[EXECUTION COPY]
PARENT GUARANTEE AGREEMENT
PARENT GUARANTEE AGREEMENT, dated as of November 3, 1999, between TRI-
LINKS INVESTMENT TRUST (the "Lender") and PICK COMMUNICATIONS, CORP. (the
"Guarantor").
RECITALS
A. The Lender and PICK Sat, Inc. (the "Borrower") are parties to that
certain Loan Agreement (the "Loan Agreement"), dated as of November 3,1999,
pursuant to which the Lender agreed to make certain loans to the Borrower.
Capitalized terms used but not defined herein have the meanings given to them in
the Loan Agreement.
B. The Borrower is a wholly-owned subsidiary of the Guarantor.
C. It is a condition to the obligation of the Lender to make Loans to
the Borrower under the Loan Agreement that the Lender and the Guarantor enter
into this Agreement pursuant to which the Guarantor will guarantee the
Obligations of the Lender under the Loan Documents.
D. The Lender and the Guarantor now wish to enter into this Agreement
to provide for the guarantee of the Obligations by the Guarantor.
AGREEMENT
In consideration of the premises and mutual covenants and the
agreements herein set forth, the parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE I
Guarantee
Section 1.01. Unconditional Guarantee.
(a) Guarantee. Subject to the provisions of Section 1.01(b) below, the
Guarantor hereby unconditionally guarantees to the Lender the due and punctual
payment of the Obligations when and as the Obligations shall become due, whether
at maturity, by acceleration or otherwise. The obligations of the Guarantor
under this Agreement constitute an absolute, unconditional, present and
continuing irrevocable guaranty of payment and not of collectibility. Subject to
the provisions of Section 1.01(b) below, if the Borrower shall fail to pay any
amount of the Obligations when due (after any applicable grace period) the
Guarantor shall immediately pay the amount to the Lender.
(b) Subordination of Guarantee. Each of the Guarantor and the Lender
acknowledges and agrees that the obligations of the Guarantor under this
Agreement are and shall be subordinate (to the minimum extent required by the
terms of the Senior Obligations) in right of payment to the Senior Obligations.
For purposes of this Agreement, the term "Senior Obligations" means the
obligations of the Guarantor under those certain 10% Senior Secured Notes due
April 27, 2002 of the Guarantor, as amended, in the aggregate principal amount
of $9,880,000.
(c) No Alteration. The Guarantor guarantees that the Obligations will
be paid to the Lender strictly in accordance with the terms of the Loan
Documents regardless of any statute, law, regulation, rule, writ, judgment,
injunction, order, decree or award now or hereafter in effect which might in any
way affect any of those terms or the rights of the Lender against the Borrower
or the Guarantor, or which might cause or permit to be invoked any alteration of
the time, amount or manner of payment by the Borrower or the Guarantor under
those terms.
(d) No Set-Off, Etc. To the fullest extent permitted by law, the
obligations of the Guarantor under this Agreement shall not be subject to any
counterclaim, set-off, deduction, diminution, abatement, recoupment, suspension,
deferment, reduction or defense (other than the full and strict compliance by
the Guarantor with those obligations) based on any claim that the Guarantor or
any other Person may have against the Borrower, the Lender or any other Person.
(e) Absolute and Unconditional Obligations. Subject to Section 1.01(b),
the obligations of the Guarantor under this Agreement shall be absolute and
unconditional, present and continuing and shall remain in full force and effect
and shall not be released, discharged or in any way affected by any circumstance
or condition of any nature (whether or not the Guarantor, the Borrower or the
Lender shall have any notice or knowledge of the circumstance or condition),
including, without limitation:
(i) the invalidity, illegality, unenforceability, discharge,
termination, cancellation or frustration, in whole or in part, of any
Obligation, Loan Document or other document;
(ii) the exercise or failure to exercise or enforce by any
Person any right, remedy, privilege or power under any Loan Document or
other document;
(iii) any demand or attempt to collect from, or failure to
demand or attempt to collect from, the Borrower, the Guarantor or any
other person under any Loan Document or other document;
(iv) the giving, acceptance, existence, non-existence,
validity, invalidity or value of any security or collateral (including,
without limitation, the Collateral) securing the Obligations or any
Guarantee of the Obligations or any attempt or failure to attempt to
realize upon that security, collateral or Guarantee;
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(v) the exchange, substitution, renewal, extension,
modification, compromise, release, discharge or failure to perfect for
any reason that security, collateral or Guarantee (including, without
limitation, the Guarantee under this Agreement);
(vi) any change in the time, place or manner of payment or the
waiver, consent, extension, renewal, indulgence, compromise, release,
settlement, refunding, funding, or any other forbearance or other
action taken, delayed or omitted by the Lender, the Borrower, the
Guarantor or any other Person under or in respect of any term or
provision of any Obligation, Loan Document or other document;
(vii) the termination, modification, alteration, amendment,
waiver, addition, deletion or other change to any Obligation, Loan
Document or other document or any provision of any of those documents;
(viii) the liquidation, dissolution, merger or consolidation
of the Borrower, the Guarantor or any other person, or the transfer by
the Borrower, the Guarantor or any other Person of all or any part of
its property or assets;
(ix) the voluntary or involuntary bankruptcy, receivership,
liquidation, insolvency, reorganization, arrangement, assignment for
the benefit of creditors or similar proceedings involving or affecting
the Borrower, the Guarantor any other Person or any of their property;
(x) the change in the ownership of the membership interests or
other equity interests in the Borrower or the change in or termination
of the corporate relationship between the Borrower and the Guarantor;
(xi) the release or discharge, by operation of law or
otherwise, of the Borrower, the Guarantor or any other person from any
Obligation or any provision of any Loan Document or other document; and
(xii) any other circumstance whatsoever, foreseen or
unforeseen, which may or might in any manner or to any extent vary the
risks of the Guarantor or might otherwise constitute a defense
available to or a legal or equitable discharge of a surety or a
guarantor or limit recourse against the Guarantor or otherwise.
IT IS THE PURPOSE AND INTENT OF THIS GUARANTEE AGREEMENT THAT THE
OBLIGATIONS OF THE GUARANTOR UNDER THIS AGREEMENT ARE ABSOLUTE AND
UNCONDITIONAL, PRESENT AND CONTINUING UNDER ANY AND ALL CIRCUMSTANCES.
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ARTICLE II
Representations and Warranties
Section 2.01. Representations and Warranties. The Guarantor hereby
represents and warrants to the Lender as follows as of the date hereof:
(a) Corporate Existence and Power. The Guarantor (i) is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) is duly
qualified under the laws of each jurisdiction in which qualification is
required to own, lease or license its assets and properties or to carry
on its business and (iii) has all necessary power and authority
required to own its assets and properties, to carry on its business and
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby.
(b) Authorization; Binding Effect. The execution and delivery
by the Guarantor of this Agreement, the performance by it of its
obligations under this Agreement and the consummation of the
transactions contemplated hereby has been duly authorized by all
necessary action. No other proceedings on the part of the Guarantor are
necessary to approve and adopt this Agreement or to approve the
consummation of the transactions contemplated hereby. This Agreement
has been duly executed and delivered by the Guarantor and this
Agreement is the legal, valid and binding obligation of the Guarantor
enforceable against it in accordance with its terms.
(c) Contravention. Neither the execution, delivery and
performance of this Agreement by the Guarantor nor the consummation of
the transactions contemplated hereby will (with or without notice or
lapse of time or both) (a) conflict with, violate or breach any
provision of the Guarantor's certificate of incorporation or by-laws,
(b) violate, conflict with or result in a breach of any statute, law,
regulation or order by which the Guarantor or any of its assets or
properties may be bound or affected, or (c) conflict with, result in a
default under, or give rise to a right of termination, cancellation, or
acceleration under any credit or loan agreement or any other material
contract or material agreement to which the Guarantor is a party or
pursuant to which the Guarantor or any of its assets or properties may
be bound or affected.
(d) Consents. No authorization, consent, order or approval of,
notice to or registration with, or any other action by any governmental
authority or other Person is required or advisable in connection with
(a) the due execution, delivery and performance by the Guarantor of
this Agreement, (b) the consummation of the transactions contemplated
by this Agreement, and (c) the exercise by the Lender of its rights and
remedies under this Agreement.
(e) Litigation. Except as set forth on Schedule 2.01(e), there
is no lawsuit, action, investigation, arbitration or other proceeding
(a) against the Guarantor, (b) that questions
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the validity of any of this Agreement or that relates to any of the
transactions contemplated by this Agreement, or (c) affecting any of
the Guarantor's assets or properties.
(f) Compliance with Laws. The Guarantor is in material
compliance with each statute, law, rule, regulation and order
applicable to the Guarantor, its business or its assets or properties.
ARTICLE III
Covenants
Section 3.01. Affirmative Covenants. Until the Obligations shall be
paid and otherwise performed in full, the Guarantor shall do the following:
(a) Maintenance of Records. Keep adequate records and books of
account reflecting all Guarantor's financial transactions.
(b) Compliance With Laws. Comply in all material respects with
all statutes, law, rules, regulations, writs, judgments, injunctions,
orders, decrees and awards of any Governmental Body applicable to
Guarantor or Guarantor's business, properties or operations, if a
failure to comply with any of the foregoing, individually or in the
aggregate, could materially and adversely affect its business,
properties, operations, prospects or conditions (financial or
otherwise) or its ability to perform Guarantor's obligations under this
Agreement.
(c) Payment of Taxes and Claims. Promptly pay and discharge
before they become delinquent, all taxes and similar charges assessed,
levied or imposed upon, and all claims against Guarantor or Guarantor's
property.
(d) Right of Inspection. At any reasonable time and from time
to time, permit the Lender or any of its representatives to examine and
make copies of and abstracts from Guarantor's records and books of
account, to visit Guarantor's properties and to discuss Guarantor's
business, properties, prospects and condition (financial or otherwise)
with any of its representatives and with the Guarantor's independent
accountants.
(e) Reporting Requirements. Furnish to the Lender:
(i) Certificate of no Default. At the end of each
quarter of each year, a certificate of the Guarantor
certifying that to the best of Guarantor's knowledge no
Default has occurred and is continuing by reason of the
existence of a condition or the occurrence of an event
specified by Section 6.01 of the Loan Agreement with respect
to the Guarantor or, if a Default has occurred and is
continuing, stating the
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details of the Default and the action that the Guarantor
proposes to take with respect to the Default;
(ii) Notice of Litigation. Promptly after the
commencement of each such matter, notice of all Actions
affecting the Guarantor, that, if adversely determined, could
materially and adversely affect the business, properties,
operations, prospects or condition (financial or otherwise)
the Guarantor or the ability of the Guarantor to perform her
obligations under this Agreement;
(iii) Notice of Defaults. Immediately upon the
occurrence of each Default of which Guarantor has knowledge, a
written notice stating the details of the Default; and
(iv) General information. Such other information
respecting the condition or operations, financial or
otherwise, of the Guarantor as the Lender may from time to
time reasonably request.
(v) Further Assurances. Promptly comply with all
requests of the Lender under Section 5.01(i) of the Loan
Agreement relating to Guarantor, this Agreement, the Pledge
Agreement or the Pledged Collateral.
Section 3.02. Negative Covenants. Until the Obligations shall be paid
and otherwise performed in full, the Guarantor shall not, and shall not permit
the Borrower to, do the following:
(a) Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, any Person, or acquire all or
substantially all of the assets or the business of any Person.
(b) Transactions with Affiliates. Enter into any transaction
(including, but not limited to, the purchase, sale or exchange of
property or the rendering of any service) with any Affiliate except in
the ordinary course of its business, pursuant to the reasonable
requirements of its business and upon fair and reasonable terms no less
favorable to it than would obtain in a comparable arm's length
transaction with a person not an Affiliate.
(c) Accounting Changes. Make or permit any significant change
in accounting policies or reporting practices, except for any change
required by GAAP.
(d) Stock of Subsidiary. Transfer of any of the equity
interest of any Subsidiary (including the Borrower (except with respect
to the possible transaction with SoftNet pursuant to the term sheet
attached hereto as Exhibit A)). Issue any additional equity interests
in the Borrower.
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(e) Sale of Assets. Permit the Borrower to sell a substantial
portion of its or their assets, whether by sale, assignment, merger or
otherwise.
ARTICLE IV
Termination, Waivers and Subrogation
Section 4.01. Continuing Guaranty. This Agreement shall continue to be
effective and shall remain in full force and effect until the Obligations shall
be paid and otherwise performed in full. For the purposes of this Agreement, the
Obligations shall not be deemed to have been paid and performed in full until
the holders or owners of the Obligations shall have indefeasibly received
payment of the Obligations in full in cash. Thereafter, this Agreement shall be
reinstated if at any time any payment of any of the Obligations is rescinded or
must otherwise be returned upon the insolvency, bankruptcy or reorganization of
the Borrower or any other person or otherwise, all as though the payment had not
been made.
Section 4.02. Waivers by the Guarantor. The Guarantor unconditionally
waives, to the full extent permitted by law:
(a) any defense, set-off or counterclaim which the Guarantor
may otherwise assert against the Borrower or the Lender;
(b) presentment, protest, demand for payment, promptness,
diligence, notice of protest, notice of any other action at any time
taken or omitted by the Lender and, generally, all demands and notices
of every kind in connection with any Loan Document or the Obligations,
including, but not limited to:
(i) notice of any of the matters referred to in
Section 1.01(e);
(ii) all notices which may be required by statute,
rule of law or otherwise, now or hereafter in effect, to
preserve intact any rights against the Guarantor under any
Loan Document or as a requirement to the enforcement,
assertion or exercise against the Borrower or the Guarantor of
any right, power, privilege or remedy conferred under any Loan
Document;
(c) any requirement to exhaust any rights or remedies or to
mitigate the damages resulting from any default under any Loan Document
or any other document or any requirement to protect, secure, perfect or
insure any Lien or any property subject to the Lien or take any other
action against any person or any collateral or other property;
(d) all claims that the sale price of any collateral was
inadequate or unreasonable for any reason and all other claims to
damages and demands of any nature against the Lenders;
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(e) all equities and rights of appraisal, stay and redemption
(whether now or hereafter existing), in each case arising out of the
Lender enforcing any of its rights and remedies under any Loan
Document;
(f) any exoneration or release from the Obligations resulting
from any loss by the Guarantor of its rights, if any', of subrogation
or contribution; and
(g) any other circumstance whatsoever, including, but not
limited to, those stated in Section 1.01(d), which might otherwise
constitute a defense to or a legal or equitable discharge or release of
a guarantor or surety or a party granting security or which might
otherwise limit recourse against the Guarantor.
Section 4.03. Subrogation; Subordination.
(a) The Guarantor shall not be subrogated, in whole or in part, to the
rights of the Lender against the Borrower under any Loan Document until the
payment in full of the Obligations.
(b) Any claim of the Guarantor against the Borrower arising from
payments made by the Guarantor under this Agreement shall be in all respects
subordinate to the payment and performance in full and discharge of the
Obligations.
(c) No payment under this Agreement by the Guarantor shall give rise to
any claim of the Guarantor against the Lender or any other holder of the
Obligations.
(d) Unless and until all Obligations shall have been paid and performed
in full, the Guarantor will not assign or otherwise transfer any claim against
the Borrower to any other person.
(e) The Guarantor agrees that any rights it may have against any other
guarantor of any of the Obligations for contributions, exoneration from payment
or otherwise, in respect of any amounts paid by the Guarantor under this
Agreement or which may continue to be owing under this Agreement, shall be
postponed until, and the Guarantor agrees not to seek to enforce any such right
until, the Obligations are paid and performed in full.
Section 4.04. Effect of Bankruptcy Proceedings. If an event permitting
the acceleration of any of the Obligations shall at any time have occurred and
be continuing, and the acceleration shall at such time be prevented by reason of
the pendency against the Borrower of a case or proceeding under a bankruptcy or
insolvency law, the Guarantor agrees that, for purposes of this Agreement and
the Guarantor's obligations under this Agreement, the Obligations shall be
deemed to have been accelerated with the same effect as if they had been
accelerated in accordance with the terms of the Loan Documents. In this event
the Guarantor shall immediately pay the full amount of the Obligations due and
owing by reason of the acceleration, without further notice or demand.
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ARTICLE V
Miscellaneous
Section 5.01. Expenses. The Guarantor agrees to pay to the Lender on
demand the amount of all expenses including the fees and expenses of its
counsel, which the Lender may pay or incur in exercising or enforcing its rights
under this Agreement.
Section 5.02. Provisions of Loan Agreement. Except as otherwise
expressly provided in this Agreement, the provisions of Sections 10. 0 1 through
10. 11 of the Loan Agreement shall apply to and are hereby incorporated into
this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
TRI-LINKS INVESTMENT TRUST, by Wilmington
Trust Company as Trustee
By: /s/ Xxxxx X. Xxxxxxxx, Xx.
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Name: Xxxxx X. Xxxxxxxx, Xx.
Title: Vice President
PICK COMMUNICATIONS, CORP.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Chairman
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