PICKSAT OPTION AGREEMENT
This Option Agreement is made as of September 13, 1999 among PICK
Communications Corp., a Nevada corporation ("PICK Communications"), PICKSat,
Inc., a Delaware corporation ("PICKSAT") and Atlantic Tele-Network, Inc., a
Delaware Corporation ("ATN").
W I T N E S S E T H
WHEREAS, PICK Communications has agreed to sell to Xxxxx Investments
Ltd., a British Virgin Islands Corporation ("Xxxxx") all of the outstanding
capital stock of PICKNet Inc. and PICKNet UK PLC (collectively the "Companies")
pursuant to a Stock Purchase Agreement of even date herewith ("Stock Purchase
Agreement");
WHEREAS, ATN has entered into a Credit Agreement of even date herewith
with the Companies (the "Credit Agreement") pursuant to which ATN in its
discretion will lend up to $5,000,000 to the Companies.
WHEREAS, ATN has heretofore made and may hereafter make loans to PICK
Communications and PICKSAT; and
WHEREAS, PICK Sat is entering into this Option Agreement in order to
induce ATN to make loans to the Companies pursuant to the Credit Agreement and
to make loans to PICK Communications and PICKSAT and that ATN would not
otherwise make these loans. Capitalized terms used herein which are not defined
herein have the same meaning as in the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and intending to be
legally bound hereby, the parties here to agree as follows:
1. Investment Option. PICKSAT hereby grants to ATN the option (the "Investment
Option") exercisable by written notice to PICKSAT, with a copy to PICK
Communications, at any time after the date hereof and not later than 60 days
after the Schedule Date to purchase from PICKSAT 1,990,000 shares (the
"Investment Shares") of PICKSAT common stock at a price of $4.02 per share
(after giving effect to the changes in PICKSAT's capital stock contemplated by
Section 3.1 hereof). Schedule 1 to this Agreement sets out the installments in
which such payments are to be made and the goals which are required to be
achieved by PICKSAT (unless waived in writing by ATN) for each such installment.
Delivery by ATN to PICK Communications of a written notice of exercise of the
Investment Option will constitute a legally binding commitment of ATN to
purchase the Investment Shares on the terms and conditions specified in this
Agreement. The Investment Option and this Option Agreement shall expire, unless
the Investment Option is theretofore exercised by ATN, within sixty (60) days
after the Schedule Date.
1.1 ATN has heretofore and may from time to time hereafter make loans
to PICKSAT. Such loans, including all accrued and unpaid interest thereon, shall
be credited against the purchase price for the Investment Shares.
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1.2 Immediately upon receipt of notice from ATN exercising the
Investment Option and payment of any installment of the purchase price due at
the time of such exercise, PICK Communications and each subsidiary of PICK
Communications other than PICKSAT shall release and forever discharge PICKSAT
from any and all inter-company liabilities of PICKSAT, including any and all
inter-company indebtedness, arising on or prior to the date of such release, and
PICKSAT shall release and forever discharge PICK Communications and each
subsidiary of PICK Communications, other than PICKSAT, from any and all
inter-company liabilities, including inter-company indebtedness, to PICKSAT
arising on and prior to the date of such release. Within 10 days after the
receipt by PICKSAT and PICK Communications of notice from ATN exercising the
Investment Option, PICK Communications shall furnish to ATN executed releases
from PICK Communications and each of its subsidiaries, other than PICKSAT,
evidencing the release and discharge of PICKSAT from the above mentioned
liabilities.
2. Purchase Option. PICKSAT hereby grants ATN the option (the "Purchase
Option"), exercisable by written notice to PICKSAT, with a copy to PICK
Communications, not later than 18 months after the Schedule Date, accompanied by
a check or wire transfer of any cash included in the purchase price and a
certificate or certificates for any shares of ATN common stock included in the
purchase price, to purchase from PICKSAT 6,346,000 shares (the "Purchase
Shares") of PICKSAT common stock (after giving effect to the changes in
PICKSAT's capital stock contemplated by Section 3.1 hereof) for an aggregate
purchase price consisting of (i) 500,000 shares of ATN common stock (subject to
adjustment as provided in Section 2.5 below) or (ii) $15,000,000 payable in
cash, whichever of the amounts described in clause (i) or (ii) above amounts to
the greater value when ATN common stock is valued in accordance with Section 2.3
below. The payment in accordance with clause (ii) above may be in any
combination of shares of ATN common stock or cash as determined by ATN (subject
to Section 2.4 below).
2.1 The Purchase Option shall not be exercisable by ATN unless ATN has
theretofore exercised the Investment Option and purchased all of the Investment
Shares.
2.2 The Purchase Option shall expire, unless theretofore exercised by
ATN, 18 months and one day after the Schedule Date.
2.3 The shares of ATN common stock issuable upon exercise of the
Purchase Option shall be valued on the date of exercise at the average closing
price of ATN common stock (as reported by the Wall Street Journal or, if not so
reported, as reported by another independent recognized source for obtaining
stock price quotations selected by ATN) for the 20 business days immediately
preceding the date of exercise of the Purchase Option. However, if on the date
of exercise of the Purchase Option the shares of ATN common stock issuable upon
exercise of the Purchase Option shall not be registered for original issuance to
PICKSAT under an effective registration statement filed pursuant to Section 6
hereof, then (i) ATN shall register such shares in accordance with Section 6
hereof, (ii) such shares shall be revalued at the average closing price of ATN
common stock (as reported by the Wall Street Journal or, if not so reported, as
reported by another independent recognized source for obtaining stock price
quotations selected
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2.4 by ATN) for the 20 business days immediately preceding the
effective date of the registration statement covering such shares, (iii) on the
effective date of such registration statement ATN shall deliver additional
shares to PICKSAT, or PICKSAT shall return shares to ATN as may be required to
reflect such revaluation and (iv) if the value so determined is less than the
average closing price of ATN common stock (as reported by the Wall Street
Journal or, if not so reported, as reported by another independent recognized
source for obtaining stock price quotations selected by ATN) for the 20 business
days immediately preceding the date of exercise of the Purchase Option, ATN
shall have the option on or prior to the effective date of the registration (a)
to substitute cash for some or all of the shares of ATN common stock initially
delivered to PICK Sat or (b) to rescind the exercise of the Purchase Option. If
ATN shall so rescind its exercise of the Purchase Option, such Option shall
continue in effect until it expires as provided in Section 2.2 hereof.
2.5 In no event shall the number of shares of ATN common stock issuable
pursuant to clause (ii) of the initial paragraph of this Section 2 exceed 38% of
the outstanding common stock of ATN after giving effect to the issuance of such
shares.
2.6 The reference to 500,000 shares of ATN common stock in this section
2 shall be subject to adjustment in the event of any subdivision or combination
of ATN common stock into a greater or lesser number of shares and in the event
of the payment by ATN of a dividend on its common stock paid in shares of common
stock of ATN. Upon each such event, the reference to 500,000 shares of ATN
common stock shall be adjusted to be the number of shares of ATN common stock
which a record holder of 500,000 shares of ATN common stock immediately prior to
such adjustment would own or be entitled to receive after given effect to such
subdivision, combination or stock dividend. If, prior to the exercise or
expiration of the Purchase Option, ATN shall merge into or consolidate with any
other corporation in a transaction in which holders of ATN Common Stock shall
receive capital stock of another corporation or shall sell or transfer all or
substantially all of its assets in a transaction in which holders of ATN common
stock shall receive capital stock of another corporation, the references to ATN
common stock in this section 2 shall be changed to refer to the capital stock of
the other corporation received in such transaction by holders of ATN common
stock, and the reference to 500,000 shares of ATN common stock shall be changed
to refer to the kind and amount of shares of capital stock receivable upon such
merger, consolidation, sale or transfer by a record holder of 500,000 shares of
ATN common stock.
2.7 If at the date of exercise of the Purchase Option PICKSAT shall
have outstanding any employee stock options or any PICKSAT common stock issued
upon exercise of employee stock options, the number of shares of PICKSAT common
stock purchasable by ATN under the Purchase Option shall be increased by the
aggregate number of shares of PICKSAT common stock issued or issuable under
employee stock options, and the purchase price payable on exercise of the
Purchase Option shall be increased by $2.36 per share (payable in cash or in
shares of ATN common stock or any combination thereof valued as provided in the
initial paragraph of this Section 2) multiplied by the number of such additional
shares included in the Purchase Shares.
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2.7 Notwithstanding any provision to the contrary contained in this
Option Agreement, if PICK Communications is able to obtain, in form and
substance satisfactory to ATN, the required consent of the holders of the
necessary principal amount of PICK Communications' 10% Senior Secured Notes, as
amended, due on April 27, 2002, to the sale of Purchase Shares, the guarantees
and the pledge described below, within 55 days after the Schedule Date, then
PICK Communications at its option, exercisable by notice in writing to ATN and
PICKSAT on or before the close of business on the 55th day after the Schedule
Date accompanied by executed Guarantees and Pledge Agreement as described below
and stock certificates and executed stock transfer forms as contemplated by the
Pledge Agreement described below, may cause the following changes to be made in
this Option Agreement:
(i) the Purchase Option shall be for 3,110,000 shares of
issued and outstanding PICKSAT common stock to be
purchased from PICK Communications for the same aggregate
purchase price specified in the initial paragraph of this
Section 2;
(ii) the increase in the number of shares of PICKSAT
common stock purchasable under the Purchase Option, as
described in Section 2.6 hereof shall be 50% of the
aggregate number of shares of PICKSAT common stock issued
or issuable under employee stock options and the purchase
price payable on exercise of the Purchase Option shall be
increased by $4.82 per share;
(iii) PICK Communications shall have the registration
rights granted to PICKSat in Section 6 of this Option
Agreement;
(iv) PICK Communications shall guarantee, with Guarantees
in substantially the forms attached as Exhibits 2.7A and
2.7B hereto all outstanding loans from ATN to PICKSat (if
the Investment Option shall have not yet been exercised)
and from ATN to PICKNet, Inc. and PICKNet UK PLC (if the
closing under the Stock Purchase Agreement between PICK
Communications and Xxxxx Investments Ltd. shall not yet
have occurred); and
(v) PICK Communications shall execute and deliver to ATN a
Pledge Agreement in substantially the form of Exhibit 2.7C
hereto together with certificates and stock transfer forms
endorsed in blank, for the shares of PICKSAT common stock
listed in attachment 1 to said form of Pledge Agreement.
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3. Certain Covenants of PICK Communications and PICKSAT.
3.1 Certificate of Incorporation and By-Law Changes. Within 30 days
from the date of this Agreement PICK Communications and PICKSAT will take all
necessary actions to amend the certificate of incorporation and bylaws of
PICKSAT (i) to increase the authorized capital stock to at least 20,000,000
shares of common stock and to change the currently issued and outstanding shares
of PICKSAT common stock into 8,010,000 shares of common stock, (ii) to provide
that holders of PICKSAT common stock have cumulative voting for the election of
directors, (iii) to provide that PICKSAT has a minimum of five directors on its
board of directors and (iv) to provide for the relative authority of the board
of directors, chief executive officer and chief operating officer of PICKSAT as
provided in Schedule 3.1 hereof.
3.2 Board and Management Representation. Until such time as ATN is
required to purchase the Investment Shares and so long thereafter as ATN owns at
least 10% of the outstanding capital of PICKSAT, PICK Communications shall cause
two persons appointed by ATN to be elected to the board of directors of PICKSAT
and one person appointed by ATN to be elected as chief operating officer of
PICKSAT, and PICK Communications shall permit ATN to remove and replace such
persons on the board of directors of PICKSAT or as chief operating officer of
PICKSAT at any time. The board of directors of PICKSAT may, by unanimous vote of
all the directors in office, at any time remove a person appointed by ATN to be
the chief operating officer of PICKSAT; however, in such event, ATN shall be
permitted to select a replacement chief operating officer.
Upon ATN's exercise of the Purchase Option and so long thereafter as
PICK Communications owns at least 10% of the outstanding capital of PICKSAT,
PICK Communications shall cause one person appointed by PICK Communications to
be elected to the board of directors of PICKSAT, and PICK Communications shall
be permitted to remove and replace such person on the board of directors of
PICKSAT at any time.
3.3 PICKSAT Activities During Term of the Purchase Option.
(i) During the period from the date of this Agreement until
the exercise or expiration of the Purchase Option, except with the written
consent of ATN, PICKSAT shall not, and PICK Communications will not permit
PICKSAT to:
(a) authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through
the issuance or granting of options, warrants,
convertible or exchangeable securities, commitments,
subscriptions, rights to purchase or otherwise) any
shares of capital stock of PICKSAT, except for
options granted pursuant to an employee stock option
plan limited to not more than 5% of the total issued
and outstanding capital stock of PICKSAT;
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(b) subdivide or combine PICKSAT's outstanding shares of
common stock into a greater or lesser number of
shares or pay or make any dividend or distribution in
cash, property, stock, securities, or otherwise on or
in respect of PICKSAT's outstanding common stock;
(c) engage in any activities business which are not
contemplated to be engaged in at that time by the
projections of expense and capital expenditure of
PICKSAT included in the PICKSAT Business Plan, dated
September 8, 1999 (the "PICKSAT Business Plan")
heretofore furnished by PICK Communications to ATN;
(d) engage in any financing transaction or any other
transaction outside the ordinary cause of business or
create, incur or assume any Lien on any assets except
in the ordinary course of business and as
contemplated by the PICKSAT Business Plan, except
that PICKSAT may borrow up to $2 million to replace
the $2 million of equity financing (in addition to
the proceeds from the issuance of the Investment
Shares hereunder) contemplated by the PICKSAT
Business Plan;
(e) amend the Certificate of Incorporation or bylaws of
PICKSAT, except as provided in Section 3.1 herein; or
(f) merge into or consolidate with any other entity or
permit any other entity to merge into or consolidate
with PICKSAT or liquidate or sell or dispose of any
material assets of PICKSAT other than sales of assets
which are in the ordinary course of business and
contemplated by the PICKSAT Business Plan.
(ii) During the period from the date of this Agreement until
the exercise or expiration of the Purchase Option, neither PICK Communications
nor PICKSAT shall solicit, initiate, encourage, enter into or continue any
negotiations or discussions of any type, directly or indirectly, with or furnish
any information or data to, any person relating to any sale of PICKSAT or any
substantial part of the business or assets of PICKSAT or any merger or
consolidation involving PICKSAT.
3.4 Reports; Access. Until the exercise or expiration of the Purchase
Option, PICKSAT shall, and PICK Communications shall cause PICKSAT to,
(i) furnish to ATN:
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(a) within 20 days after the end of each
calendar month, financial statements of
PICKSAT together with other operating data
with respect to PICKSAT's progress in
achieving the guidelines specified in
Schedule 1, in such form as ATN may
reasonably request;
(b) within 45 days after the last day of March,
June and September of each year, quarterly
financial statements of PICKSAT in such form
as ATN may reasonably request; and
(c) within 90 days after the end of each
calendar year, audited financial statements
of PICKSAT in such form as ATN may
reasonably request.
Each of the foregoing statements and reports
shall be accompanied by a certificate of the
chief executive officer of PICK
Communications and the chief financial
officers of PICK Communications and PICKSAT
that such statement or report is accurate
and complete and fairly presents the
information contained therein.
(ii) permit ATN, through its officers, employees, attorneys,
accountants, representatives, lenders, consultants and other agents
(collectively, the "Agents"), to make such investigation of the business and the
assets and operations of PICKSAT during normal business hours and on two
business days prior notice, whenever possible, and such examination of the
books, records, properties, assets and financial condition of PICKSAT, as ATN
shall deem necessary or appropriate, and cause PICKSAT to cooperate fully with
any such investigation and examination.
(iii) promptly notify ATN of:
(a) any notice or other communication from any
person alleging that the consent of such
person is or may be required in connection
with this Option Agreement or the exercise
of the Investment Option or the Purchase
Option; and
(b) any notice or other communication from any
Governmental Body in connection with or
pertaining to this Option Agreement or the
Investment Option or the Purchase Option.
3.5 Transactions with Affiliates. Until such time as ATN is required to
purchase at least $4.5 million of Investment Shares and so long thereafter as
ATN owns at least 10% of the outstanding common stock of PICKSAT, PICKSAT shall
not, and PICK Communications shall not permit PICKSAT to, engage in any
transaction or agreement with PICK Communications or any affiliate of PICK
Communications except on terms which are at least as favorable to PICKSAT as
could be obtained from an independent third party, and which do not involve,
directly or indirectly, any loans or extensions of credit by PICKSAT to PICK
Communications or any of its affiliates.
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3.6 Mergers and Acquisitions by PICKSAT. Until such time as ATN is
required to purchase at least $4.5 million of Investment Shares and so long
thereafter as ATN shall own at least 10% of the outstanding common stock of
PICKSAT, except with the consent of ATN, PICKSAT shall not, and PICK
Communications shall not permit PICKSAT to:
(i) merge or consolidate with any other corporation
except for a merger or a consolidation in which the
outstanding common stock of PICKSAT immediately prior
to such transaction constitutes or is changed into or
exchanged for at least 90% of the outstanding capital
stock of the continuing corporation;
(ii) sell all or substantially all of its assets except
for a sale to another corporation in a transaction in
which the outstanding capital stock of PICKSAT
immediately prior to such transaction is exchanged
for or converted into at least 90% of the outstanding
capital stock of the purchasing corporation or a
corporation which owns, directly or indirectly, all
of the outstanding capital stock of the purchasing
corporation;
(iii) acquire any other business except for an acquisition
in which the total of PICKSAT's investment in and
advances to such other businesses do not exceed 10%
of PICKSAT's total assets.
3.7 Sale of PICKSAT Common Stock. Until the exercise or expiration of
the Purchase Option and thereafter, so long as ATN shall own any PICKSAT common
stock, PICK Communications shall not sell to a single purchaser or a "group" (as
that term is defined in Regulation 13G of the Rules and Regulations of the
Securities and Exchange Commission issued under the Securities Exchange Act of
1934, as amended) shares of PICKSAT common stock representing 10% or more of
PICKSAT's then outstanding common stock without first giving ATN at least 5
business days prior written notice of the identity of such purchaser or
purchasers and the terms of such proposed sale and providing ATN the
opportunity, at ATN's option, (i) to purchase all such stock on the same terms
as offered by such purchaser or group or (ii), if at that time ATN shall own
less than a majority of the outstanding PICKSAT common stock, to participate
proportionally with PICK Communications (in proportion to the total number of
shares of PICKSAT common stock owned by PICK Communications and ATN,
respectively) in such sale. If ATN shall desire to purchase such stock or to
participate proportionately in such sale, it shall give written notice to PICK
Communications within such 5 business day period. Such notice shall constitute a
binding commitment of ATN, and ATN shall be obligated, in the case of a sale by
ATN, to deliver its certificates for the shares of PICKSat common stock to be
sold by ATN at the time and place that such sale occurs, and in the case of a
purchase of stock by ATN to close such purchase on the terms of the proposed
transaction within 15 days after the expiration of such 5 business day period.
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3.8 Public Announcements. PICK Communications and PICKSAT will consult
with ATN before issuing any press release or otherwise making any public
statement with respect to this Option Agreement, the Investment Option or the
Purchase Option or the exercise of the Investment Option or the Purchase Option,
and will not issue any such press release or make any such public statement
without the prior approval of ATN except as may be required by applicable law in
which event ATN shall have the right to review and comment upon (but not
approve) any such press release or public statement prior to its issuance.
3.9 Confidentiality.
(i) Until the exercise or expiration of the Purchase
Option and, if such Purchase Option is exercised by
ATN, for a period of five years thereafter, PICK
Communications shall hold in strict confidence, and
shall use its best efforts to cause all of its Agents
to hold in strict confidence, unless compelled to
disclose by judicial or administrative process, or by
other requirements of law, all Confidential
Information concerning PICKSAT which PICK
Communications may now or hereafter have and PICK
Communications shall not use or disclose to others,
or permit the use or disclosure of, any such
Confidential Information and will not release or
disclose such information to any other person.
(ii) If the Purchase Option is exercised and if requested
by ATN, PICK Communications shall deliver to ATN all
tangible evidence of such Confidential Information
which may be in the possession of PICK Communications
or its Agents or provide, at Pick Communication's
option, a certificate to ATN stating that such
information has been destroyed.
(iii) The term Confidential Information shall mean any and
all information about PICKSAT or the Business,
including all such information disclosed in the
schedules to this Option Agreement, except to the
extent such information has been
(a) disclosed in public filings of any of the
parties hereto under the securities laws;
(b) hereafter made known to PICK Communications
from a third party, to the knowledge of PICK
Communications not in breach of any
confidentiality requirement; or
(1) made public through no fault of PICK
Communications or any of its Agents.
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(iv) In the event that PICK Communications or any of its
Agents are requested in any legal or governmental
proceeding to disclose any of the Confidential
Information, PICK Communications or such Agents, as
the case may be, shall give ATN prompt written notice
of such request so that ATN may seek an appropriate
order or decree restricting such disclosure. If in
the absence of such an order or decree, PICK
Communications or its Agents are none the less
compelled to disclose any Confidential Information,
PICK Communications or such Agent, as the case may
be, may disclose such information in such proceeding
without liability hereunder, provided that PICK
Communications or such Agent gives ATN written notice
of the Confidential Information to be disclosed as
far in advance of its disclosure as is practicable
and, upon ATN's request and at ATN's expense, PICK
Communications or such Agent shall use its reasonable
commercial efforts to assist ATN to obtain assurances
that confidential treatment will be accorded to such
information.
(v) Each Agent of PICK Communications shall be advised of
this Agreement by PICK Communications and shall agree
in writing to be bound by the terms of this Agreement
and not to disclose such information to any other
individual or entity other than to another Agent or
to PICK Communications or as permitted by subsection
(i) of this Section.
(vi) PICK Communications understands and acknowledges the
economic and competitive value and the confidential
nature of the Confidential Information and further
agrees that the breach of this Section by it or its
Agents will result in irreparable harm to ATN and
PICKSAT and that remedies at law, alone, will be
inadequate to remedy any breach of this Section and,
therefore, PICK Communications (a) consents to the
issuance of injunctive or other equitable relief
against it and its Agents to prevent or end any
violation of this Section in such event and (b)
waives the requirements of the posting of any bond or
other security by ATN or PICKSAT in connection
therewith.
3.10 PICK Communications Non-Competition. PICK Communications agrees
that, during the Non-Competition Period (as defined below) neither PICK
Communications nor any subsidiary or affiliate of PICK Communications, other
than PICKSAT, will, directly or indirectly, engage in any line of business or
provide to customers or clients any product line currently engaged in and
provided to customers or clients by PICKSAT and/or contemplated in the PICKSAT
Business Plan to be engaged in and provided to customers and clients by PICKSAT,
or unless previously entered into by PICK Communications or any subsidiary other
than PICKSAT and not contemplated in the PICKSAT Business Plan, by which PICKSAT
hereafter during the Non-Competition Period engages in or provides to customers
or clients from any location in the world to any location in the world. The
above-described current business, contemplated business
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or hereafter developed business of PICKSAT are hereinafter collectively referred
to as "PICKSAT's Business" and shall specifically exclude that of its
wholly-owned subsidiary, Xxxxxxxxxx.xxx, Inc., which may engage in the business
of aggregating or consolidating content for distribution via satellite or
Internet to users or resellers of such content, provided that all satellite or
Internet distribution of such content is accomplished though the facilities of
PICKSAT, if available. The "Non-Competition Period" shall mean the period
commencing on the date of this Agreement and ending on the earliest of the
following dates:
(i) the expiration of the Purchase Option if, and only
if, at that time ATN owns less than 10% of the
outstanding capital stock of PICKSAT;
(ii) such date after the expiration of the Purchase Option
as ATN shall own less than 10% of outstanding capital
stock of PICKSAT;
(iii) three years after the date on which PICK
Communications shall cease to own sufficient common
stock of PICKSAT to elect at least one director to
the board of directors of PICKSAT.
PICK Communications understands and acknowledges that a breach of this
section by it will result in irreparable harm to ATN and PICKSAT and that
remedies at law, alone, will be inadequate to remedy any breach of this section
and, therefore, PICK Communications (a) consents to the issuance of injunctive
or other relief against it to prevent or end any violation of this section in
such event and (b) waives the requirements of the posting of any bonds or other
security by ATN or PICKSAT in connection therewith.
3.11 ATN Non-Competition. ATN agrees that (A) if ATN shall exercise the
Investment Option, neither ATN nor any affiliate of ATN will, directly or
indirectly, engage in PICKSAT's Business, other than through PICKSAT, and (B)
neither ATN nor any affiliate of ATN will directly or indirectly engage in PICK
Xxxxxx.xxx's business as currently contemplated in Section 3.10 above, during
the period commencing on the date of this Agreement and ending on the earliest
of the following dates:
(i) three years from the non-exercise of the Purchase
Option, or
(ii) such date after the expiration of the Purchase
Option, when ATN shall own less than 10% of the
outstanding capital stock of PICKSAT.
ATN understands and acknowledges that a breach of this section by it will result
in irreparable harm to PICK Communications and PICKSAT and that remedies at law,
alone, will be
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inadequate to remedy any breach of this section and, therefore,
ATN (a) consents to the issuance of injunctive or other relief against it to
prevent or end any violation of this section in such event and (b) waives the
requirements of the posting of any bonds or other security by PICK
Communications or PICK Communications or PICKSAT in connection therewith.
3.12 Xxxxx Xxxxx Non-Competition. Xxxxx Xxxxx, by his signature as an
individual at the end of this Agreement, agrees that (except as an officer,
director, employee, consultant or stockholder of PICKSAT) he will not be engaged
or employed, directly or indirectly, as a director, officer, employee,
consultant, proprietor, stockholder, partner or otherwise in PICKSAT's Business
during the period commencing on the date of this Agreement and ending on the
earliest of the following dates:
(i) one year after the first date on which Xx. Xxxxx
shall no longer be employed by PICK Communications or
any of its subsidiaries or PICKSAT and shall have
ceased to draw any compensation from PICK
Communications or any of its subsidiaries or PICKSAT;
and
(ii) the expiration of the Non-Competition period referred
to in Section 3.10 hereof.
Xx. Xxxxx acknowledges that, as a substantial stockholder of PICK
Communications, he will benefit directly and substantially from the investments
which ATN will make under this Option Agreement if ATN exercises the Investment
Option (whether or not ATN also exercises the Purchase Option), and Xx. Xxxxx
acknowledges and understands that any decision by ATN to exercise the Investment
Option will be made in reliance on the agreement by Xx. Xxxxx contained in this
paragraph.
Xx. Xxxxx understands and acknowledges that a breach of this section by
him will result in irreparable harm to ATN and PICKSAT and that remedies at law,
alone, will be inadequate to remedy any breach of this section and, therefore,
Xx. Xxxxx (a) consents to the issuance of injunctive or other relief against him
to prevent or end any violation of this section in such event and (b) waives the
requirements of the posting of any bonds or other security by ATN or PICKSAT in
connection therewith.
4. Representations and Warranties of PICKSAT and PICK Communications. PICKSAT
and PICK Communications hereby, jointly and severally, represent and warrant to
ATN that:
4.1 Valid Issuance and Title to Shares.
(i) The Investment Shares and the Purchased Shares have
been validly authorized and when issued pursuant to
this Agreement will be duly issued, fully paid and
non-assessable outstanding shares of common stock of
PICKSAT. None of the issued and outstanding shares of
common stock of PICKSAT were issued in violation of
the preemptive rights of any stockholder, and the
issuance of the Investment Shares and Purchased
Shares pursuant to this Option Agreement will not
violate the preemptive rights of any stockholder.
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(ii) If the Purchase Option and this Agreement shall be
changed as is contemplated in Section 2.7 hereof, the
Purchase Shares will have been validly authorized and
issued and will be fully paid and nonassessible
outstanding shares of common stock of PICKSAT. PICK
Communications will own all of such Purchase Shares,
free and clear of Liens (other than the Lien of the
Pledge Agreement contemplated by Section 2.7 hereof
and restrictions on transfer arising under applicable
securities law) and, upon exercise of the Purchase
Option, PICK Communications will deliver to ATN good
title to such shares, free and clear of any and all
Liens (other than restrictions on transfers arising
under applicable securities law).
(iii) There are no options, warrants, rights, convertible
securities or other agreements or commitments
obligating PICK Communications or PICKSAT, to
transfer or sell, or cause the issuance, transfer or
sale of, any shares of capital stock of PICKSAT.
4.2 Due Authorization. PICKSAT and PICK Communications each has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance by PICKSAT and PICK Communications of this Agreement and the
consummation by them of the transactions contemplated hereby, have been duly and
validly authorized and approved by the boards of directors of PICKSAT and PICK
Communications, and no other corporate proceedings on the part of PICKSAT or
PICK Communications are necessary to authorize the execution and delivery by or
on behalf of PICKSAT or PICK Communications of this Agreement or the
consummation of the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by PICKSAT and PICK Communications, and
constitutes the legal, valid and binding agreement of PICKSAT and PICK
Communications, enforceable against PICKSAT and PICK Communications, in
accordance with its terms, except as such obligations and their enforceability
may be limited by applicable bankruptcy and other similar Laws (as defined
herein) affecting the enforcement of creditors' rights generally and except that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought (whether at law or in
equity).
4.3 No Conflicts; Consents and Approvals. Except as set forth in
Schedule 4.3 attached hereto (the "Required Consents"), neither the execution,
delivery and performance by PICKSAT or PICK Communications of this Agreement,
nor the consummation of the transactions contemplated hereby, (i) violates any
provision of the Certificate of Incorporation or by-laws (or comparable charter
documents) of PICKSAT or PICK Communications; (ii) requires PICKSAT or PICK
Communications to obtain any consent, approval, Permit or action of or waiver
from, or make any filing with, or give any notice to, any Governmental Body or
any other Person; (iii) violates, conflicts with or results in a breach or
default under (after the giving of notice or the passage of time or both), or
permits the termination of, any Contract, right, other obligation or restriction
relating to or which affects the Investment Shares, the Purchased Shares or
PICKSAT or PICK Communications to which PICKSAT or PICK Communications is a
party or by which either of them or the Assets or the Business may be bound or
subject, or results in the creation of any Lien upon the Investment Shares or
the Purchased Shares or upon any of the Assets pursuant to the terms of any such
Contract; (iv) violates or conflicts with any Law or Order of any Governmental
Body against, or binding upon, PICKSAT or PICK Communications or upon the Assets
or the Business or the Purchased Shares; or (v) violates or results in the
revocation or suspension of any Permit.
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4.4 Corporate Existence and Power; Capitalization.
(i) PICKSAT is a corporation duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all
requisite power and all material Permits required to
own, lease and operate its respective properties and
to conduct the Business as proposed in the PICKSAT
Business Plan to be conducted. Except in any such
jurisdiction where failure to so qualify would not
have a Material Adverse Effect, PICKSAT is duly
qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where the
character of the property owned or leased by it or
the nature of its activities or proposed activities
makes such qualification necessary.
(ii) The entire authorized capital stock of PICKSAT
consists of 5,000 shares of common stock, no par
value per share, of which 1,500 shares are issued and
outstanding. All of such 1,500 shares are owned by
PICK Communications.
(iii) There are no options, warrants, rights, convertible
securities or other agreements or commitments
obligating PICK Communications or PICKSAT to issue,
transfer or sell, or cause the issuance, transfer or
sale of, any shares of capital stock of PICKSAT or to
make any payments in respect of the value of any
shares of PICKSAT.
4.5 Charter Documents and Corporate Records. PICK Communications has
heretofore delivered to ATN true and complete copies of the Certificate of
Incorporation and by-laws (or comparable charter documents) of PICK
Communications and PICKSAT as in effect on the date hereof. The stock and
transfer books (or comparable documents) of PICKSAT shall be made available to
ATN for its inspection within 30 days from the date of this Agreement and shall
be true and complete.
4.6 Financial Information. PICK Communications has furnished, to ATN a
true and complete copy of the balance sheet of PICKSAT as of July 31, 1999 (the
"Balance Sheet"). The Balance Sheet presents fairly in accordance with GAAP the
financial position of PICKSAT as of July 31, 1999, except that there are no
footnotes to said Balance Sheet. All material information required by GAAP to be
disclosed in footnotes to a balance sheet of PICKSAT as of July 31, 1999 can be
ascertained from one or more of the Schedules to this Option Agreement.
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4.7 Liabilities. Except as described in Schedule 4.7 attached hereto
and as and to the extent reflected in the Balance Sheet, PICKSAT did not have,
as of July 31, 1999, any Liabilities (other than obligations of continued
performance under Contracts and other commitments and arrangements entered into
in the ordinary course of the Business); and except as described in Schedule 4.7
attached hereto, PICKSAT has not incurred any Liabilities since the July 31,
1999, except (i) current Liabilities for trade or business obligations incurred
in the ordinary course of the Business and consistent with past practice, (ii)
Liabilities in respect of this Agreement, and (iii) Liabilities that are
otherwise disclosed pursuant to any other representation herein.
4.8 Employment Agreements. PICKSAT has entered into Employment
Agreements with the persons specified in Schedule 4.8 hereto in the forms
attached to such Schedule.
4.9 Absence of Certain Changes. Since July 31, 1999, except as set
forth in this Agreement or disclosed in Schedule 4.9 attached hereto, PICKSAT
has conducted the Business in the ordinary course consistent with the PICKSAT
Business Plan and there has not been:
(i) Except for material changes in general economic or
industry conditions, any change in the Assets,
financial condition or results of operations or
prospects of PICKSAT (collectively, the "Condition of
the Business") which would have a Material Adverse
Effect, or, to the knowledge of PICK Communications,
any event, occurrence or circumstance that would have
a Material Adverse Effect;
(ii) Any transaction or Contract involving a total
commitment by or to PICKSAT of at least $50,000 or,
together with all other such transactions or
contracts, $250,000 in the aggregate with respect to
the purchase, acquisition, lease, disposition or
transfer of any Assets or any capital expenditure (in
each case, other than in the ordinary course of the
Business) or creation of any Lien on any Asset;
(iii) Any declaration, setting aside or payment of any
dividend or other distribution with respect to any
interest in PICKSAT;
(iv) Any damage, destruction or other casualty loss
(whether or not covered by insurance), condemnation
or other taking of the Assets of PICKSAT with a book
value exceeding, in the aggregate, $50,000;
(v) Any change in any method of accounting or accounting
practice by PICKSAT;
(vi) Other than in the ordinary course of the Business
with respect to employees of PICKSAT whose annual
compensation is not more than $100,000, any increase
in the compensation payable or to become payable to
any officer, sales representative or employee of
PICKSAT, or any material alteration in the benefits
payable to any thereof;
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(vii) Except for any changes made in the ordinary course of
the Business, any change in any of PICK
Communication's or PICKSAT's business policies which
would have a Material Adverse Effect;
(viii) Any material modification, termination, amendment or
other alteration or change in the terms or provisions
of any Contract.
4.10 Properties; Title.
(i) PICKSAT does not own any real property. Schedule 4.10
attached hereto is a correct and complete list of all
material leases under which PICKSAT is a lessee (the
"Leased Property"), true and complete copies of which
have been delivered to ATN.
(ii) To the knowledge of PICK Communications, all
structures and buildings of the Business are in good
operating condition (subject to normal wear and
tear).
(iii) Except as disclosed in Schedule 4.10 attached hereto,
PICKSAT has good, valid, marketable, legal and
beneficial title to (or valid leasehold interest in)
all of the Assets and is the lawful owner of the
Assets, free and clear of all Liens. The machinery,
equipment and other tangible personal property
constituting part of the Assets of the Subsidiaries
(whether owned or leased) have been maintained in a
commercially reasonable manner, are in generally good
condition and repair (subject to normal wear and
tear). There are no outstanding options, warrants,
commitments, agreements or any other rights of any
character, entitling any Person other than ATN to
acquire any interest in all, or any part of, the
Assets. Schedule 4.10 attached hereto contains a list
and description of all (a) equipment, and (b) other
tangible personal property of PICKSAT with a book
value (before depreciation) of $50,000 or more, in
each case, excluding Inventory.
(iv) Except as disclosed in Schedule 4.10, PICKSAT does
not use, and the PICKSAT Business Plan does not
contemplate that PICKSAT will use, any assets,
tangible or intangible, which are owned by PICK
Communications or any subsidiary of PICK
Communications other than PICKSAT. Within 30 days
after the date of this Option Agreement, PICK
Communications will transfer and cause each of its
subsidiaries to transfer to PICKSAT good, valid,
marketable, legal and beneficial title to all such
assets free and clear of all Liens.
4.11 Material Contracts. Schedule 4.11 attached hereto sets forth an
accurate and complete list of all material Contracts relating to the Purchased
Shares, the Business or the Subsidiaries, involving $50,000 or more in any year,
including any such Contracts to which PICK Communications or any of its
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Subsidiaries other than PICKSAT are parties. PICK Communications has heretofore
delivered to ATN true, correct and complete copies of all of the material
Contracts listed in Schedule 4.11. Within 30 days after the date of this Option
Agreement, PICK Communications will, and will cause each of its Subsidiaries to,
assign to PICKSAT, free and clear of all Liens, all of the Right, Title and
Interest of PICK Communications or its Subsidiaries in and to each of the
Contracts listed in Schedule 4.11 to which PICK Communications or one of its
Subsidiaries (other than PICKSAT) is a party.
4.12 Intangible Property and Warranties.
(i) Schedule 4.12 attached hereto sets forth a true,
correct and complete list of all material patents,
registered trademarks, registered copyrights,
registered service marks or registered trade names
(and all applications for any of the foregoing),
Permits, license agreements, grants and licenses
running to or from, or used by, PICKSAT in the
conduct of the Business, and there are no other
material patents, trademarks, material copyrights,
material service marks, material trade names or other
material intangible assets, properties or rights that
are used in the Business (the "Intellectual Property
Rights").
(ii) Except as disclosed in Schedule 4.12 attached hereto:
(a) PICKSAT owns the entire right, title and
interest in and to the Intellectual Property
Rights;
(b) PICK Communications has no knowledge that
the Intellectual Property Rights are either
invalid or unenforceable;
(c) PICK Communications has no knowledge that
the actual or proposed business activities
of PICKSAT have or will has infringed or
conflict with patent or any other
intellectual property rights of any third
party
(d) Neither PICK Communications nor any of its
subsidiaries has ever granted any license or
permission to any third party to use any of
the Intellectual Property Rights; and
(e) this Option Agreement and the transactions
contemplated by this Agreement will not
adversely affect any right of PICKSAT to
enjoy as owner all of the Intellectual
Property Rights.
4.13 Claims and Proceedings. Except as set forth in Schedule 4.13
attached hereto, there are no outstanding Orders of any Governmental Body
against or directly involving by name PICKSAT, any Assets of PICKSAT, or the
Business. Except as set forth in Schedule 4.13 attached hereto, there are no
actions, suits, asserted claims or counterclaims or legal, administrative or
arbitral proceedings or, to PICK Communication's knowledge, investigations
(collectively, "Claims") (whether or not the defense thereof or Liabilities in
respect thereof are covered by insurance), pending or, to the knowledge of PICK
Communications, threatened on the date hereof, against or involving PICKSAT, the
Purchased Shares, PICKSAT Assets or the Business. Schedule 4.13 attached hereto
-17-
also indicates those Claims the defense thereof or Liabilities in respect
thereof are covered by insurance. Except as set forth on Schedule 4.13 attached
hereto, on the date hereof there are no Claims pending or, to the knowledge of
PICK Communications, threatened, other than Claims not in excess of $25,000.
There are no Claims pending or, to the knowledge of PICK Communications,
threatened that would give rise to any right of indemnification on the part of
any director or officer of PICKSAT or the heirs, executors or administrators of
such director or officer, against PICKSAT.
4.14 Taxes.
(i) Except as set forth in Schedule 4.14 attached hereto:
(a) PICK Communications and PICKSAT have timely
filed or, if not yet due, will timely file,
all federal, state or foreign Tax Returns
required to be filed by it for all taxable
periods ending on or before the date of this
Option Agreement and all such Tax Returns
are, or will be when filed, true, correct
and complete in all material respects.
Copies of all such Tax Returns for periods
ending on or after December 31, 1996, have
been given to ATN;
(b) PICKSAT has paid or, if payment is not yet
due, has established, in accordance with
GAAP and consistent with past practice,
accruals that are reflected on the Balance
Sheet for the payment of, all Taxes imposed
PICKSAT or for which PICKSAT is liable,
whether to taxing authorities or to other
Persons (pursuant to a tax sharing agreement
or otherwise);
(c) no extension of time has been requested or
granted for PICK Communications or PICKSAT
to file any Tax Return that has not yet been
filed or to pay any Tax that has not yet
been paid
(d) PICK Communications or PICKSAT has not
received notice of a determination by a Tax
Authority that Taxes are owed by PICK
Communications or PICKSAT (such
determination to be referred to as a "Tax
Deficiency") and, to the knowledge of PICK
Communications, no Tax Deficiency is
proposed or threatened;
(e) no issue has been raised in any examination,
investigation, audit, suit, action, claim or
proceeding relating to Taxes (a "Tax Audit")
which, by application of similar principles
to any past, present or future period, would
result in a Tax Deficiency for such period;
(f) there are no pending or, to the knowledge of
PICK Communications, threatened, Tax Audits
of PICK Communications or PICKSAT;
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(ii) PICKSAT does not have any (a) income reportable for a
period ending after the date of this Option
Agreement, but attributable to a transaction (e.g.,
installment sale) or a change in accounting method
occurring in or made for a period ending on or prior
to the date of this Option Agreement which resulted
in a deferred reporting on income from such
transaction or from such change in accounting method
(other than a deferred intercompany transaction), or
(b) a deferred gain or loss arising out of any
deferred intercompany transaction, which income, gain
or loss has been reflected on the Balance Sheet in
accordance with GAAP, but for which no Tax liability
accrual has been reflected on the Balance Sheet.
(iii) Schedule 4.14 attached hereto contains (a) a schedule
of the filing dates of all Tax Returns required to be
filed by PICK Communications or PICKSAT, (b) a
description of all past Tax Audits involving PICK
Communications or PICKSAT, (iii) a list of the
states, territories and jurisdictions (whether
foreign or domestic) to which any Tax is properly
payable by PICK Communications or PICKSAT. Except as
set forth in Schedule 4.14 attached hereto, PICK
Communications has retained all supporting and backup
papers, receipts, spreadsheets and other information
necessary for (i) the preparation of all Tax Returns
that have not yet been filed, and (ii) the defense of
all Tax Audits involving taxable periods either
ending on or during the four (4) years prior to the
Closing Date or from which there are unutilized net
operating loss, capital loss or investment tax credit
carryovers.
(iv) Except for sales, use and similar Taxes which do not
exceed $100,000 in the aggregate, PICK Communications
or PICKSAT has collected and remitted to the
appropriate Tax Authority all sales and use or
similar Taxes required to have been collected,
including any interest and any penalty, addition to
tax or additional amount unpaid, and has been
furnished properly completed exemption certificates
for all exempt transactions. To the knowledge of PICK
Communications, PICK Communications or PICKSAT has
collected and/or remitted to the appropriate Tax
Authority all withholding, payroll, employment,
property, customs duty, fee, assessment or charge of
any kind whatsoever (including Taxes assessed to real
property and water and sewer rents relating thereto),
including any interest and any penalty, addition to
tax or additional amount unpaid.
4.15 Employee Benefit Plans.
(i) Set forth in Schedule 4.15 attached hereto is a list
of each employee benefit plan (within the meaning of
Section 3(3) of ERISA), current, accurate and
complete copies of each to be delivered to ATN within
30 days after the date of the Option Agreement,
written or oral employment or consulting agreement,
severance pay plan or agreement, employee relations
policy (or practice, agreement or arrangement),
-19-
agreements with respect to leased or temporary
employees, vacation plan or arrangement, sick pay
plan, stock purchase plan, stock option plan, fringe
benefit plan, incentive plan, bonus plan, cafeteria
or flexible spending account plan and any deferred
compensation agreement (or plan, program, or
arrangement) covering any present or former employee
of PICKSAT and which is, or at any time during the
last two (2) years was, sponsored or maintained by
(or to which contributions are required to be, were
during the last two (2) years or were required to
have been during the last two (2) years) PICK
Communications or PICKSAT. Each and every such plan,
program, policy, practice, arrangement and agreement
included on the list set forth in Schedule 4.15
attached hereto is hereinafter referred to as an
"Employee Benefit Plan".
(ii) With respect to any employee benefit plan (within the
meaning of Section 3(3) of ERISA), stock purchase
plan, stock option plan, fringe benefit plan, bonus
plan or any deferred compensation agreement, plan or
program (whether or not any such plan, program or
agreement is currently in effect): there are no
actions, suits or claims (other than routine claims
for benefits in the ordinary course) pending or, to
the knowledge of PICK Communications, threatened, and
PICK Communications has no knowledge of any facts
which could reasonably give rise to any such actions,
suits or claims (other than routine claims for
benefits in the ordinary course), which could subject
PICKSAT to any liability.
(iii) Except as set forth in Schedule 4.15 attached hereto,
neither PICK Communications nor PICKSAT is subject to
any legal, contractual, equitable or other obligation
to (1) establish as of any date any employee benefit
plan of any nature, including any pension, profit
sharing, welfare, post-retirement welfare, stock
option, stock or cash award, non-qualified deferred
compensation or executive compensation plan, policy
or practice, or (2) continue any employee benefit
plan of any nature, including any Employee Benefit
Plan or any other pension, profit sharing, welfare or
post-retirement welfare plan, or any stock option,
stock or cash award, non-qualified deferred
compensation or executive compensation plan, policy
or practice (or to continue their participation in
any such benefit plan, policy or practice) on or
after the date hereof.
(iv) PICK Communications or PICKSAT may, in any manner,
subject to the limitations imposed by applicable law,
and without the consent of any employee, beneficiary
or other Person, prospectively terminate, modify or
amend any such Employee Benefit Plan or any other
plan, program or practice (or its participation in
such Employee Benefit Plan or any other plan, program
or practice) effective as of any date on or after the
date hereof; and
(v) Except as set forth in Schedule 4.15 attached hereto,
to the knowledge of PICK Communications, no
representations or communications (directly or
indirectly, orally, in writing or otherwise) with
respect to participation, eligibility for benefits,
vesting, benefit accrual coverage or other material
terms of any Employee Benefit Plan have been made to
any employee, beneficiary or other Person other than
those which are in accordance with the terms and
provisions of each such Plan as in effect immediately
prior to the date hereof and the Closing Date.
-20-
4.16 Employee-Related Matters.
(i) Schedule 4.16 attached hereto contains a true and
correct list of each officer and employee of PICKSAT
whose aggregate compensation exceeds $100,000 per
annum, including any agreement, whether oral or
written, relating thereto, and a general description
of the rate and nature of all compensation and
benefits payable by PICKSAT to each such Person.
Schedule 4.16 attached hereto also contains a general
description of all existing severance, accrued
vacation obligations or retiree benefits of any
current or former director, officer or employee (to
the extent not included in Schedule 4.16 attached
hereto) including, but not limited to, stay-in-place
bonuses to those employees listed on Schedule 4.16
whom Buyer has agreed to continue to employ. Except
as set forth in such Schedule 4.16 attached hereto,
the employment or contractual arrangement of all such
Persons is terminable at will without additional or
further economic obligation on the part PICKSAT.
(ii) Except as set forth in Schedule 4.16 attached hereto,
(a) PICKSAT is not a party to any Contract with any
labor organization or other representative of its
employees; (b) there is no unfair labor practice
charge or complaint pending or, to the knowledge of
PICK Communications, threatened against PICKSAT, nor
has any been pending or threatened within the past
three (3) years; (c) PICKSAT has not experienced any
labor strike, picketing, hand billing, slowdown, work
stoppage or similar labor controversy within the past
three (3) years; (d) no representation question is
pending or has been raised respecting any of the
employees of PICKSAT working within the past three
(3) years, nor, to the knowledge of PICK
Communications, are there any campaigns being
conducted to solicit authorization from the employees
of PICKSAT to be represented by any labor
organization; (e) no Claim before any Governmental
Body brought by or on behalf of or relating to any
employee, prospective employee, former employee,
retiree, labor organization or other representative
of the employees of PICKSAT or relating to its
employment practices, is pending or, to the knowledge
of PICK Communications, threatened against PICKSAT;
(f) PICKSAT is not a party to, or otherwise bound by,
any Order relating to its employees or employment
practices; and (g) PICKSAT has paid in full to all of
its employees all wages, salaries, commissions,
bonuses, benefits and other compensation due and
payable to such employees consistent with past
practices (except for disputed amounts).
-21-
4.17 Insurance. Schedule 4.17 attached hereto sets forth a list of all
insurance policies, fidelity and surety bonds and fiduciary liability policies
(the "Insurance Policies") PICKSAT's the Assets, the Business, operations,
employees, officers and directors of PICKSAT and true and complete copies of all
such Insurance Policies have been delivered to ATN. Schedule 4.17 attached
hereto also sets forth a true and complete list of Claims made in respect of
Insurance Policies during the two (2) years prior to the date hereof (other than
under health or other employee benefit policies). All Insurance Policies are in
full force and effect and will remain in effect up to the Closing and thereupon
terminate. To the knowledge of PICK Communications, there is not any threatened
termination of, premium increase with respect to, or uncompleted requirements
under, any material Insurance Policy.
4.18 Compliance with Laws. To the knowledge of PICK Communications,
neither PICK Communications nor PICKSAT is in violation of any order, judgment,
injunction, award, citation, decree, consent decree or writ (collectively,
"Orders"), or any law, statute, code, ordinance, rule, regulation or other
requirement (collectively, "Laws"), of any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision, or any court or
arbitrator (collectively, "Governmental Bodies") affecting PICKSAT, its Assets
or the Business, except where any such violation would not have a Material
Adverse Effect.
4.19 Permits and Licenses. PICKSAT has obtained all licenses, permits
(including environmental permits), certificates, certificates of occupancy,
orders, authorizations and approvals (collectively, "Permits"), and has made all
required registrations and filings with, any Governmental Body that are required
for the conduct of the Business. All Permits that are required for the conduct
of the Business (the "Required Permits") are listed in Schedule 4.19 attached
hereto and are in full force and effect; no violations are or have been recorded
in respect of any Permit; and no proceeding is pending or threatened to revoke
or limit any Required Permit. Except as listed in Schedule 4.19 attached hereto,
no Permit will terminate by reason of this Option Agreement or the transaction
contemplated hereby. To the knowledge of PICK Communications, this Option
Agreement or the transactions contemplated hereby will not invalidate, revoke or
otherwise adversely affect the validity of any such Permit.
4.20 Environmental Matters. Except as set forth in Schedule 4.20
attached hereto:
(i) to the best knowledge of PICK Communications, PICKSAT
is in material compliance with all Environmental
Laws;
(ii) to the best knowledge of PICK Communications, there
have been no Releases of Hazardous Substances by
PICKSAT or violations of Environmental Laws by
PICKSAT;
(iii) neither PICK Communications nor PICKSAT has received
oral or written notice of a violation or of a claim
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of potential or actual liability by any Governmental
Body or third-party against PICKSAT under
Environmental Laws, nor are any such potential claims
known to PICK Communications or PICKSAT;
4.21 Finders' Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of PICK Communications or PICKSAT who might be entitled to any fee or commission
from, ATN, PICK Communications or PICKSAT with respect to this Option Agreement
or the transactions contemplated hereby.
4.22 Depositories; Powers of Attorney, Etc. Schedule 4.22 attached
hereto sets forth (i)the name of each bank or similar entity in which PICKSAT
has an account, lock box or safe deposit box and the names of all Persons
authorized to draw thereon or to have access thereto, and (ii) the name of each
Person holding a general or special power of attorney for PICKSAT and a
description of the terms thereof.
4.23 Disclosure; Schedules. Neither this Option Agreement nor the
Schedules, nor any audited or unaudited financial statements, documents or
certificates furnished or to be furnished to ATN or any of its Agents or
Affiliates by or on behalf of PICK Communications or PICKSAT pursuant to this
Opinion Agreement or in connection with the transactions contemplated hereby
contain or will contain any untrue statement of a material fact or omit or will
omit a material fact necessary in order to make the statements contained herein
or therein not misleading. All representations and warranties made by PICK
Communications will be deemed to have been relied on by ATN (notwithstanding any
investigation by ATN).
5 Indemnification.
5.1 Survival of Representations, Warranties and Covenants.
Notwithstanding any right of ATN fully to investigate the affairs of PICK
Communications and PICKSAT and any knowledge of facts determined or determinable
by ATN pursuant to such investigation or right of investigation, ATN has the
right to rely fully upon the representations, warranties, covenants and
agreements of PICK Communications and PICKSAT contained in this Agreement, or on
any Schedule attached hereto or in any financial statement, report or
certificate delivered to ATN pursuant to this Agreement. All representations,
warranties, covenants and agreements shall survive the execution and delivery of
this Agreement and the exercise or expiration of the Investment Option and the
Purchase Option. All representations and warranties of PICK Communications and
PICKSAT in this Option Agreement, except those contained in Sections 4.1 (Valid
Issuance and Title to Shares), Section 4.10(iii) (Properties; Title), Section
4.14 (Taxes), and Section 4.20 (Environmental Matters), shall terminate 18
months from the Schedule Date except for any claims theretofore asserted with
respect to such representations and warranties. The representations and
warranties contained in Sections 4.1, Section 4.10(iii), Section 4.14, and
Section 4.20 shall survive until the expiration of the applicable statutes of
limitations.
5.2 Obligation of PICK Communications to Indemnify. Subject to the
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limitations set forth in Section 5.4, PICK Communications hereby agrees to
indemnify, defend and hold harmless PICKSAT and ATN (and their directors,
officers, employees, Affiliates, successors, assigns and Agents) from and
against all Claims, losses, liabilities, damages, deficiencies, judgments,
settlements, costs of investigation or other expenses (including interest,
penalties and reasonable attorneys' fees and disbursements and expenses incurred
in enforcing this indemnification or in any litigation between the parties or
with third parties) (collectively, the "Losses") suffered or incurred by PICKSAT
or ATN or any of the foregoing Persons arising out of (a) any breach of the
representations, warranties, covenants and agreements of PICK Communications
contained in this Agreement, the Schedules attached hereto or any financial
statement, report or certificate heretofore or hereafter delivered to ATN
pursuant to this Agreement, or (b) any Claim, including any Claim arising out of
or relating to Environmental Laws, whether made before or after the date of this
Agreement, or any litigation, proceeding or governmental investigation,
including any Claim arising out of or relating to Environmental Laws, whether
commenced before or after the date of this Agreement, arising out of the
Business, or otherwise relating to PICK Communications or PICKSAT, prior to the
Closing, or otherwise arising out of any act or occurrence prior to, or any
state or facts existing as of, the Closing.
5.3 Notice and Opportunity to Defend Third Party Claims.
(i) Promptly after receipt by any party hereto (the
"Indemnitee") of notice of any demand, claim,
circumstance or Tax Audit which would or might give
rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or
investigation (an "Asserted Liability") that may
result in a Loss, the Indemnitee shall give prompt
notice thereof (the "Claims Notice") to the party or
parties obligated to provide indemnification pursuant
to Section 5.2 (the "Indemnifying Party"). The Claims
Notice shall describe the Asserted Liability in
reasonable detail and shall indicate the amount
(estimated, if necessary, and to the extent feasible)
of the Loss that has been or may be suffered by the
Indemnitee.
(ii) The Indemnifying Party may elect to defend, at its
own expense and with its own counsel satisfactory to
Indemnitee, any Asserted Liability, unless (i) the
Asserted Liability seeks an Order, injunction or
other equitable or declaratory relief against the
Indemnitee, or (ii) the Indemnitee shall have
reasonably concluded that (x) there is a conflict of
interest between the Indemnitee and the Indemnifying
Party in the conduct of such defense, or (y) the
Indemnitee shall have one or more defenses not
available to the Indemnifying Party; provided,
however, that the Indemnifying Party shall not be
permitted to make such election if the Indemnifying
Party fails to provide Indemnitee with evidence
reasonably acceptable to Indemnitee that the
Indemnifying Party will have the financial resources
to defend against the Asserted Liability and fulfill
its indemnification obligations hereunder. If the
Indemnifying Party elects to defend such Asserted
Liability, it shall within thirty (30) calendar days
(or sooner, if the nature of the Asserted Liability
so requires) notify the Indemnitee of its intent to
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do so, and the Indemnitee shall cooperate, at the
expense of the Indemnifying Party, in the defense of
such Asserted Liability. If the Indemnifying Party
assumes the defense against any Asserted Liability it
will be conclusively established for purposes of this
Agreement that such Asserted Liability is within the
scope of, and subject to, indemnification. If the
Indemnifying Party elects not to defend the Asserted
Liability, is not permitted to defend the Asserted
Liability by reason of the first sentence of this
Section 5.3(ii), fails to notify the Indemnitee of
its election as herein provided or contests its
obligation to indemnify under this Agreement with
respect to such Asserted Liability, the Indemnitee
may pay, compromise or defend such Asserted Liability
at the sole cost and expense of the Indemnifying
Party. Notwithstanding the foregoing, neither the
Indemnifying Party nor the Indemnitee may settle or
compromise any claim over the reasonable written
objection of the other, provided, however, that the
Indemnitee may settle or compromise any
claim as to which the Indemnifying Party has
failed to notify the Indemnitee of its election as
herein provided or is contesting its indemnification
obligations hereunder. In any event, the Indemnitee
and the Indemnifying Party may participate, at their
own expense, in the defense of such Asserted
Liability. If the Indemnifying Party chooses to
defend any Asserted Liability, the Indemnitee shall
make available to the Indemnifying Party any books,
records or other documents within its control that
are necessary or appropriate for such defense. Any
expenses of any Indemnitee for which indemnification
is available hereunder shall be paid upon written
demand therefor.
5.4 Limitation on Indemnification; Payment of Indemnification
Amounts.
(i) PICK Communications' liability for indemnifiable
damages pursuant to this Section 5 shall accrue but
shall not be payable until the aggregate amount of
Losses suffered or incurred by PICKSAT and ATN (and
their directors, officers, employees, Affiliates,
successors, assigns and other Agents) exceeds in the
aggregate $100,000 (the "Basket Amount"), and then
PICK Communications shall be responsible for the
payment only of amounts in excess of such Basket
Amount as may be payable by PICK Communications
pursuant to this Section 5; provided, however, that
all Losses arising as a result of an inaccuracy or
breach of the representations and warranties
contained in Sections 4.1 (Valid Issuance and Title
to Shares) and 4.14 (Taxes) shall become immediately
due and payable without giving effect to the Basket
Amount.
(ii) ATN will not be entitled to indemnification:
(a) with respect to punitive damages, except
where such damages are incurred by or
awarded to a third party making a claim
against such an indemnitee;
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(b) with respect to any claim by or liability to
any employee employed by PICKSAT arising as
the result of the termination of such
employee's employment with PICKSAT
subsequent to the exercise of the Purchase
Option or any action by ATN subsequent to
the exercise of the Purchase Option (except
with respect to any misrepresentation or
breach of a warranty or covenant by PICK
Communications);
(c) to the extent of any reserves, accruals or
amounts recorded as of the Closing Date with
respect to any obligation, liability or
matter for which reserves or accruals are
reflected in the Balance Sheet; an
(d) with respect to any obligation, liability or
matter, including environmental remediation
and clean-up, arising under Laws that arise
or are promulgated or announced after the
exercise of the Purchase Option.
(e) Any amounts payable under this Section 5
shall be calculated after giving effect to
any net proceeds actually received from
insurance policies covering the damage,
loss, liability or expense that is the
subject to the claim for indemnity.
5.5 Other Remedies. The provisions of this Section 5 shall not restrict
or otherwise limit the legal remedies that a party to this Agreement may seek
under applicable law or otherwise for any breaches of the representations,
warranties, covenants or agreements contained herein.
5.6 Rights of Contribution. Although PICKSAT has made certain
representations, warranties and covenants to ATN in this Agreement jointly and
severally with PICK Communications, it is expressly understood and agreed that
PICK Communications shall have no rights against PICKSAT for contribution,
reimbursement or otherwise with respect to such representations, warranties and
covenants or with respect to any claims which ATN may make against PICK
Communications with respect to such representations, warranties and covenants.
6. Registration Rights.
6.1
(i) If at the time ATN shall exercise the Purchase Option
ATN shall be eligible to register its common stock
under the Securities Act of 1933, as amended (the
"Securities Act") on Form S-3 for a primary offering,
ATN shall use its best efforts, subject to Section
2.1(c) of Schedule 6.3 attached hereto, to deliver to
PICKSAT upon exercise of the Purchase Option shares
of ATN common stock which are registered for original
issuance to PICKSAT under an effective shelf
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registration statement. The resale of the ATN Common
Stock by PICKSAT shall comply with the Securities Act
and all rules and regulations promulgated thereunder
and if a resale prospectus is required to be
delivered by PICKSAT, then, subject to delays for
Valid Business Reasons (as defined in Schedule 6.3
attached hereto, one shall be furnished to PICKSAT
with the delivery of the ATN Common Stock and shall
be kept current for the longer of one-year thereafter
or the termination of any required lock-up agreement.
If ATN shall be unable to deliver registered shares
of ATN common stock, ATN shall as soon as is
practicable thereafter, file a registration statement
with the Securities and Exchange Commission covering
all of the ATN common stock included in the purchase
price paid to PICKSAT at upon exercise of the
Purchase Option. The provisions of Schedule 6.3
attached hereto applicable to Demand Registration
shall be applicable to such registration.
(ii) If at the time ATN shall exercise the Purchase Option
ATN is not eligible to register its common stock
under the Securities Act on Form S-3 for a primary
offering, ATN shall, on or prior to the date of
exercise of the Purchase Option or as soon as is
practicable thereafter, file a registration statement
with the Securities and Exchange Commission on Form
S-1 on such other appropriate form, covering all of
the ATN common stock included in the purchase price
paid to PICKSAT upon exercise of the Purchase Option.
The provisions of Schedule 6.3 attached hereto
applicable to Demand Registration shall be applicable
to such registration.
(iii) If ATN shall exercise the Purchase Option, PICKSAT
shall have the right at any time after exercise of
the Purchase Option to an unlimited number of
Piggyback Registrations with respect to any shares of
ATN common stock delivered to PICKSAT upon exercise
of the Purchase Option and one Demand Registration.
(iv) In connection with any sales by PICKSAT of ATN common
stock, PICKSAT shall abide by the restrictions on
such sales contained in Schedule 6.3(iv) attached
hereto.
6.2 ATN, shall have the right, at any time after the exercise or
expiration of the Purchase Option, to one Demand Registration and an unlimited
number of Piggyback Registrations with respect to any shares of PICKSAT common
stock acquired by ATN pursuant to this Option Agreement.
6.3 The terms and conditions of Schedule 6.3 attached hereto shall
govern, define and limit the rights of PICK Sat's and ATN's Registration Rights
under Section 6.1 and 6.2 of this Option Agreement.
7. Confidentiality by ATN.
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(i) From the date hereof until the exercise or expiration
of the Purchase Option and, if such Option expires
unexercised, for a period of five years thereafter,
ATN shall hold in strict confidence, and shall use
its best efforts to cause all of its Agents to hold
in strict confidence, unless compelled to disclose by
judicial or administrative process, or by other
requirements of law, all Confidential Information
concerning PICKSAT which ATN may now or hereafter
have and ATN shall not use or disclose to others, or
permit the use or disclosure of, any such
Confidential Information and will not release or
disclose such information to any other person.
(ii) If the Purchase Option expires unexercised and if
requested by PICKSAT, ATN shall deliver to PICKSAT
all tangible evidence of such Confidential
Information which may be in the possession of ATN or
its Agents or provide, at ATN's option, a certificate
to PICKSAT stating that such information has been
destroyed.
(iii) The term Confidential Information shall mean any and
all information about PICKSAT or the Business
provided to ATN by PICK Communications or PICKSAT,
including, but not limited to, all such information
disclosed in the schedules to this Option Agreement,
except to the extent such information has been
(a) disclosed in public filings of any of the
parties hereto under the securities laws
(b) heretofore or hereafter made known to ATN
from a third party, to the knowledge of ATN
not in breach of any confidentiality
requirement;
(c) made public through no fault of ATN or any
of its Agents;
(d) in the case of information provided to ATN
by PICK Communications or PICKSAT prior to
the exercise or expiration of the Purchase
Option, known to ATN prior to the date such
information was so provided.
(iv) In the event that ATN or any of its Agents are
requested in any legal or governmental proceeding to
disclose any of the Confidential Information, ATN or
such Agents, as the case may be, shall give PICK
Communications prompt written notice of such request
so that PICK Communications may seek an appropriate
order or decree restricting such disclosure. If in
the absence of such an order or decree, ATN or its
Agents are none the less compelled to disclose any
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Confidential Information, ATN or such Agent, as the
case may be, may disclose such information in such
proceeding without liability hereunder, provided that
ATN or such Agent gives PICK Communications written
notice of the Confidential Information to be
disclosed as far in advance of its disclosure as is
practicable and, upon PICK Communications' request
and at PICK Communications' expense, ATN or such
Agent shall use its reasonable commercial efforts to
assist PICK Communications to obtain assurances that
confidential treatment will be accorded to such
information.
(v) Each Agent of ATN shall be advised of this Agreement
by ATN and shall agree in writing to be bound by the
terms of this Agreement and not to disclose such
information to any other individual or entity other
than to another Agent or to ATN or as permitted by
subsection (i) of this Section.
(vi) ATN understands and acknowledges the economic and
competitive value and the confidential nature of the
Confidential Information and further agrees that the
breach of this Section by it or its Agents will
result in irreparable harm to PICK Communications and
PICKSAT and that remedies at law, alone, will be
inadequate to remedy any breach of this Section and,
therefore, ATN (a) consents to the issuance of
injunctive or other equitable relief against it and
its Agents to prevent or end any violation of this
Section in such event and (b) waives the requirements
of the posting of any bond or other security by PICK
Communications or PICKSAT in connection therewith.
8. Expenses. Each of the parties hereto shall bear its own expenses incurred in
connection with the preparation, execution and performance of this Option
Agreement.
9. Further Assurances. PICKSAT and PICK Communications hereby agree, without
further consideration, to execute and deliver, or to cause to be executed and
delivered on its behalf, following the exercise of the Investment Option or the
Purchase Option such other instruments of transfer and take such other action as
ATN may reasonably request in order to put ATN in possession of, and to vest ATN
with good, valid and encumbered title to the Investment Shares or the Purchase
Share, as the case may be, in accordance with this Agreement.
10. Notices.
Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered personally by hand or by recognized
overnight carrier, telecopy or mailed (by registered or certified mail, postage
prepaid) as follows:
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If to PICK Communications:
PICK Communications Corp.
000 Xxxxx 00 Xxxx
Xxxxx Xxxxxxxxxxx Xxxxx XX
Xxxxx, Xxx Xxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxx
If to PICK Sat:
PICK Sat, Inc.
0000 X.X. 00xx Xxxxxxx,
Xxxxx 000
Xxxxx, XX 00000
Telecopier: (000) 000-0000
with a simultaneous copy to:
Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
If to ATN one copy to:
Atlantic Telenetwork, Inc.
Attention: Xxxxxxxxx X. Prior, Jr., Chairman
XX Xxx 00000
Xxxxxxxxx Amalie
St. Xxxxxx, U.S. Virgin Islands 00801
(if sent by mail)
or
19 Estate Xxxxxx
Havensite
Charlotte Amalie
St. Xxxxxx, U.S. Virgin Islands
(if sent by overnight carrier)
Telecopier: (000) 000-0000
with a simultaneous copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxx P.C.
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Each such notice or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this section (with confirmation of transmission), or to (ii) if
given by any other means, when received at the address specified in this
section. Any party by notice given in accordance with this section to the other
party may designate another address (or telecopier number) or Person for receipt
of notices hereunder. Notices by a party may be given by counsel to such party.
11. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supercedes all prior
agreements, written or oral, with respect thereto. This Agreement may be
amended, superceded, canceled, renewed or extended only by a written instrument
signed by the parties hereto. Provisions of this Agreement may be waived only by
a writing signed by the party making such waiver. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any such right,
power or privilege, nor any single or partial exercise of any such right, power
or privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
12. Governing Law. This Agreement shall be governed in construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely within such state, without regard to the conflict of laws,
rules thereof.
13. Binding Effect. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
14. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any party whose
signature appears thereon, and all of which shall together constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the signatures
of all of the parties reflected hereon as the signatories.
15. Schedules. This Agreement is being executed without many of the Schedules
attached. The parties shall use their best efforts to prepare and agree to all
of the Schedules contemplated by thus Agreement on or before September 30`,
1999.
16. Definitions. The following terms, as used herein, have the following
meanings:
"Affiliate" of any Person means any other Person directly or indirectly
through one or more intermediary Persons, controlling, controlled by or under
common control with such Person.
"Agreement" or "this Agreement" means, and the words "herein", "hereof"
and "hereunder" and words of similar import refer to, this agreement as it from
time to time may be amended.
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"Assets" means properties, rights, interests and assets of every kind,
real, personal or mixed, tangible and intangible, used or usable in the
Business.
The term "audit" or "audited" when used in regard to financial
statements means an examination of the financial statements by a firm of
independent certified public accountants in accordance with generally accepted
auditing standards for the purpose of expressing an opinion thereon.
"Business" means the business of PICKSAT as presently conducted and as
contemplated by the PICKSAT Business Plan dated September 8, 1999.
"Certificate of Incorporation" means, in the case of any corporation,
the certificate of incorporation, articles of incorporation or charter of a
corporation, howsoever denominated under the laws of the jurisdiction of its
incorporation.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any contract, agreement, indenture, note, bond, lease,
conditional sale contract, mortgage, license, franchise, instrument, commitment
or other binding arrangement, whether written or oral.
The term "control", with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Environmental Laws" means any and all Laws (including common law),
Orders, Permits, agreements or any other requirement or restriction promulgated,
imposed, enacted or issued by any federal, state, local and/or foreign
Governmental Bodies relating to human health or the environment, including the
emission, discharge or Release of pollutants, contaminants, Hazardous Substances
or wastes into the environment (which includes ambient air, surface water,
ground water, or land), and the remediation thereof, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof, including the Clean Air
Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Emergency Planning and Community Right To Know Act, the Federal Water
Pollution Control Act, the Oil Pollution Act of 1990, the Pollution Prevention
Act of 1990, the Resource Conservation and Recovery Act, the Safe Drinking Water
Act, the Endangered Species Act, the Toxic Substances Control Act, each as
amended, any state or local counterparts thereof and any state or local laws of
a similar nature for the protection of human health and welfare.
"Environmental Permits" with respect to any Subsidiaries means those
Permits, authorizations, approvals and permission required to be obtained by the
Subsidiary under
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Environmental Laws in connection with the Business or the use and operation of
the Assets owned or leased by them.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" means generally accepted accounting principles in effect on the
date hereof as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession of the United States.
"Governmental Body" means any federal state, local or foreign
government, government agency or department, court, or self-regulatory body.
"Hazardous Substances" means any dangerous, toxic, reactive, corrosive,
ignitable, radioactive, caustic or otherwise hazardous material, pollutant,
contaminant, chemical, waste or substance defined, listed or described as any of
such in or governed by any Environmental Law, including urea-formaldehyde,
solvents, acids, bases, heavy metals, polychlorinated biphenyls, asbestos or
asbestos-containing materials, radon, explosives, known carcinogens, petroleum
and its derivatives or petroleum products.
"Inventory" means, as of any date, collectively, all inventories of
merchandise and other products owned by any of the Subsidiaries and held for
resale or for distribution, together with packaging and samples thereof owned by
any of the Subsidiaries as of such date.
"IRS" means the Internal Revenue Service.
"knowledge of PICK Communications" shall mean actual knowledge, after
performance of the duties reasonably within the scope of each such person's
responsibility in the position held, of any officer of PICK Communications.
"Liability" means any direct or indirect indebtedness, liability,
assessment, claim, loss, damage, deficiency, obligation or responsibility, fixed
or unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or
unsecured, accrued, absolute, actual or potential, contingent or otherwise
(including any liability under any guaranties, letters of credit, performance
credits or with respect to insurance loss accruals).
"Lien" means, with respect to any Asset, any mortgage, lien (including
mechanics, warehousemen, laborers and landlords liens), claim, pledge, charge,
security interest, preemptive right, right of first refusal, option, judgment,
title defect or encumbrance of any kind in respect of or affecting such Asset.
"Material Adverse Effect" shall mean an effect on the Condition of the
Business which is or would be materially adverse.
"Order" means any permanent or temporary order, judgement or decree.
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"Person" means an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity, including a government or political subdivision or
an agency or instrumentality thereof.
"Receivables" means as of any date any trade accounts receivable
arising in the ordinary course of business.
"Regulatory Actions" means any claim, demand, action, suit or
proceeding brought or instigated by any Governmental Body in connection with any
Environmental Law, including civil, criminal and/or administrative proceedings,
whether or not seeking costs, damages, penalties, expenses or injunctive relief.
"Release" means the intentional or unintentional, spilling, leaking,
disposing, discharging or disturbance of, or emitting, depositing, injecting,
leaching, escaping or any other release or threatened release, however defined,
of any Hazardous Substance.
"Tax" (including, with correlative meaning, the terms "Taxes" and
"Taxable") means (i) any net income, gross income, gross receipts, sales, use,
ad valorem, transfer, transfer gains, franchise, profits, license, withholding,
payroll, employment, social security (or similar), unemployment, disability,
excise, severance, stamp, rent, recording, registration, occupation, premium,
real or personal property, intangibles, environmental (including taxes under
Code ss. 59A) or windfall profits tax, alternative or add-on minimum tax,
capital stock, customs duty or other tax, fee, duty, levy, impost, assessment or
charge of any kind whatsoever (including taxes assessed to real property and
water and sewer rents relating thereto), together with any interest and any
fine, penalty, addition to tax or additional amount or deductions imposed by any
Governmental Body (domestic or foreign) (a "Tax Authority") responsible for the
imposition of any such tax, whether disputed or not, including any liability
arising under any tax sharing agreement, with respect to the Seller or PICKSAT,
the Business or the Assets (or the transfer thereof); (ii) any liability for the
payment of any amount of the type described in the immediately preceding clause
(i) as a result of the Seller or PICKSAT being a member of an affiliated or
combined group with, or as a successor to or transferee from, any other
corporation at any time on or prior to the Closing Date; and (iii) any liability
of the Seller or PICKSAT for the payment of any amounts of the type described in
the immediately preceding clause (i) as a result of a contractual obligation to
indemnify any other person.
"Schedule Date" means the date on which the parties have agreed to all
of the Schedules contemplated by this Agreement.
"Tax Return" means any return or report (including elections,
declarations, disclosures, schedules, attachments, estimates and information
returns) relating to Taxes required to be supplied to any Tax Authority, and
including any amendment thereof.
17. Interpretation. Unless the context otherwise requires, the terms defined in
Section 16 shall have the meanings herein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. All accounting terms defined in Section 16, and those accounting
terms used in this Agreement not defined in Section 16, except as otherwise
-34-
expressly provided herein, shall have the meanings customarily given thereto in
accordance with GAAP. When a reference is made in this Agreement to Sections or
Exhibits, such references shall be to a Section of or Exhibit to this Agreement,
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
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IN WITNESS WHEREOF, the undersigned have executed this Option Agreement
as of the date first written above.
PICK COMMUNICATIONS CORP.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Agent
ATLANTIC TELE-NETWORK, INC.
By: /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Financial Officer
The undersigned agree to be bound by the provisions of Section 3.12 of the
foregoing Option Agreement.
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------------------
Xxxxxx X. Xxxxxxx, Attorney-in-fact- for Xxxxx Xxxxx
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