ii) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition is not in
violation of applicable securities laws.
(iii) Notwithstanding the foregoing, the Investor shall
not sell, transfer or otherwise dispose of the 1,800,000 shares of Common Stock
issued in exchange for the PST Securities for a period of two years from the
Closing Date without the Company's prior written consent; provided that, in the
case of transfers to Persons that control, are controlled by or are under common
control with, the Investor, such consent shall not be unreasonably withheld or
delayed, provided further that the transferee agrees to be bound by this
Agreement.
6.2 Legends. It is understood that the certificates evidencing
the Common Stock shall bear the following legend:
"These securities have not been registered under the United
States Securities Act of 1933, as amended (the "Securities Act"), or
the securities laws of any other jurisdiction. Such securities may not
be offered or sold in the United States or to U.S. persons (as defined
in Regulation S promulgated under the Securities Act) in the absence of
(i) a registration statement in effect with respect to the resale of
such securities under the Securities Act or (ii) an exemption from all
applicable registration requirements."
7. Registration Rights.
7.1 Definitions. For purposes of this Section 7:
(a) The term "register", "registered", and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document;
12
(b) The term "Registrable Securities" means the 338,028 shares
of Common Stock to be issued to the Investor in consideration of the Cash
Purchase Price.
(c) The term "Holder" means the Investor.
7.2 Registration. The Company shall, as soon as practicable
after the Closing Date, but in no event more than 30 days after the Closing
Date, file a registration statement under the Securities Act with respect to the
resale of all of the Registrable Securities and shall use its good faith best
efforts to cause such registration statement to become effective within 60 days
after filing or earlier if practicable. The Company may include in such
registration statement securities held by third parties which are subject to
registration rights granted by the Company on or prior to the Closing Date.
7.3 Obligations of the Company. The Company shall, within the
time limits set forth in this Section 7, or if no specific time limit is
specified, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to the Registrable Securities and use its best efforts to cause
such registration statement to become effective, and keep such registration
statement effective at all times for two years from the Closing Date or until
such earlier time as all securities registered thereby have been sold.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement, including but not limited to,
any amendments or supplements which must be prepared as a result of the
engagement of an underwriter by the Holder in the distribution of its
Registrable Securities.
(c) Furnish to the Holder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as it may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by it.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holder, provided that the Company shall not be required to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. The Holder shall
also enter into and perform its obligations under such an agreement.
(f) Notify forthwith the Holder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
13
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(g) In the case of an underwritten public offering, furnish,
on the date that such Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to this Section 7, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in such form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, and (ii) a letter, dated such date, from the independent certified
public accountants of the Company, in such form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters.
(h) Cause all Registrable Securities which are being
registered pursuant to this Section 7 to be included on the NASDAQ National
Market System or the then primary established securities market on which Common
Stock is then included.
7.4 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 that the Holder shall have furnished
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such securities as shall
be required to effect the registration of the Registrable Securities.
7.5 Expenses of Registration. All expenses (other than
underwriting discounts and commissions) incurred 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, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the Holder shall be borne
by the Company.
7.6 Indemnification and Contribution. In connection with a
registration statement under this Section 7:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless the Holder, any underwriter (as defined in the Securities Act)
and each person if any, who controls the 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"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus (but only if such
is not corrected in the final prospectus) contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading (but only if such is not corrected in the final
prospectus), or (iii) any violation or alleged violation by the Company in
connection with the registration of Registrable Securities under the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the
14
Securities Act, the Exchange Act or any state securities law; and the Company
will pay to each the 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 7.6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable 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 the Holder,
underwriter or controlling person.
(b) To the extent permitted by law, the Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any underwriter, and any
controlling person of any such underwriter, 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 the Holder expressly for
use in connection with such registration; and the Holder will pay, as incurred,
any legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this Section 7.6(b), in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 7.6(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; provided that in no event shall any
indemnity under this Section 7.6(b) exceed the net proceeds from the offering
received by the Holder.
(c) Promptly after receipt by an indemnified party under this
Section 7.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 7.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party who is
a named party in such action shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would, in the reasonable opinion of counsel to the
indemnifying party, be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7.6, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 7.6. The indemnifying party shall not settle a
claim without the consent of
15
the indemnified party which shall not be unreasonably withheld unless such
settlement includes monetary remedies only and includes the release of the
indemnified party of all liabilities related to such proceedings.
(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 or the
Holder, the Company and the Holder, 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 and/or any claims asserted) to
which the Company and the Holder may be subject in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand, and
the Holder on the other, in connection with Violations which resulted in such
losses, claims, damages or liabilities. Notwithstanding the foregoing, the
Holder shall not be required to contribute any amount in excess of the net
proceeds received by the Holder from the Registrable Securities sold by the
Holder pursuant to the registration statement. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company and the Holder 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.
7.7 Additional Registration Obligations. In the event that (a)
the Investor is not legally permitted under United States securities laws to
sell the 765,000 shares of Common Stock with a restricted legend held by it
prior to the Closing Date pursuant to Rule 144 under the Securities Act (in
accordance with the volume limitations set forth therein) after such shares have
been held by the Investor for a period of two years, and/or (b) the Investor is
not legally permitted under United States securities laws to sell the 1,800,000
shares issued to in exchange for the PST Securities pursuant to Rule 144 under
the Securities Act (in accordance with the volume limitations set forth therein)
after such shares have been held for two years from the Closing Date, the
Company shall promptly after the end of the applicable two year period cause the
registration of the applicable shares for resale in accordance with the
preceding provisions of this Section 7.1 as if the applicable shares were
Registrable Securities; provided that the registration statement relating to
such shares shall be filed within 30 days after the later of (i) the end of the
applicable two year period and (ii) notice from the Investor requesting such
registration. The Company shall use its good faith best efforts to cause such
registration statement to become effective within 60 days after filing or
earlier if practicable.
8. Termination.
8.1 Termination by Mutual Written Consent. This Agreement
may be terminated and the transactions contemplated hereby may be abandoned, for
any reason, at any time prior to the Closing Date, by the mutual written consent
of the Company and the Investor.
8.2 Termination by the Company or the Investor. This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned by action of the Company or Investor, if and to the extent that the
Closing shall not have occurred at or prior
16
to 5:00 p.m., Tel-Aviv time, on October 31, 1995; provided that, if the approval
of the Chief Scientist has not been obtained by such date, this Agreement may
not be terminated prior to November 30, 1995; provided further that the right to
terminate this Agreement under this Section 8.2 shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing Date to occur on or before
such date; or any court or governmental authority of competent jurisdiction
shall have issued an order, decree, writ or ruling or taken any other action, or
there shall be in effect any statute, rule or regulation, temporarily,
preliminarily or permanently restraining, enjoining or otherwise prohibiting the
consummation of the Transactions; provided, further, however, that a termination
in accordance with this Section 8.2 or Sections 8.3 or 8.4 shall not exclude
other remedies that may be available to the terminating party.
8.3 Termination by the Investor. Without limiting any
provision of Section 8.2, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned by action of the Investor if (a) the
Company shall have failed to comply in any material respect with any of the
covenants or agreements contained in this Agreement to be complied with or
performed by the Company at or prior to such date of termination, and the
Company shall not, within a reasonable period of time after notice of such
failure, have cured or commenced prompt and diligent measures which would
promptly cure such failure, (b) there shall have been a misrepresentation or
breach by the Company with respect to any representation or warranty made by it
in this Agreement and such misrepresentation or breach cannot be cured prior to
the Closing Date, or (c) the number of shares of Common Stock outstanding on a
fully diluted basis exceeds 100,000,000 as a result of an issuance that Investor
reasonably believes is likely to materially and adversely affect the market
value of the Common Stock it is to acquire hereunder.
8.4 Termination by the Company. Without limiting any provision
of Section 8.2, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned by action of the Company, at any time prior
to the Closing Date, if (a) the Investor shall have failed to comply in any
material respect with any of the covenants or agreements contained in this
Agreement to be complied with or performed by the Investor at or prior to such
date of termination and the Investor shall not, within a reasonable period of
time after notice of such failure, have cured or commenced prompt and diligent
measures which would promptly cure such failure, or (b) there shall have been a
misrepresentation or breach by the Investor with respect to any representation
or warranty made by the Investor in this Agreement and such misrepresentation or
breach cannot be cured prior to the Closing Date.
9. Miscellaneous.
9.1 Survival of Warranties; Indemnity. (a) The representations
and warranties of the Company and the Investor shall survive until the third
anniversary of the Closing Date, except that the representations and warranties
set forth in Sections 2(c), 2(d), 2(e), 2(m) and 3(f) shall survive until the
expiration of the applicable statute of limitations (or any extension thereof).
(b) Each party (the "Indemnitor") hereby indemnifies the other
party (the "Indemnitee") against and agrees to hold the other party harmless
from any and all damage, loss, liability and expense (including, without
limitation, reasonable expenses of investigation and
17
attorneys' fees and expenses in connection with any action, suit or proceeding
brought against the Indemnitee) ("Losses") incurred or suffered by the
Indemnitee arising out of the inaccuracy of any of the representations or
warranties made by the Indemnitor to the extent such representation or warranty
has survived the closing as provided in Section 9.1(a) above. The Indemnitee
shall give prompt written notice to the Indemnitor of the assertion of any claim
for which indemnity may be sought hereunder, specifying with reasonable
particularity the basis therefor, together with any supporting information
reasonably requested by the Indemnitee, and the amount of the Loss. If any
amount is due by the Indemnitor to an Indemnitee pursuant to this Section
9.1(b), the Indemnitor will make such payment not later than 60 days after
receipt by the Indemnitor of the notice and information referred to above.
(c) The Indemnitee shall give prompt notice to the Indemnitor
of the commencement of any suit, action or proceeding against such Indemnitee in
respect of which indemnity may be sought hereunder. The Indemnitor may, at its
own expense, participate in and, upon notice to the Investor, assume the defense
of any such suit, action or proceeding; provided that (i) the Indemnitor's
counsel is reasonably satisfactory to the Indemnitee, and (ii) the Indemnitor
shall thereafter consult with the Indemnitee upon the Indemnitee's reasonable
request for such consultation from time to time with respect to such suit,
action or proceeding. If the Indemnitor assumes such defense, the Indemnitee
shall have the right (but not the duty) to participate in the defense thereof
and to employ counsel, at its own expense, separate from the counsel employed by
the Indemnitor. The Indemnitor shall be liable for the fees and expenses of
counsel employed by the Indemnitee for any period during which the Indemnitor
has not assumed the defense thereof. Whether or not the Indemnitor chooses to
defend or prosecute any claim, all of the parties hereto shall cooperate in the
defense or prosecution thereof. The Indemnitor shall not be liable under this
Section 9.1 for any settlement effected without its consent or resulting from a
proceeding against the Indemnitee in which the Indemnitor was not permitted an
opportunity to participate, of any claim, litigation or proceeding in respect of
which indemnity may be sought hereunder unless (x) such settlement includes an
unconditional release of the Indemnitor from all liability on claims that are
the subject matter of such claim, litigation or proceeding, and (y) such
settlement shall not require that the Indemnitor incur any obligation (monetary
or otherwise) or forego any rights. The Indemnitor shall not effect any
settlement relating to a proceeding against the Indemnitee without the consent
of the Indemnitee (which consent shall not be unreasonably withheld), unless
such settlement includes money damages only and an unconditional release of the
Indemnitee from all Losses relating to such proceeding.
9.2 Successors and Assigns. The provisions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto; provided that neither the Company nor the
Investor may assign any of its rights (including without limitation rights under
Section 7) or obligations hereunder without the prior written consent of the
other party. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its conflict of laws rules.
18
9.4 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9.5 Captions and Headings. The captions and headings used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.6 Notices. Unless otherwise provided, any notice or other
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon personal or facsimile
delivery to the party to be notified or three business days after deposit with
an internationally recognized courier service, delivery fees prepaid, and
addressed to the party to be notified at the following respective addresses, or
at such other addresses as may be designated by written notice; provided that
any notice of change of address shall be deemed effective only upon receipt:
If to the Company or GP: Geotek Communications, Inc.
00 Xxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Y. Eitan, President and Chief
Executive Officer
Fax: (000) 000-0000
with a copy to: Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esquire
Fax: (000) 000-0000
If to the Investor: RDC-Xxxxxx Development Corporation Ltd.
X.X. Xxx 0000
Xxxxx, Xxxxxx
Attn: Mr. Reuven Kruppik
Fax: 000-000-0-000-0000
With a copy to: Zellermayer, Pelossof, Advocates
Europe Xxxxx
00 Xxxxx Xx'Xxxxxx Xxxxxxxxx
Xxx-Xxxx 00000 Xxxxxx
Attn: Xxxxxxx Xxxxxxxxxxx, Adv.
Fax: 000-000-0-000-0000
Failure or delay in delivering a copy of any notice hereunder
to a person (other than a party) designated by a party for receiving a copy
shall not derogate from the effectiveness of the delivery of such notice to such
party.
9.7 Finder's Fee. The Company, on the one hand, and the
Investor, on the other hand, represents and warrants to the other party hereto
that neither it nor any of its
19
officers, directors, general partners, agents, employees or affiliates, has
engaged or authorized any broker or finder to act, directly or indirectly, on
its behalf, in connection with the transactions contemplated by this Agreement,
or has consented to or acquiesced in anyone so acting, and it knows of no claim
by any other Person for compensation from it for so acting or of any basis for
such a claim. The provisions of this Section 9.7 shall survive any termination
of this Agreement.
9.8 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
9.9 Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each party will use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
Closing of the Transactions, including, without limitation, using all reasonable
efforts to assist the other party in satisfying the conditions set forth in
Sections 4 and 5 hereof.
9.10 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
9.11 Entire Agreement. This Agreement, including the Exhibits
and Schedule hereto, collectively constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, understandings and discussions between them, and all documents
delivered by or on behalf of the Company to the Investor and its agents and
representatives, with respect to such subject matter. The Exhibits and Schedule
of Exceptions hereto form an integral part of this Agreement.
20
IN WITNESS WHEREOF, the parties, each by its duly authorized signatory,
have executed this Agreement as of the date first above-written.
GEOTEK COMMUNICATIONS, INC.
By: _/s/__________________________
Name: ___________________
Title:___________________
GEOTEK PST, INC.
By: _/s/__________________________
Name: ___________________
Title: __________________
RDC-XXXXXX DEVELOPMENT CORPORATION LTD.
By: _/s/__________________________
Name:____________________
Title: __________________
21
TABLE OF DEFINED TERMS
Term Section Where Defined
"Accredited Investor" 3(j)
"Assignment Agreement" 2(d)
"Cash Purchase Price" 1.1
"Chief Scientist" 1.2
"Claim" 2(h)
"Closing" 1.2
"Common Stock" Preamble
"Company" Preamble
"Debenture" Preamble
"Exchange Act" 2(p)
"FCC" 2(g)
"Governmental Bodies" 2(i)
"Holder" 7.1(c)
"HSR Act" 3(l)
"Indemnitee" 8.1(b)
"Indemnitor" 8.1(b)
"Investor" Preamble
"Laws" 2(i)
"Losses" 8.1(b)
"Material Adverse Effect" 2(a)
"Orders" 2(i)
"PST" Preamble
Term Section Where Defined
"PST Ordinary Shares" Preamble
"PST Capital Note" Preamble
"PST Management Shares Preamble
"PST Securities" Preamble
"Permits" 2(n)
"Person" 2(k)
"Preferred Stock" 2(c)
"Purchase Price" 1.1
"Register, Registered, Registration" 7.1(a)
"Registrable Securities" 7.1(b)
"Restricted Securities" 3(k)
"SEC" 2(p)
"SEC Reports" 2(p)
"Schedule of Exceptions" 2
"Securities Act" 2(p)
"Subsidiaries" 2(b)
"Systems" 2(n)
"Tax" or "Taxes" 2(m)(i)
"Tax Returns" 2(m)(ii)
"Transactions" 1.1
"Transaction Documents" 2(d)
