AMENDMENT NO. 1 TO
GENERAL SECURITY AGREEMENT
AMENDMENT NO. 1 dated as of December 20, 1999 (this "Amendment") to
GENERAL SECURITY AGREEMENT, dated as of July 29, 1998 (the "Agreement"), by and
between PICK COMMUNICATIONS CORP., a Nevada corporation ("Debtor"), and
COMMONWEALTH ASSOCIATES, a New York limited partnership, as agent ((the "Agent")
for the investors (the "Investors") from time to time (the Agent, acting in such
capacity, the "Secured Party.") Terms with initial capital letters used herein
without definition shall have the meanings set forth in the Agreement.
WHEREAS, the Debtor has agreed to sell to Xxxxx Investments Ltd., a
British Virgin Islands Corporation ("Xxxxx") all of the outstanding capital
stock of PICK Net Inc., a New Jersey corporation, and PICK Net UK, PLC, a
corporation formed under the laws of England, both wholly-owned subsidiaries of
the Debtor (collectively "PICK Net") pursuant to a Stock Purchase Agreement
dated as of September 13, 1999 ("Stock Purchase Agreement");
WHEREAS, Atlantic Tele-Network Inc. ("ATN") has entered into a Credit
Agreement dated as of September 13, 1999 with PICK Net (the "Credit Agreement")
pursuant to which ATN in its discretion will lend up to $5,000,000 to PICK Net;
WHEREAS, ATN has heretofore made and may hereafter make unsecured loans
to the Debtor;
WHEREAS, pursuant to the requirements of the Credit Agreement, ATN has
asked the Debtor to have the Secured Party enter into this Amendment in order to
allow ATN to make loans to PICK Net pursuant to the Credit Agreement and to make
loans to the Debtor;
WHEREAS, the Debtor has requested that the Secured Party allow it to
release from Collateral certain personal property necessary to sell the capital
stock of PICK Net and allow Xxxxx to then operate PICK Net; and
WHEREAS, the Secured Party has agreed to Debtor's request and is
willing to amend the Agreement subject to the terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Debtor, the Agent and the Investors agree as follows:
ARTICLE I
Definitions
Section 1.01 Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby.
ARTICLE II
Amendments
Section 2.01. Amendments to Section 1 of the Agreement. Section 1 of
the Agreement, effective as of the date hereof, is amended as follows:
(a) The following definition is hereby amended and restated as follows:
"Collateral" means, except for the property and contracts listed on
Schedule 1 attached hereto, all of the Debtor's right, title and interest in and
under or arising out of each and all of the following:
All personal property and fixtures of the Debtor of any
type or description, wherever located and now existing or hereafter
arising or acquired, including but not limited to the following:
(i) all of the Debtor's goods including, without
limitation:
(a) all inventory, including without limitation,
equipment held for lease, whether raw materials, in
process or finished, all material or equipment
usable in processing the same and all documents of
title covering any inventory (all of the foregoing,
"Inventory"), including without limitation that
located at the locations listed on Schedule I
annexed hereto;
(b) all equipment (the "Equipment") employed in
connection with the Debtor's business, together with
a present and future additions, attachments and
accessions thereto and all substitutions therefor
and replacements thereof, including without
limitation that located at the locations fisted on
Schedule I annexed hereto;
(ii) all of the Debtor's present and future accounts,
accounts receivable, general intangibles, contracts
and contract rights (herein sometimes referred to as
"Receivables"), including but not limited to the
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Debtor's rights (including rights to payment) under
all Assigned Agreements, together with
(a) all claims, rights, powers or privileges and
remedies of the Debtor relating thereto or arising
in connection therewith including, without
limitation, all rights of the Debtor to make
determinations, to exercise any election (including,
but not limited to, election of remedies) or option
or to give or receive any notice, consent, waiver or
approval, together with full power and authority to
demand, receive, enforce, collect or receipt for any
of the foregoing or any property which is the
subject of the Assigned Agreements, to enforce or
execute any checks, or other instruments or orders,
to file any claims and to take any action which (in
the opinion of the Secured Party) may be necessary
or advisable in connection with any of the
foregoing,
(b) all liens, security, guaranties, endorsements,
warranties and indemnities and all insurance and
claims for insurance relating thereto or arising in
connection therewith,
(c) all rights to property forming the subject
matter of the Receivables including, without
limitation, rights to stoppage in transit and rights
to returned or repossessed property,
(d) all writings relating thereto or arising in
connection therewith including without limitation,
all notes, contracts, security agreements,
guaranties, chattel paper and other evidence of
indebtedness or security, all powers-of-attorney,
all books, records, ledger cards and invoices, all
credit information, reports or memoranda and all
evidence of filings or registrations relating
thereto,
(e) all catalogs, computer and automatic machinery
software and programs, and the like pertaining to
operations by the Debtor in, on or about any of its
plants or warehouses, all sales data and other
information relating to sales or service of products
now or hereafter manufactured on or about any of its
plants, and all accounting information pertaining to
operations in, on or about any of its plants, and
all media in which or on which any of the
information or knowledge or data is stored or
contained, and all computer programs used for the
compilation or printout of such information,
knowledge, records or data, and
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(f) all accounts, contract rights, general
intangibles and other property rights of any nature
whatsoever arising out of or in connection with the
foregoing, including without limitation, payments
due and to become due, whether as repayments,
reimbursements, contractual obligations,
indemnities, damages or otherwise;
(iii) all other personal property of the Debtor of any
nature whatsoever, including, without limitation,
all accounts, bank accounts, deposits, credit
balances, contract rights, inventory, general
intangibles, goods, equipment, instruments, chattel
paper, machinery, furniture, furnishings, fixtures,
tools, supplies, appliances, plans and drawings,
together with all customer and supplier fists and
records of the business, and all property from time
to time described in any financing statement (UCC-1)
signed by the Debtor naming the Agent as secured
party; and
(iv) all additions, accessions, replacements,
substitutions or improvements and all products and
proceeds including, without limitation, proceeds of
insurance, of any and all of the Collateral
described in clauses (i) through (iii) above.
ARTICLE III
Ratifications, Representations, Warranties and Covenant
Section 3.01. Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and, except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement, including, without
limitation, all financial covenants contained therein, are ratified and
confirmed and shall continue in full force and effect. Agent, Debtor and
Investors agree that the Agreement as amended hereby shall continue to be legal,
valid, binding and enforceable in accordance with its terms.
Section 3.02. Representations and Warranties. The Debtor hereby
represents and warrants to Agent and Investors that the execution, delivery and
performance of this Amendment and all other loan, amendment or security
documents to which Debtor is or is to be a party hereunder (hereinafter referred
to collectively as the "Loan Documents") executed and/or delivered in connection
herewith, have been authorized by all requisite corporate action on the part of
Debtor and will not violate the Articles of Incorporation or Bylaws of Debtor.
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ARTICLE IV
Conditions Precedent
Section 4.01. Conditions. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent (unless
specifically waived in writing by the Secured Party):
(a) Agent shall have received all of the following, each dated
(unless otherwise indicated) as of the date of this Amendment, in form
and substance satisfactory to Agent in its sole discretion:
(i) Company Certificate. A certificate executed by the
Secretary or Assistant Secretary of Debtor certifying (A) that
Debtor's Board of Directors has adopted, approved, consented
to and ratified the resolutions attached thereto which
authorize the execution, delivery and performance by Debtor of
the Amendment and the Loan Documents and (B) that except as
certified and attached thereto, neither the Articles of
Incorporation nor Bylaws of Debtor have been amended since the
date of the Agreement;
(ii) Other Documents. Debtor shall have executed and
delivered such other documents and instruments as Agent may
require.
(b) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to the Secured Party and their legal counsel.
ARTICLE V
Miscellaneous
Section 5.01. Survival of Representations and Warranties. All
representations and warranties made in the Agreement or any other document or
documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
Agent or any Investor or any closing shall affect the representations and
warranties or the right of Agent and each Investor to rely thereon.
Section 5.02. Reference to Agreement. The Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof or pursuant to the
terms of the Agreement as amended hereby, are hereby amended so that any
reference therein to the Agreement shall mean a reference to the Agreement as
amended hereby.
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Section 5.03. Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5.04. APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN
DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
Section 5.05. Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Agent, Investors and Debtor and their
respective successors and assigns; provided, however, that Debtor may not assign
or transfer any of its rights or obligations hereunder without the prior written
consent of Agent. Agent and each Investor may assign any or all of their rights
or obligations hereunder without the prior consent of any Debtor.
Section 5.06. Counterparts. This Amendment maybe executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the same
instrument.
Section 5.07. Effect of Waiver. No consent or waiver, express or
implied, by Agent or any Investor to or of any breach of or deviation from any
covenant or condition of the Agreement or duty shall be deemed a consent or
waiver to or of any other breach of or deviation from the same or any other
covenant, condition or duty. No failure on the part of Agent or any Investor to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power, or privilege under this Amendment, the Agreement or any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under this Amendment, the Agreement
or any other Loan Document preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The rights and remedies
provided for in the Agreement and the other Loan Documents are cumulative and
not exclusive of any rights and remedies provided by law.
Section 5.08. Headings. The headings, captions and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 5.09. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN- AGENT,
THE LENDERS AND BORROWERS AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN AGENT, THE LENDERS AND BORROWERS.
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IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
PICK COMMUNICATIONS CORP, as Debtor
By: /s/ Xxxxx Xxxxx
-----------------------------------------
Name: Xxxxx Xxxxx
Title: Chairman of the Board of Directors
COMMONWEALTH ASSOCIATES, as Agent,
as Secured Party
By: COMMONWEALTH MANAGEMENT CO.,
INC., its General Partner
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Financial Officer
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