AMENDMENT TO
RECIPROCAL TELECOMMUNICATIONS AGREEMENT
Reference is made to the Reciprocal Telecommunications Agreement
between, PICKNET Inc. ("PICK") with IDT Corporation ("Customer"), dated November
11, 1996.
1. Customer shall lend PICK up to a total of Two Million Dollars
($2,000,000), subject to the following advancement schedule and conditions
therein ("Loan") and PICK agrees to repay said Loan within one (1) year
following the first advance made hereunder. PICK's parent company, PICK
Communications Corp. ("PCC"), agrees to absolutely and unconditionally guarantee
repayment of any advancements made to PICK by Customer and shall co-sign any
Notes executed by PICK as required hereunder. Upon advancements by Customer,
Customer shall be issued warrants by PCC to purchase shares of PCC common stock,
pursuant to the following schedule. The terms and conditions of the Loan are as
set forth in the draft Note attached hereto. Prior to any advancement being made
by Customer, PICK shall execute an original Note in the full amount of such
advancement.
a. Initial Advance $500,000.00
(upon signing this Amendment)
Warrants Issued 100,000 shares
b. Second Advance $1,000,000.00
(upon PICKs demonstrated ability to provide
the SERVICES hereunder to Customer,
regardless of whether or not Customer is
able to receive such SERVICES)
Warrants issued 200,000 shares
c. Third Advance $500,000
(Thirty (30) days after Second Advance)
Warrants issued 100,000 shares
The aforementioned warrants shall be issued and effective as of each advance
date, are exercisable for a period of one (1) year from the date of issuance, at
the market closing price on the date of Issuance. Such warrants shall enjoy
piggy-back registration rights. In the event that PCC becomes S-3 eligible, the
warrants shall enjoy demand registration rights, however, such registration
shall be entirely at Customer's expense. Additionally, the warrants will be
adjusted proportionately for any stock splits or dividends. Any warrants issued
in connection with advancements made by Customer in connection with the Loan,
will be issued by PCC in the amount of one (1) share per $5 loaned.
In the event that PICK fails to provide the SERVICES as set forth hereunder,
Customer shall have no obligation to make the third advance to PICK.
2. This Amendment shall remain in effect for one (1) year or until the
above Loan made by
1
Customer in connection herewith is repaid in full, whichever is later. There
shall be no penalty for prepayment of the Loan.
3. PICK will provide Customer with international long distance
telecommunications services, which shall be provided pursuant to an agreement
between PICK and GULFSAT Communications Co. ("GULFSAT"), and which shall be
provided to countries listed therein, as available ("SERVICES").
PICK will provide the SERVICES to Customer pursuant to the following:
a. Up to 10,000,000 minutes per month, at ten percent (10%) above
PICKs Cost, which shall be equal to the rates set forth in the GULFSAT
Agreement, plus $0.04 per minute; and,
b. In excess of 10,000,000 minutes per month, at "most favored
nation's" pricing (as compared with pricing for PICK's other carrier customers).
Notwithstanding the foregoing, in no event shall Customer's traffic to
any country in any month exceed fifty percent (50%) of PICK's GULFSAT capacity
for such country.
4. In addition to the foregoing, from the date PICK is providing
service to Customer, exclusive of the GULFSAT Services, which is operational and
successfully completed both as originating traffic and terminating traffic,
Customer shall make available to PICK $500,000 worth of long distance traffic at
preferred rates. Of the amount of said traffic utilized during any one month,
fifty percent (50%) of the cost of such traffic shall be used to offset any
payments due to PICK for the abovementioned GULFSAT traffic during the month of
such traffic being utilized by PICK and the remaining fifty percent (50%) of the
cost of such traffic shall be used to offset any payments due to PICK for the
aforementioned GULFSAT traffic during the month following such traffic being
utilized by PICK.
5. All payments made under this Amendment shall be payable on a weekly
basis and shall be forwarded via wire transfer.
6. During the term of this Amendment and thereafter as long as PICK has
an Agreement with GULFSAT, Customer shall not circumvent PICK's contractual
relationship with GULFSAT.
7. All parties hereto represent, warrant and covenant that each is
authorized by its respective Board of Directors to enter into this Amendment and
related Agreement, that entering into this and related Agreements will not
violate any law, or other agreement, and that each is a duly incorporated legal
entity. PICK and PCC shall have the Board of Directors of both corporate
entities ratify the execution of all documents in connection with this
Agreement, within ten (10) days of the effective date of this Agreement. Failure
to do so will result in PICK and PCC's obligation to immediately return any
advances made hereunder.
2
8. Except as specifically set forth above in this Amendment, all of the
other terms and conditions of the referenced Agreement are hereby ratified and
confirmed.
The foregoing Amendment is hereby accepted and agreed to this 12th day of
February, 1998.
PICKNET, Inc. IDT Corporation
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxx
----------------------- ------------------------------
Xxxxx Xxxxx Xxxxxx Xxxxxxx
Title: President & CEO Title: Executive Vice President-Sales
PICK Communications Corp.
By: /s/ Xxxxx Xxxxx
-----------------------
Xxxxx Xxxxx
Title: President & CEO
3
