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EXHIBIT 4.1
SHOWSCAN ENTERTAINMENT INC.
CULVER CITY, CALIFORNIA, U.S.A.
US$ 7'000'000.--
8% Convertible Notes
Due September 1, 1999
-------------------------------------------
NOTE PURCHASE, PAYING AND CONVERSION AGENCY
AGREEMENT
AUGUST 14, 1995
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TABLE OF CONTENTS
DEFINITIONS
I. SUBJECT 4
II. ANNEXES 5
III. SALES RESTRICTIONS 5
IV. COMMISSION AND EXPENSES 9
V. WARRANTIES 10
VI. PAYMENT TO THE COMPANY 13
VII. CONDITIONS TO THE OBLIGATIONS
OF BANCA DEL GOTTARDO 13
VIII. INFORMATION MEMORANDUM 15
IX. PRINTING OF THE NOTES 15
X. SERVICING OF THE NOTES 16
XI. CANCELLATION OF NOTES AND COUPONS 18
XII. COVENANTS 18
XIII. RIGHT OF TERMINATION 21
XIV. COMMUNICATIONS 22
XV. APPLICABLE LAW AND JURISDICTION 23
XVI. EFFECTIVENESS 23
XVII. CURRENCY INDEMNITY 24
XVIII. ENTIRE AGREEMENT 24
XIX. AMENDMENT OF CANCELLATION, WAIVER 24
ANNEX A TERMS OF THE NOTES 26
ANNEX B DEFINITIVE NOTE (FACE) 43
ANNEX C INTEREST COUPONS 45
ANNEX D GLOBAL NOTE 46
ANNEX E AGENCY AGREEMENT 48
ANNEX F PLEDGE/SECURITY AGREEMENT 63
ANNEX G CERTIFICATION OF NON U.S. BENEFICIAL OWNERSHIP 72
ANNEX H CERTIFICATE OF NO MATERIAL ADVERSE CHANGE 73
ANNEX I SPECIMEN SIGNATURE FORM 74
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NOTE PURCHASE, PAYING AND CONVERSION AGENCY AGREEMENT
entered into effective as of August 14, 1995
between
SHOWSCAN ENTERTAINMENT INC.
being a corporation existing under the laws of the State of Delaware whose head
office is situated at 0000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000,
U.S.A.
(hereinafter called the "Company")
on the one part
and
BANCA DEL GOTTARDO
being a corporation duly organized with limited liability and existing under
the laws of Switzerland, whose registered office is situated at Xxxxx Xxxxxxx
Xxxxxxxxx 0, 0000 Xxxxxx, Xxxxxxxxxxx,
(hereinafter called "Banca del Gottardo")
on the other part
Some Definitions
The Company's 8% Convertible Notes of 1995 due September 1, 1999, are referred
to herein as the "Notes". Until the Notes have been printed in definitive form
pursuant to Article IX hereof, the expression "Notes" herein shall include
entitlements under the Global Note, and the expressions "Noteholder(s)" and
"Couponholder(s)", mutatis mutandis, shall mean and include persons and
entities entitled to the benefits under the Global Note. Each Noteholder
possesses a co-ownership in the Global Note in relation to the principal amount
of Notes he is an owner of.
"Global Note" means a temporary global convertible note for the total principal
amount of USD 7'000'000.-- issued in bearer form and representing with up to
1'400 single Notes the aforementioned total principal amount. The Global Note
will be marked "cancelled" and returned to the Company if and when the Notes
are printed.
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I. SUBJECT
On the basis of the representations and warranties herein contained and
subject to the terms and conditions hereof
- the Company, pursuant to authorization by its Board of
Directors, agrees to issue and sell to Banca del Gottardo at
a price of 100% of their principal amount, and
- Banca del Gottardo agrees
(1) to purchase (i.e. underwrite) at a price of 100% of
their principal amount, and
(2) to offer in a placement exclusively to its clients and
other financial institutions at a price of 100% of
their principal amount,
Notes of 1995
with a total principal amount of USD 7'000'000.--
(United States Dollars seven million)
maturing on September 1, 1999
bearing interest at the rate of 8% per annum, payable
semi-annually in arrears each
March 1 and September 1,
commencing March 1, 1996 until maturity.
Delivery of the Notes shall be made at the offices of Banca del
Gottardo, Xxxxx Xxxxxxx Xxxxxxxxx 0, 0000 Xxxxxx, Xxxxxxxxxxx.
The net proceeds of the Notes will be utilized by the Company for the
financing of acquisitions, working capital and general corporate
purposes.
Banca del Gottardo shall not have any responsibility for or be obliged
to concern itself with the application of the net proceeds of the Notes.
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II. ANNEXES
The contents of each of the Annexes attached hereto, i.e.
Annex A: Terms of the Notes
Annex B: Form of Definitive Note (face)
Annex C: Form of Interest Coupons
Annex D: Form of Global Note
Annex E: Agency Agreement
Annex F: Pledge/Security Agreement
Annex G: Certification of Non U.S. Beneficial Ownership
Annex H: Form of Certificate of No Material Adverse Change
Annex I: Specimen signature form
shall constitute an integral part of this Agreement.
III. SALES RESTRICTIONS
a) The Notes to be issued pursuant to this Agreement have not been
and will not be registered under the United States Securities Act
of 1933, as amended (the "Securities Act"), and may not be
offered, sold or delivered, directly or indirectly, in the United
States or to, or for the account or benefit of, any U.S. person
except in transactions exempt from the registration requirements
of the Securities Act.
b) As to the Company, the Notes are intended to be obligations that
are not required to be in registered form for purposes of United
States federal tax laws. Accordingly, the Notes may not, as part
of any part of the initial distribution, be offered for sale or
resale, sold or delivered, directly or indirectly, to a person in
the United States or to a United States person. Banca del Gottardo
agrees and represents that (i) no Notes are offered, sold or
delivered to or on behalf of a person within the United States or
a United States person, (ii) (a) it will not offer or sell, and,
during the period beginning on the earlier of the first date that
the Notes are offered or the Settlement Date (as defined in
Article IV hereof) and ending on the date forty (40) days after
the Settlement Date (the "Restricted Period"), it will not offer
or sell, Notes to a person who is within the United States or to a
United States person, (b) it has not delivered and will not
deliver within the United States definitive Notes that are sold
during the Restricted Period, (c) it has and throughout the
Restricted Period will have in effect procedures reasonably
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designed to ensure that its employees or agents who are directly
engaged in selling Notes are aware that such Notes may not be
offered or sold during the Restricted Period to a person who is
within the United States or to a United States person and (d) it
has not entered and will not enter into any contractual
arrangement with respect to the distribution and delivery of the
Notes, except with its non-United States affiliates or with the
prior written consent of the Company and (iii) with respect to
each affiliate that acquires from it Notes for the purpose of
offering or selling such Notes during the Restricted Period,
repeating and confirming the representations and agreements
contained in clauses (ii) (a), (b) and (c) on each such
affiliate's behalf. For purposes of this Agreement, whether an
offer, sale or delivery is made to a person within the United
States or to a United States person will be determined under the
rules set out in the United States Internal Revenue Code of 1986
(the "Code") and United States Treasury Regulation Section
1.163-5(c)(2)(i)(D). Banca del Gottardo agrees that it will comply
fully with the selling restrictions set out in this Sub-Section
(b) and, in particular, Banca del Gottardo hereby covenants and
agrees to the effect set out in clauses (ii) and (iii) of the
second preceding sentence.
c) The Notes will be represented initially by the Global Note,
without interest coupons, to be deposited by the Company with
Banca del Gottardo, on the Settlement Date. The Global Note may be
exchanged, as a whole or in part, for appropriate definitive
Notes, in bearer form in denominations of USD 5'000.-- with
interest coupons (the "coupons") attached, not earlier than 40
days after the later of the date on which the Notes are first
offered or the Settlement Date, before which time no Notes
represented by the Global Note or interest therein may be
transferred directly or indirectly into the United States or to a
U.S. person. Such exchange shall be made upon certification, in
the form attached hereto as Annex G, that the beneficial owners of
the Notes are not United States persons or U.S. persons or are
financial institutions (within the meaning of United States
Treasury Regulation Section 1.165-12(c)(1)(v)) located outside the
United States that are not United States persons and that have
purchased such Notes for resale during the Restricted Period and
that certify they have not acquired the Notes for purposes of
resale directly or indirectly to a United States person or to a
person within the United States. A beneficial owner of Notes must
exchange its share of the Global Note for definitive Notes before
such Notes or interests therein may be transferred or interest
payments or other payments in respect of the Notes will be made.
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d) In this Agreement, references to "dollars" and "USD" are to United
States dollars, the term "United States" means the United States
of America (including the States and the District of Columbia),
its territories, its possessions and other areas subject to its
jurisdiction, and the term "United States person" means a citizen
or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate
or trust the income of which is subject to United States federal
income taxation regardless of its source, "U.S. person" shall have
the meaning set forth in Sections 230.901 through 904 of Title 17
of the United States Code of Federal Regulations ("Regulation S").
e) The following legends will appear on the Global Note and all Notes
and coupons issued pursuant to the Offer: (i) "Any United States
person who holds this obligation will be subject to limitations
under the United States income tax laws, including the limitations
provided in sections 165(j) and 1287(a) of the Internal Revenue
Code", and (ii) "This Note has not been and will not be registered
under the United Stated Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered, sold or delivered,
directly or indirectly, in the United States or to, or for the
benefit of, any U.S. person (as such terms are defined in
Regulation S under the Securities Act)." The sections referred to
in the legend provide that, with certain exceptions, a United
States person will not be permitted to deduct any loss, and will
not be eligible for capital gain treatment with respect to any
gain, realized on a sale, exchange or redemption of such Notes or
coupons.
f) The Company, with respect to offers and sales of Notes by the
Company, and Banca del Gottardo, with respect to offers and sales
of Notes by Banca del Gottardo, represents, warrants and covenants
that the Notes have not been and shall not be offered or sold
except in accordance with Rule 903 of Regulation S promulgated
under the Securities Act or in a transaction exempt from the
registration requirements of the Securities Act. Each of the
Company and Banca del Gottardo represents, warrants and covenants
that (i) none of it, its affiliates or any person acting on its
behalf has engaged or will engage in any directed selling efforts
(as defined in Rule 902 promulgated under the Securities Act) and
it has complied and will comply with the offering restrictions of
Regulation S under the Securities Act in connection with the offer
of the Notes, (ii) none of it, its affiliates or any person acting
on its behalf has utilized or will utilize any form of general
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solicitation or general advertising (as such terms are used in
Regulation D promulgated under the Securities Act) in the United
States in connection with the offer of the Notes, (iii) none of
it, its affiliates or any person acting on its behalf has made or
will make an offer of the Notes in circumstances that would
require the registration of the Notes under the Securities Act and
(iv) requests to purchase Notes shall be accepted only from
persons who are not within the United States.
g) Banca del Gottardo agrees that at or prior to confirmation of the
sale of the Notes, it will have sent to each distributor, dealer
or person receiving a selling concession, fee or other
remuneration that purchases Notes from it during the Restricted
Period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the closing date,
except in either case in accordance with Regulation S under the
Securities Act. Terms used above have the meaning given to them by
Regulation S under the Securities Act."
Banca del Gottardo represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect
to the distribution of the Notes, except with its affiliates or
with the prior written consent of the Company.
Banca del Gottardo agrees to comply with all applicable laws and
regulations in each jurisdiction in which it purchases, offers,
sells or delivers Notes, or has in its possession or distributes
the Information Memorandum or any amendments or supplements
thereto or any such other offering material, in all cases at its
own expense.
h) Banca del Gottardo has been advised by the Company and
acknowledges and confirms that it is aware (a) that a violation or
breach of any of the terms and conditions of Article III of this
Agreement could directly cause the Company to become subject to
damages and liabilities (including, but not limited to, excise
taxes, a loss of the interest deduction and assumption of
withholding taxes) under various United States securities and tax
laws, and (b) that, as a consequence, it
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could be held liable for such damages and liabilities, in the
event it violated or breached such terms and conditions.
IV. COMMISSION AND EXPENSES
a) The Company will pay on September 1, 0000 Xxxxxx time (the
"Settlement Date") to Banca del Gottardo
(1) a managing and underwriting commission of 6 1/4%
(2) USD 50'000.-- for out-of-pocket expenses incurred by Banca
del Gottardo, which shall include all legal fees and
expenses.
The payment by the Company of (1) and (2) above will be made by
deduction from the payment by Banca del Gottardo to the Company of
USD 7'000'000.-- of the principal amount, resulting in the net
proceeds as per Article VI.
b) The Company shall further bear when ascertainable and due
- all present or future taxes, duties or other charges levied
by or within the United States of America in connection
with the execution and delivery of this Agreement; and
- the commissions and expenses for the servicing of the Notes
as per Article X;
c) The Company will reimburse Banca del Gottardo on first demand for
all reasonable bank charges, legal fees and other reasonable costs
and expenses incurred or to be incurred by Banca del Gottardo in
case of or in connection with reorganization, merger,
restructuring or default, actual or threatened, of the Company as
well as in connection with the convening of a Noteholders' meeting
and the preservation and enforcement of any of the rights under
this Agreement, the Pledge/Security Agreement, the Global Note or
the Notes.
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d) Banca del Gottardo shall bear
- all costs and expenses in connection with the initial
offering and placement of the Notes incurred by it.
Banca del Gottardo shall further bear
- the cost for the printing and delivery of the definitive
Notes (if printed) incurred by Banca del Gottardo on behalf
of the Company.
- all costs incurred by it in connection with the offering,
including the printing in Switzerland of the Information
Memorandum relating to the Notes.
V. WARRANTIES
A) The Company warrants to and for the benefit of Banca del Gottardo that:
1. Status: it is a corporation duly incorporated and existing in
good standing under the laws of the State of Delaware capable of
suing and being sued and has the power and authority to own its
assets and to conduct the business which it presently conducts;
2. Powers: it has the power to enter into, exercise its rights and
perform and comply with its obligations under this Agreement and
the Pledge/Security Agreement;
3. Authorization and Consents: except as to the registration
requirements provided for herein, all actions, conditions and
things required by the laws of the State of Delaware and the
United States of America have been taken, fulfilled and done
(including the obtaining of any necessary consents) in order
a) to enable it lawfully to enter into, exercise its rights
and perform and comply with its obligations under this
Agreement and the Pledge/Security Agreement; and
b) to ensure that those obligations are legally binding and
enforceable in accordance with their terms subject to
general equity principles, to applicable
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bankruptcy, insolvency, conservatorship, reorganization and
other similar debtor relief laws now or hereafter in
effect, and to other laws establishing liens and priorities
or otherwise relating to or affecting creditors- rights;
4. Non-Violation of Laws, etc: its entry into, and exercise of its
rights and/or performance of or compliance with its obligations
under this Agreement, the Pledge/Security Agreement, the terms of
the Global Note and the Notes do not and will not violate in any
material way
a) any law to which it is subject; or
b) its Certificate of Incorporation; or
c) any agreement to which it is a party or which is binding on
it or its assets, and does not and will not result in the
existence of, or obligate it to increase, any security
interest in those assets;
except to the extent that any such violations in the aggregate
would not have a material adverse effect on the financial
conditions of the Company;
5. Obligations Binding: its obligations under this Agreement, the
Pledge/Security Agreement, the Global Note and the Notes when duly
executed and delivered are valid, binding and enforceable in
accordance with their terms subject to general equity principles,
to applicable bankruptcy, insolvency, conservatorship,
reorganization and other similar debtor relief laws now or
hereafter in effect, and to other laws establishing liens and
priorities or otherwise relating to or affecting creditors'
rights;
6. Information Memorandum: the information pertaining to the Company
and its subsidiaries which is contained in the Information
Memorandum (defined in Article VIII) is accurate in all material
respects and there are no other facts the omission of which makes
any statement therein, in light of the circumstances under which
they were made, materially misleading;
7. Accounts: the audited and unaudited consolidated financial
statements included as contained in the Information Memorandum
present fairly the results and financial
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condition of the Company as a whole for the periods and as of the
dates thereof, subject, in each case of unaudited financial
statements, to normal year-end audit adjustments, and have been
prepared in accordance with generally accepted accounting
principles in the United States of America consistently applied;
8. No Material Adverse Change: save as disclosed in the Information
Memorandum, there has been no material adverse change in the
consolidated financial condition of the Company since June 30,
1995;
9. Litigation: except as disclosed in the Information Memorandum, no
litigation, arbitration or administrative proceedings or judgment
or award is current or, so far as the Company is aware, threatened
or pending
a) to restrain the entry into, exercise of its rights under
and/or performance or enforcement of or compliance with its
obligations under this Agreement; or
b) which either individually or collectively are material in
the context of the issue and sale of the Notes or the
making and performance of this Agreement and the
Pledge/Security Agreement;
10. No Breach or Default: neither failure to comply with Article III
nor any event described in Sections 8, 9 or 10 of the Terms of the
Notes has occurred and is continuing. The Company is not in breach
or in default under any agreement to an extent or in a manner
which has had or could have a material adverse effect on the
financial condition of the Company and its consolidated affiliates
taken as a whole.
(B) Since the commitment of Banca del Gottardo to purchase the Notes is made
on the basis of the aforesaid representations and warranties, the
Company hereby undertakes with Banca del Gottardo that it will hold
Banca del Gottardo harmless against all losses, liabilities, costs,
charges and expenses which it may incur as a noteholder as a result of
or in relation to any material misrepresentation or any material breach
of said representations and warranties by the Company, and as long as
any of the Notes are outstanding Banca del Gottardo shall be given
prompt notice by the Company of any claim, action or proceeding which
might give rise to an obligation under this clause (B) of Article V.
This indemnification by the Company shall be in addition to any other
remedy available to Banca del Gottardo under applicable law.
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VI. PAYMENT TO THE COMPANY
On the Settlement Date, Banca del Gottardo will pay to the Company the
net proceeds (the "Net Proceeds") of the Notes - after compensation with
the commissions and expenses mentioned in Article IV - of USD
6'512'500.-- against the Global Note being delivered to Banca del
Gottardo pursuant to Article VII.
Such net proceeds will be placed by Banca del Gottardo in US Dollars to
the credit of a US Dollar denominated account at Union Bank in Los
Angeles, CA, designated by the Company.
Such net proceeds will be at the free disposal of the Company subject to
any Swiss National Bank regulations or other regulations that may be in
force on the Settlement Date.
VII. CONDITIONS TO THE OBLIGATIONS OF BANCA DEL GOTTARDO
Banca del Gottardo shall have received from the Company at the latest on
August 28, 1995 the following documents:
(1) a copy of the Organization Certificate, together with all
amendments thereto, of the Company certified by the Secretary or
the Assistant Secretary of the Company and a copy of a Certificate
of the Secretary of State of the State of Delaware as to the good
standing of the Company, each dated as of a recent date;
(2) a certified copy of a resolution or resolutions duly adopted by
the Board of Directors of the Company signed by a duly authorized
officer of the Company, conferring the necessary authority upon
the person(s) signing this Agreement, the Pledge/Security
Agreement, the Information Memorandum, the Global Note, the Notes
and any related documents; and a certificate of the Secretary, or
Assistant Secretary of the Company as to the incumbency and
signatures of the officer(s) of the Company signing the documents
provided for in this clause (2) on behalf of the Company and the
approval of this Agreement, the Pledge/Security Agreement and the
Information Memorandum;
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(3) Global Note (in the form of Annex D, without interest coupons and
without reproduction of the terms of the Notes), duly issued and
signed by an authorized officer of the Company to be held in
escrow by Banca del Gottardo pending payment of the Net Proceeds
pursuant to Article VI;
(4) an executed copy of the Agency Agreement as set forth in Annex E
hereto;
(5) specimen signatures for the printing of the Notes;
(6) Certificate of No Material Adverse Change dated as of the
Settlement Date and signed by an authorized officer of the
Company, substantially in the form of Annex H hereto;
(7) a legal opinion of Messrs. Xxxxxx & Xxxxxxx external U.S. counsel
to the Company on the laws of the United States of America, dated
as of the Settlement Date;
(8) an opinion of the Company's Tax Counsel with respect to the status
of the Notes in respect of United States taxes, dated as of the
Settlement Date;
(9) a certificate of two officers of the Company approving the terms
of the Notes and the issue and sale thereof by the Company;
(10) 2 copies of the Information Memorandum duly signed by an
authorized officer of the Company; and
(11) an executed copy of the Pledge/Security Agreement as set forth in
Annex F hereto.
Each of documents 4, 6, 7, 8, 9 and 11 shall be substantially as agreed by the
Company and Banca del Gottardo prior to August 28, 1995.
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VIII. INFORMATION MEMORANDUM
The Company will supply Banca del Gottardo in due time with information
and documentation for the preparation by Banca del Gottardo of the
Information Memorandum (the "Information Memorandum") relating to the
offering of the Notes, in compliance with Swiss law.
The Information Memorandum shall be reviewed by the Company and Banca
del Gottardo.
IX. PRINTING OF THE NOTES
If Banca del Gottardo deems the printing of the Notes to be necessary or
useful, Banca del Gottardo shall provide for such printing of all, but
not some only, of the Notes, at its cost on behalf of the Company. A
proof of the Notes (if printed) shall be approved by the Company, unless
the Company is then in default, prior to the printing thereof.
(1) If printed, the Notes shall
- be in the form of Annex B,
- have the Terms of the Notes (as per Annex A) reproduced in
English on the reverse side,
- be dated the Settlement Date, and
- bear in facsimile the signature(s) of one or more duly
authorized officer(s) of the Company
- have Coupons attached, whereas
(2) the Coupons shall
- be in the form of Annex C.
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(3) The Notes with Coupons attached shall be exchanged against the
Global Note delivered to Banca del Gottardo pursuant to Article
VII of this Agreement.
The Global Note so exchanged shall thereafter be cancelled and
returned to the Company.
The Company hereby irrevocably authorizes Banca del Gottardo to
reproduce on the coupons the signature of the President of the
Company set forth in the specimen signature form of Annex I
attached hereto, with the same binding effect upon the Company as
if the Notes and the coupons had been issued and signed by the
Company on the Settlement Date.
If printed, Notes and/or Coupons which are mutilated, lost or
destroyed may be replaced by Banca del Gottardo in accordance with
the respective provisions of the Terms of the Notes.
X. SERVICING OF THE NOTES
(1) Transfer of funds
The Company will effect transfer of the funds in freely disposable
United States Dollars required to make any payment of principal or
interest on the Notes, including the commissions referred to in
paragraph (2) hereafter, to Banca del Gottardo, Lugano, as Paying
Agent, for value the respective due date provided that, if such
due date does not fall on a Business Day, the Company shall be
obliged to effect transfer of such payments for value the Business
Day immediately preceding such due date. Any transfer risk shall
be borne by the Company.
"Business Day" means a day on which commercial banks are open for
domestic business and foreign exchange (including dealings in US
Dollars) in Lugano and Los Angeles, CA.
Banca del Gottardo will supply the Company, by facsimile or
otherwise in writing received by the Company not less than five
Business Days prior to each due date for any payment under the
Notes, with any necessary information including reference numbers
and the name of a contact person for the receipt of funds.
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Further information regarding the transfer may be obtained by
Banca del Gottardo from the Company at the address set out in
Article XIV below.
Banca del Gottardo shall credit the funds received to separate
non-interest bearing accounts with Banca del Gottardo for each
Coupon due date and/or redemption date. The receipt by Banca del
Gottardo of the due and punctual payment of the funds in Lugano
shall release the Company of its obligations under the Global Note
or under the Notes for the interest and principal, to the extent
of such payment.
Any funds held by Banca del Gottardo which will not be used as a
consequence of Coupons and Notes not having been collected within
the relevant period described by the statute of limitations, shall
be held by Banca del Gottardo in USD at the disposal of the
Company. Banca del Gottardo shall promptly after the expiry of the
relevant period inform the Company about the respective amount.
The risk of any exchange loss on the transfer of funds so held by
Banca del Gottardo from Banca del Gottardo to the Company shall be
borne by the Company, provided the transfer is made by order of,
or with the consent of, the Company.
(2) Commissions and Expenses
The Company will pay to Banca del Gottardo for the servicing of
the Notes a commission of
- 0.25% on the face amount of Coupons to be paid and
- 0.125% on the principal amount of Notes redeemed.
(3) Modalities
Except as provided in paragraph (1) of Article XI or in Section 5
of the Terms of the Notes, any transfer by the Company as per (1)
and (2) above, shall be made in US Dollars freely disposable,
without any restrictions, and whatever the circumstances may be,
irrespective of the nationality or domicile of the holder of Notes
and/or Coupons, and without requiring any affidavit, or the
fulfilment of any other formality.
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(4) Paying Agency
The Company hereby appoints Banca del Gottardo as sole Paying
Agent (the "Paying Agent") and Banca del Gottardo agrees to pay to
the Noteholders all amounts to become due under the Notes.
The Company undertakes, in connection with the Issue, not to
appoint any institutions as paying agent without the consent of
Banca del Gottardo, which consent shall not be unreasonably
withheld and not to pay to other banks any commission or
remuneration for the payment of interest or principal on the
Notes.
XI. CANCELLATION OF NOTES AND COUPONS
(1) The Company requests and authorizes Banca del Gottardo and Banca
del Gottardo undertakes to cancel and destroy all Coupons paid and
Notes redeemed, converted or replaced, after the period prescribed
by law, and to certify to the Company in writing the serial
numbers of Notes destroyed, the dates when such destruction took
place and the names of the persons witnessing such destruction.
Banca del Gottardo reserves the right to record cashed Coupons as
well as redeemed, repaid, converted or replaced Notes on video
tape or other data carriers and to store them in this way instead
of keeping them physically during the period prescribed by law and
to destroy them subsequently. This reproduction of Coupons and/or
Notes will remain in safekeeping at Banca del Gottardo during the
statutory limitation.
(2) If Notes and Coupons have not been printed, Banca del Gottardo
shall cancel the Global Note and return it to the Company upon
receipt from the Company of all payments due under the Terms of
the Notes and this Agreement.
XII. COVENANTS
As long as any of the Notes remain outstanding, the Company undertakes:
(1) To send to Xxxxx xxx Xxxxxxxx
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x) Annual Reports, on Form 10-K, as filed with the United
States Securities and Exchange Commission (the "SEC"),
which report shall include or be accompanied by a copy of
the report of the Company's independent auditor', and
b) such regular and periodic reports on Form 10-Q and Form 8-K
(deemed material) as the Company files with the SEC.
Banca del Gottardo is authorized to hold these documents at the
disposal of the Noteholders and/or holders of Coupons for
inspection.
(2) To provide Banca del Gottardo forthwith upon becoming aware thereof with
- any change of its Certificate of Incorporation, By-laws (if
any), and without waiting for Banca del Gottardo to take
any of the actions mentioned in Section 8, 9 or 10 of the
Terms of the Notes, with
- a notice in writing of any event provided for in Section 8,
9 or 10 of the Terms of the Notes.
(3) To appoint one member to its Board of Directors upon request of
Banca del Gottardo and, if an Executive Committee of the Board of
Directors is formed, to appoint the Director as a member of the
Executive Committee of the Board of Directors and thereafter to
nominate such appointees for election by the Company's
stockholders and use its best efforts to assure their election
until any Note or Notes shall be redeemed by the Company.
(4) To hold at least four meetings of the Board of Directors during
each fiscal year.
(5) To provide Banca del Gottardo with quarterly financial statements
of the Company as included in the Company's Form 10-Q as filed
with the Securities and Exchange Commission by no later than the
45th day following the quarter and date covered by such
statements. The Company shall also provide Banca del Gottardo with
a synopsis of the utilisation of the Net Proceeds of this issue.
20
(6) Except as to outstanding commitments or with respect to eligible
persons under existing stock or option plans, for a one year
period following the date of this issue, not to grant any options
to employees of the Company or to the Board of Directors of the
Company or to other third parties without the written approval
(which approval shall not be unreasonably withheld) of Banca del
Gottardo, unless in conjunction with this issue; provided,
however, the foregoing restrictions shall not apply to any options
or other securities, the exercise price or purchase price of which
is not less than both of the Conversion Price (as defined in Annex
A hereto) of the Notes and the then current Market Price (as
defined in Annex A hereto) of the Company's common stock.
(7) Except for the Company's current stockholder rights plan and with
respect to the exercise or conversion of any currently outstanding
options, warrants, or convertible securities of the Company, and
except as permitted elsewhere in this Agreement or in the Notes,
(i), not to issue any securities relating to the Company's capital
stock, (ii) not to create and/or grant any kind of stock purchase
rights, be it in the form of stock dividends or stock options or
through any other means (sometimes referred to or known as "poison
pills") to its stockholders or to the Board of Directors of the
Company or to other third parties, (iii) not issue any other type
of equity securities, (iv) not to issue any rights or warrants
entitling to subscribe for the Company's capital stock and (v) not
to distribute any debt securities or assets of the Company or
rights or warrants to purchase assets or securities of the Company
(excluding cash dividends or distributions in form of retained
earnings) to all holders of the Company's common stock, nor
distribute any assets of the Company or rights or warrants to
purchase assets of the Company to any third party, without the
written approval of Banca del Gottardo, unless in conjunction with
the issue of the Notes; provided, however, the foregoing
restrictions shall not apply to any options or other securities,
the exercise price or purchase price of which is the higher than
both of the Conversion Price (as defined in Annex A hereto) of the
Notes and the then current Market Price (as defined in Annex A
hereto) of the Company's common stock.
(8) To secure by a separate Pledge/Security Agreement in favor of the
Noteholders the Notes by a pledge on the Collateral (as defined
below). The Pledge/Security Agreement shall be in the form
substantially as set forth in Annex F.
21
(9) (a) So long as any Notes are outstanding, to keep available
authorized shares of Common Stock sufficient to permit all
Notes outstanding and unconverted to be converted in
accordance with the Conversion Provisions (Exhibit 1 to Annex
E of the Agreement);
(b) to assure that all shares of Common Stock delivered upon
conversion of Notes will be validly issued, fully-paid and
non-assessable;
(c) to file and use its best efforts to cause to be declared
effective, on or before November 1, 1995, any registration
under the United States securities laws that may be required
before the Shares can be delivered upon conversion of the
Notes and freely marketed in the United States.
(10) Except with respect to existing commitments, requirements and
stock or options available for grant or issuance under existing
stock or option plans or with respect to any securities that the
Company may issue in accordance with the proviso at the end of
paragraphs XII(6) and XII(7) hereof, not to file any Registration
Statement covering all outstanding warrants, options and shares of
the Company without the written approval of Banca del Gottardo,
unless compelled to do so under a preexisting agreement.
(11) Not to amend the Company's current stockholder rights plan without
the written approval of Banca del Gottardo, so that the Notes
and/or the shares of Common Stock issuable upon conversion of the
Notes shall not participate equally under such plan with the other
shares of Common Stock then outstanding.
XIII. RIGHT OF TERMINATION
Notwithstanding anything contained in this Agreement, Banca del Gottardo
may by notice to the Company terminate this Agreement at any time before
the time on the Settlement Date when payment would otherwise be due
under this Agreement to the Company in respect of the Notes if:
(1) in the reasonable opinion of Banca del Gottardo, circumstances
shall be such as:
a) to prevent or to a material extent restrict payment for the
Notes in the manner contemplated in this Agreement; or
22
b) to a material extent prevent or restrict settlement of
transactions in the Notes in the market or otherwise; or
(2) in the reasonable opinion of Banca del Gottardo, there shall have
been:
a) any change in national or international political, legal,
tax or regulatory conditions; or
b) any calamity or emergency
which has in the reasonable view of Banca del Gottardo caused a
substantial deterioration in the price and/or value of the Notes.
Any such termination of this Agreement shall be without liability on the
part of Banca del Gottardo or on the part of the Company.
Upon any such termination of this Agreement, the parties hereto shall
(except for the liability of the Company in relation to expenses as
provided in Article IV (a) (2) hereof and except for any liability
arising before or in relation to such termination) be released and
discharged from their respective obligations under this Agreement.
XIV. COMMUNICATIONS
All communications among the Banks and the Company regarding this
Agreement shall be made in English language, by telex or facsimile,
followed by registered letter, and shall be transmitted
by the Company to: by Banca del Gottardo to:
------------------ -------------------------
Banca del Gottardo Showscan Entertainment Inc.
Xxxxx Xxxxxxx Xxxxxxxxx 0 0000 Xxxxxxxx Xxxxxx
0000 Xxxxxx, Xxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Capital Market U.S.A.
Department Attn: Xxxxxxx X. Xxxxx
President and Chief Executive
Officer
Telex-No.: 841 052
Facsimile: 0114191 281 843 Facsimile: (000) 000-0000
23
copies to:
X. Xxxxxx Lemon
Vice President and General Counsel
Facsimile: (310) 000-00 00
Xxxxxx Xxxx
Executive Vice President and Chief
Financial Officer
Facsimile: (310) 000-00 00
XV. APPLICABLE LAW AND JURISDICTION
The Terms of this Agreement shall be governed by Swiss law.
Any dispute which might arise between Banca del Gottardo on the one hand
and the Company on the other hand regarding this Agreement shall fall
within the jurisdiction of the ordinary Courts of Justice of the Canton
of Ticino, the place of jurisdiction being Lugano, with the right of
appeal to the Swiss Federal Court in Lausanne where the law permits.
Solely for purposes of the preceding paragraph and for the purpose of
execution of a judgment in Switzerland, the Company elects legal and
special domicile at Banca del Gottardo's office in Lugano, and Banca del
Gottardo shall send to the Company as soon as possible any documents
received by it in this connection.
Banca del Gottardo shall also be at liberty to enforce its rights and to
take legal action before the competent courts of the United States of
America, in which case Swiss law shall be applicable with respect to the
construction and interpretation of this Agreement.
XVI. EFFECTIVENESS
The effectiveness of this Agreement is subject to:
(a) the receipt by Banca del Gottardo of all documents as requested in
Article VII of this Agreement, in a form acceptable to Banca del
Gottardo,
(b) no exercise of the Right of Termination as per Article XIII.
24
XVII. CURRENCY INDEMNITY
If any sum due from the Company in favour of the Paying Agent has to
be converted from United States Dollars (the "first currency") into
another currency (the "second currency") for the purpose of (i) making
or filing a claim or proof against the Company, (ii) obtaining an
order or judgment in any court or other tribunal or (iii) enforcing
any order or judgment given or made in relation hereto, the Company
shall indemnify and hold harmless Banca del Gottardo from and against
any loss suffered as a result of any discrepancy between (a) the rate
of exchange used for such purpose to convert the sum in question from
the first currency into the second currency and (b) the rate or rates
of exchange at which Banca del Gottardo may in the ordinary course of
business purchase the first currency with the second currency upon
receipt of a sum paid to them in the second currency in satisfaction
in whole or in part of any such order, judgment, claim or proof.
This indemnity shall constitute a separate and independent obligation
from the other obligations contained herein, shall give rise to a
separate and independent cause of action and shall apply, irrespective
of any waiver granted by Banca del Gottardo from time to time and
shall continue in full force and effect notwithstanding any judgment
or order for a liquidated sum or sums in respect of amounts due
hereunder or under any such judgment or order. Any such loss or damage
aforesaid shall be deemed to constitute a loss suffered by Banca del
Gottardo and no further proof or evidence of any actual loss shall be
required by the Company.
XVIII. ENTIRE AGREEMENT
This Agreement together with the Annexes hereto and other agreements
and documents delivered pursuant hereto set forth the entire agreement
and understanding of the parties in respect of the subject matter
hereof and thereof and supersede all prior agreements, arrangements
and understandings relating to the subject matter hereof and thereof.
XIX. AMENDMENT OF CANCELLATION, WAIVER
This Agreement and the Annexes hereto may be amended, modified,
superseded or cancelled, and any of the terms hereof or thereof may be
waived, only by a written instrument executed by each party hereto or
thereto, as the case may be, or, in the case of a waiver, by the party
or parties waiving compliance. The failure of any party at any
25
time or times to require performance of any provision hereof or of
any Annex hereto shall in no manner affect the rights at a later time
to enforce the same. No waiver by any party of any condition or of
the breach of any term contained in this Agreement or in any Annex
hereto, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be construed as a further or continuing
waiver of any such breach or the breach of any other term of this
Agreement or of the Annexes hereto.
THUS DONE AND SIGNED in 2 originals, of which one is for the Company,
in Xxxxxx City effective as of August 14, 1995
SHOWSCAN ENTERTAINMENT INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
BANCA DEL GOTTARDO
By: /s/ Xxxxx Xxxxxxx
-----------------------------
/s/ Xxxxxxxxx Xxxxxxxx
-----------------------------
26
ANNEX A
Terms of the "Convertible Notes" of the Company
(1) Form and Denomination
The Notes are issuable in bearer form in the denominations of USD
5'000.-- nominal amount each, with interest coupons (the "Coupons")
attached. The Notes will be represented initially by a temporary Global
Note (the "Global Note"), without interest coupons, to be deposited by
the Company with Banca del Gottardo on the Settlement Date. The Global
Note may be exchanged, as a whole or in part, for appropriate definitive
Notes, in bearer form in denominations of USD 5'000.-- with the Coupons
attached, not earlier than 40 days after the later of the date on which
the Notes are first offered or the Settlement Date. Such exchange shall
be made upon certification that the beneficial owners of the Notes are
not United States persons or U.S. persons or are financial institutions
(as defined in United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States that are not United
States persons and that have purchased such Notes for resale during the
Restricted Period and that certify that they have not acquired the Notes
for purposes of resale directly or indirectly to a United States person
or to a person within the United States. A beneficial owner of Notes
must exchange its share of the Global Note for definitive Notes before
such Notes or interests therein may be transferred or interest payments
or other payments in respect of the Notes will be made.
For purposes hereof, (i) the term "Restricted Period" means the period
beginning on the earlier of the first date that the Notes are offered or
the date on which the Notes are issued (the "Settlement Date") and
ending on the date forty (40) days after the Settlement Date, (ii) the
term "United States" means the United States of America (including the
States and the District of Columbia), its possessions, its territories
and other areas subject to its jurisdiction, (iii) the term "United
States person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision
thereof, or an estate or trust the income of which is subject to United
States federal
27
income taxation regardless of its source and (iv) the term "U.S. person"
has the meaning set forth in Sections 230.901 through .904 of Title 17
of the United States Code of Federal Regulations ("Regulation S").
(2) Interest
The Notes bear interest from the Settlement Date at the rate of 8% per
annum, payable semi-annually in arrear on March 1 and September 1 of
each year until maturity (the "Coupon Due Dates") whereby the first
payment shall be made on March 1, 1996 in respect of the period from
September 1, 1995 to March 1, 1996. Such interest is payable in United
States Dollars. Each Note will cease to bear interest on the date on
which they become due for redemption or repayment unless payment of
principal and/or premium (if any) is improperly withheld or refused or
default is otherwise made in respect of such payment. In such event,
interest will continue to accure (as well after as before any judgment)
up to but exluding the date on which payment in full of the principal of
such Note is made or (if earlier) the date on which, payment in full of
the principal thereof having been received by Banca del Gottardo, notice
to that effect shall have been given to the holders of the Notes.
Interest is computed on the basis of a 360-day year of twelve 30-day
months.
(3) Repayment
The Company undertakes to repay the principal amount of the Notes,
unless previously redeemed, without any previous notice on September 1,
1999.
(4) Optional Redemption and Conversion / Call Option
The Company reserves the right to call all, but not part, of the
outstanding Notes for redemption on September 1, 1996, or thereafter, at
a price of 110% of the principal amount thereof, together with interest
accrued to the date of such redemption provided that the average of the
daily closing sales prices (as defined below) of a share of the
Company's Common Stock, par value USD .001 per share (the "Shares") for
a period of 30 consecutive trading days, the last day of which trading
days is not more than 10 days prior to the day upon which the Company
sends a notice to Banca del Gottardo of its intention to redeem the
Notes under this sub-section (a), is at least 200% of the conversion
price in effect on such last day (taking into account any retroactive
28
adjustment not then reflected in the conversion price). The closing
sales price for any day shall be the average of the closing bid and
asked prices on the National Association of Securities Dealers Automated
Quotation (NASDAQ) (the "Market Price"). All outstanding Notes will
become due 60 days after receipt of the aforesaid notice of early
redemption by Banca del Gottardo.
If the Shares are listed on a stock exchange or exchanges in the United
States of America, reference in this sub-section (a) to the sales price
for any day shall be deemed to refer to the closing price (regular way)
of a Share as reported by the principal stock exchange on which the
Shares are listed for such day. If no such sales price is reported for
one or more trading days, such day or days shall not be deemed as
trading day or days and shall be disregarded in the calculation of the
said 30 trading day period.
Notes called for redemption shall cease to bear interest from the date
fixed for such redemption, unless the Company shall default in providing
for the payment of the redemption price. The Notes must be presented for
repayment with all unmatured coupons attached. An amount equal to any
missing unmatured coupon shall be deducted from the amount due on
redemption. Such coupons shall, however, be paid upon subsequent
presentation provided they shall not have become barred pursuant to
Section 11 hereof.
The Company will have the right to redeem any Note or Notes at any time
at a price of 108% of the principal amount thereof, together with
interest accrued to the due date of redemption, if less than 40% of the
Notes remain outstanding on the respective redemption date. This right
will have to be exercised by giving notice and surrendering the Note(s),
if any are printed, so to be redeemed to Banca del Gottardo, Lugano, at
any time on or after the date of the redemption notice accompanied by an
irrevocable request for redemption. Notes called for redemption will
become due 30 days after the date of the redemption notice. Notes called
for redemption shall cease to bear interest from the date fixed for such
redemption, unless the Company shall default in providing for the
payment of the redemption price. The Notes must be presented for
repayment with all unmatured coupons attached. An amount equal to any
missing unmatured coupon shall be deducted from the amount due on
redemption. Such coupons shall, however, be paid upon subsequent
presentation provided they shall not have become barred pursuant to
Section 11 hereof. Banca del Gottardo shall notify to the Noteholders in
accordance with Section 12 hereof.
29
(5) Payments
Payments with respect to the Notes and coupons shall be made in such
coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of private and public
debts therein, against presentation and surrender of such Notes or
coupons in the manner specified below. Such payments shall be made
without cost to the Noteholders, without any limitations and under all
circumstances notwithstanding any transfer restrictions, regardless of
any bilateral or multilateral payment or clearing agreement in existence
between the United States of America and the Swiss Confederation,
irrespective of the nationality, residence or domicile of any of the
Noteholders and without requiring any affidavit or the fulfillment of
any formalities. The funds required for the payment of principal and
interest and Additional Amounts as per Section 6 shall be made available
to Banca del Gottardo in Switzerland as Paying Agent by the Company
prior to each Coupon Due Date. The receipt of the funds by Banca del
Gottardo in Switzerland shall release the Company from its obligations
in respect of the payments due on the respective dates for principal and
interest.
Banca del Gottardo will arrange for payment of such funds as and when
due to the holders of Notes and coupons. Notes and coupons may be
presented for payment at the principal amount printed on the Notes and
the amount of interest printed on the coupons only at the offices in
Switzerland of Banca del Gottardo. No payment on the Notes or coupons
will be made by transfer to an account in, or by mailing to an address
in, the United States.
(6) Tax Status
All payments of interest and principal shall be made without deduction
of any taxes, imposts, penalties, duties, assessments or governmental
charges of any kind or nature at source (hereinafter individually
referred to as "Taxes") present or future, which are required to be
withheld (including, without limitation, back-up withholding) by the
Company (or the Paying Agent as such), and which are levied or imposed
or to be levied or imposed by the United States of America, or any
political subdivision or taxing authority thereof (a "Taxing
Jurisdiction").
In the event that any Taxes should at any time be imposed or levied by
any such Taxing Jurisdiction, the Company shall remit to the Paying
Agent for the account of the holders
30
of any Note or Coupons such additional amounts ("Additional Amounts") as
may be necessary to ensure that after deduction of any such Taxes of a
Taxing Jurisdiction, but before any deduction made in pursuance of Swiss
law, every net payment of the principal and interest on a Bond will not
be less than the amount provided for in such Note or Coupon to be then
due and payable.
The Company's obligation to remit Additional Amounts shall not be
subject to the fulfillment of any disclosure or certification
requirement with respect to the nationality, residence, status or
identity of the recipient of the payment or the beneficial owner of the
Note and/or Coupons in question.
The foregoing provisions do not, however, exempt Noteholders or
Couponholders from any Taxes imposed or levied in a Taxing Jurisdiction,
and the Company shall not be obligated to remit funds and pay Additional
Amounts on account of such Taxes if the holder (such term including for
purposes of this subsection the beneficial owner) of the Note or Coupon
is subject to taxation in a Taxing Jurisdiction for reasons other than
his ownership of such Note or Coupon or receipt of principal, premium
(if any) or interest in respect thereof, nor shall the Company be
obligated to remit funds and pay Additional Amounts in the event any
Taxes are imposed by reason of one or more of the following:
(a) any such tax, assessment or other governmental charge which would
not have been so imposed but for (i) the existence of any present
or former connection between such holder (or between a fiduciary,
settlor, beneficiary, member or shareholder of such holder, if
such holder is an estate, a trust, a partnership or a corporation)
and the United States, including, without limitation, such holder
(or such fiduciary, settlor, beneficiary, member or shareholder)
being or having been a citizen or resident thereof or being or
having been engaged in a trade or business or present therein or
having, or having had, a permanent establishment therein or (ii)
the presentation by the holder of any such Note or Coupon for
payment on a date more than 10 days after the date on which such
payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by
reason of such
31
holder's past or present status as a personal holding company or
foreign personal holding company or controlled foreign corporation
or passive foreign investment company with respect to the United
States or as a corporation which accumulates earnings to avoid
United States federal income tax or as a private foundation or
other tax-exempt organization;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments on or in respect of
any Note;
(e) any tax, assessment or other governmental charge imposed by reason
of such holder's past or present status as the actual or
constructive owner of 10% or more of the total combined voting
power of all classes of stock entitled to vote of the Company or
as a direct or indirect subsidiary of the Company; or
(f) any combination of items (a), (b), (c), (d) or (e);
nor shall Additional Amounts be paid with respect to any payment on or
in respect of a Note to a United States Alien who is a fiduciary or
partnership or other than the sole beneficial owner of such payment to
the extent such payment would be required by the laws of the United
States (or any political subdivision thereof) to be included in the
income, for tax purposes, of a beneficiary or settlor with respect to
such fiduciary or a member of such partnership or a beneficial owner who
would not have been entitled to the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the Noteholder.
The term "United States Alien" means any person who, for United States
federal income tax purposes, is a foreign corporation, a non-resident
alien individual, a non-resident alien fiduciary of a foreign estate or
trust, or a foreign partnership, one or more of the members of which is
a foreign corporation, a non-resident alien individual or a non-resident
alien fiduciary of a foreign estate or trust.
If, at any time, the Company furnishes an opinion of independent counsel
to the Company or other evidence satisfactory to Banca del Gottardo to
the effect that there is a substantial possibility that (i) the Company
either is, or on or before the next Interest Payment Date will be,
required by law or regulation to withhold at source any Taxes in respect
of the interest and/or principal with respect to the Notes or (ii) the
Company is,
32
or on or before the next Interest Payment Date will be, prohibited from
performing or observing any of its obligations contained in this Section
6, then the Company may, on giving not less than 60 days notice to Banca
del Gottardo, redeem the outstanding Notes on any date thereafter in
whole but not in part at 100% of par value plus accrued interest until
such date or redemption.
The notice of such redemption, which will include the date of such
redemption and the applicable redemption price thereof, will thereafter
be published by Banca del Gottardo in the newspapers mentioned in
Section 12 of the Terms of the Notes.
Prior to the publication of notice of redemption of the Notes pursuant
to this Section 6, the Company will deliver to Banca del Gottardo a
certificate signed by the President or any Vice President and the Chief
Financial Officer or the Secretary (upon which Banca del Gottardo may
conclusively rely) stating that the Company is entitled to effect such
redemption and setting forth in reasonable detail a statement of facts
showing that the conditions precedent to the right of the Company to
redeem the Notes pursuant to this Section 6 have occurred.
The Notes called for redemption cease to bear interest from the date
fixed for such redemption. They must be presented for repayment, with
all unmatured Coupons attached; the amount of missing Coupons will be
deducted from the amount due for repayment, but such Coupons shall be
paid upon subsequent presentation provided they have not become
unenforceable in accordance with Swiss law as specified in Section 11 of
the Terms of the Notes.
The interest on the Note is, in accordance with Swiss law at present in
force, not subject to the Swiss Federal Anticipatory Tax.
(7) Authorizations
The Company has confirmed to Banca del Gottardo that no authorizations
or approvals are required under the laws of the United States for
performance of its obligations hereunder, except for the registration
requirements provided for herein.
33
(8) Status of the Notes, Negative Pledge and Collateralization
The Notes constitute secured direct obligations of the Company, ranking
in priority pursuant to the pledge and to the extent that such pledge is
insufficient, equally with other unsecured and unsubordinated
indebtedness for borrowed money of the Company.
So long as any Note remains outstanding the Company will not at any time
pledge or otherwise subject to any lien any of its property or assets
that are pledged to Banca del Gottardo as Collateral (as defined below)
(other than (i) liens incurred in the ordinary course of business, as
for example, installment payment purchases of equipment or other assets
used in the Company's business and (ii) liens not incurred in the
ordinary course of business not exceeding USD 250'000.00 in the
aggregate), without thereby expressly securing the Notes equally and
ratably with any and all other obligations and indebtedness secured by
such pledge or other lien.
The Notes are secured by a pledge on all of the Company's right, title
and interest in and to all of the following, whether now or thereafter
existing or in which the Company now has or hereafter acquires an
interest and wherever the same may be located (collectively, the
"Collateral"): (1) all equipment in all of its forms, and all parts
thereof and all accessions thereto; (2) all inventory in all of its
forms, and all additions and accessions thereto and replacements and
products thereof; (3) all rights and claims to the payment or receipt of
money or other forms of consideration of any kind, including, but not
limited to, any and all such rights and claims in, to and under, all
accounts, accounts receivable, contracts, contract rights, chattel
paper, instruments, general intangibles, guaranties, letters of credit,
documents, drafts, acceptances, tax refunds, rights to performance, and
any judgments taken on any rights or claims otherwise included in this
clause (3) and all rights in, to and under all security agreements,
leases and other contracts securing or otherwise relating to any such
rights and claims to the payment or receipt of money or other forms of
consideration; (4) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data
processing software that at any time evidence or contain information
relating to any of the Collateral or are otherwise necessary or helpful
in the collection thereof or realization thereupon; (5) all fixtures,
storage and office facilities, and all additions and accessions thereto
and replacements thereof and products thereof; (6) all trademarks,
trademark applications, tradenames, trade secrets, business names,
patents, patent applications, licenses, copyrights, copyright
applications, computer programs, software, registrations and
34
franchise rights, and, in each case, all goodwill associated therewith;
(7) all cash and all deposit accounts; and (8) all proceeds and products
of any and all of the foregoing and, to the extent not otherwise
included, all payments under insurance, or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing; provided, nevertheless, that the term
"Collateral" shall not include (i) any right, title and interest of the
Company in and to the capital stock of any subsidiary and proceeds
thereof and (ii) any right, title and interest of the Company in and to
all films, motion pictures or videos developed (or in development),
produced, distributed or obtained for distribution by the Company
(directly or indirectly) for release in any medium, whether now known or
hereafter devised (the "Films"), including the scenario, screenplay or
script upon which they are based, at every stage of development, whether
preliminary, in process or in final form and whether or not used in
whole or in part in or as the basis of such Films; all property and
rights related thereto, whether tangible or intangible and whether now
in existence or hereafter made or produced, and whether or not in the
possession of the Company including, without limitation, all copyrights,
rights under copyrights and copyright applications and all physical
properties relating to a Film including, without limitation, all films,
prints, negatives, positives and the like; all collateral, allied,
ancillary, subsidiary and merchandising rights therein, and all
properties and things of value pertaining thereto and all products and
proceeds thereof whether now in existence or hereafter made, acquired or
produced, by a Pledge/Security Agreement (the "Pledge Agreement")
entered into between the Company and Banca del Gottardo dated September
1, 1995. The Pledge/Security Agreement is entered into under the laws of
California. Jurisdiction and venue are in the courts of the Superior
Court of California, Los Angeles County and/or the United States
District Court for the Central District of California, with the right to
appeal to the state and/or federal appellate Courts.
The Pledge/Security Agreement is held by Banca del Gottardo and is
available there during banking business hours to the Noteholders.
(9) Conversion
Exhibit 1 to Annex E attached to the Agreement dated August 14, 1995
(the "Agreement") and entered into between the Company and Banca del
Gottardo, which is available for inspection at the Head Office in Lugano
of Banca del Gottardo, as Conversion Agent for the Notes, contains full
provisions relevant to conversion of the Notes
35
into freely transferable Shares of Common Stock which are duly
registered under the 1933 Securities Act or exempt from the registration
requirements thereof. The following is a summary of such provisions:
The holder of any 10 or more Notes will be entitled at any time on and
after December 1, 1995 up to the close of business on August 20, 1999,
subject to prior redemption, to convert the Notes, at the principal
amount thereof, into freely transferable and non-restricted (such
non-restriction being subject to the effectiveness of a registration
statement under the U.S. securities laws covering such common stock or
exemption from the registration requirements of U.S. securities laws)
shares of Common Stock of the Company, at a price per share of USD 5.75,
subject to adjustment as described below (the "Conversion Price"). No
payment or adjustment will be made on conversion of any Note for
interest accrued thereon or dividends on any Common Stock issued, except
that accrued interest will be paid on the conversion of any Note which
has been called for redemption prior to the conversion date. The Company
is not required to issue fractional shares of Common Stock upon
conversion of Notes and, in lieu thereof, will pay a cash adjustment
based upon the market price of the Common Stock on the last trading day
prior to the date of conversion. In the case of Notes called for
redemption, conversion rights will expire at the close of business on
the fifth business day prior to the redemption date. Notes may be
presented for conversion only to an office of Banca del Gottardo outside
the United States and Banca del Gottardo will deliver Common Stock or
other consideration received upon conversion only to an account or
address outside the United States.
The conversion price is subject to adjustment in the following events
occurring after August 14, 1995:
- the issuance of stock of the Company as a dividend or distribution
on the Common Stock;
- subdivisions of outstanding shares of the Common Stock into a
greater number of shares;
- combinations of outstanding shares of Common Stock into a smaller
number of shares;
36
- distributions on the Common Stock in shares of the Company's
capital stock other than Common Stock; and
- reclassification of the Common Stock into other shares of the
Company's capital stock;
No adjustment in the conversion price will be made unless such
adjustment would require an increase or decrease of at least USD 0.05 in
the conversion price then in effect; but any adjustment that would
otherwise be required to be made shall be carried forward and taken into
account in any subsequent adjustment. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company dividend or
interest reinvestment plan. If the Company consolidates or merges into
or transfers or leases all or substantially all of its assets to any
person, or is a party to a merger that reclassifies or changes its
outstanding Common Stock, the Notes will become convertible into the
kind and amount of securities, cash or other assets which the holders of
the Notes would have owned immediately after the transaction if the
holders had converted the Notes immediately before the effective date of
the transaction.
(10) Events of Default
Subject to the provisions of Xxxxxxx 00, Xxxxx xxx Xxxxxxxx as regards
all Notes or each holder of a Note shall have the right to declare by
written notice to the Company the Notes held by such holder of a Note,
plus accrued interest, to be due and payable if any of the following
events of default ("Event of Default") shall occur:
(a) default in the payment of principal, or, for a period of 15 days,
in the payment of interest or any Additional Amounts as per
Section 6 on any Note; or
(b) default in the performance or observance in any material respect
of any covenant or agreement of the Company in the Notes or the
Agreement if such default continues for a period of 30 days after
written notice thereof has been given to the Company; or
(c) a default shall occur under any evidence of indebtedness for money
borrowed by the Company or under any instrument under which there
may be issued or by which there may be secured or guaranteed any
indebtedness for money borrowed
37
by the Company, which default involves the failure to pay when due
(after any applicable grace period), or results in the
acceleration of, indebtedness in an amount in excess of USD
500'000.-- without such indebtedness having been discharged or
such acceleration having been rescinded or annulled, within a
period of 30 days after notice thereof shall have been given to
the Company; or
(d) the entry of a decree or order in respect of the Company in an
involuntary case under any bankruptcy, insolvency or other similar
law, or appointing a receiver, liquidator, trustee or other
similar official of the Company or for any substantial part of its
property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(e) the Company shall commence a voluntary case under any bankruptcy,
insolvency or other similar law, or consent to the appointment of
or taking possession by a receiver, liquidator, trustee or other
similar official, of the Company or for any substantial part of
its property, or the making by it of a general assignment for the
benefit of creditors, or if it shall fail generally to pay its
debts as they become due, or shall take any corporate action in
furtherance of any of the foregoing; or
(f) if the Company shall merge or consolidate, or sell or convey all
or substantially all of its assets to, any other corporation,
unless (i) the Company is the surviving corporation, or (ii) the
surviving or transferee corporation expressly assumes all
obligations of the Company under the Notes by supplemental
agreement, confirmed by an opinion of U.S. counsel reasonably
satisfactory to Banca del Gottardo and the Company, or (iii) the
Company or the surviving or transferee corporation irrevocably
deposits in trust with Banca del Gottardo, money or U.S.
government obligations sufficient to pay principal and interest on
the Notes to maturity.
Upon the occurrence of an Event of Default, the Company shall promptly
give notice thereof to Banca del Gottardo which shall publish such
notice of default in accordance with Section 12 hereof. Banca del
Gottardo shall in relation to any Event of Default have no other
obligation than the publication of such Event of Default.
38
The principal amount of all Notes declared to be due and payable plus
accrued interest thereon shall become due and payable 15 days after
notice to the Company by Banca del Gottardo or by each holder of a Note
of such Event of Default; provided, however, that such declaration shall
be rescinded if, within 15 days of such notice, such Event of Default
shall have been remedied by payment, in the case of a payment default,
or in a manner reasonably satisfactory to Banca del Gottardo.
In the event that a Resolution or Extraordinary Resolution is passed at
a meeting of Noteholders held pursuant to Section 15, any actions taken
pursuant to this Section 10 by a Noteholder shall be subject to any
previously taken action pursuant to such Section 15.
(11) Prescription
In accordance with the Swiss Statute of Limitations the coupons will
become barred five years and the Notes ten years after their respective
due dates.
(12) Notices and Publications
All notices to the holders of Notes shall be deemed to have been duly
given if published in the Feuille Officielle Suisse du Commerce and in a
daily newspaper in Zurich and Lugano. All notices to the Company by any
holder of Notes shall be deemed to have been duly given if sent by
telecopy, cable or telex to the principal office of the Company.
(13) Listing of the Notes
No application will be made for the admission and quotation of the Notes
on any stock exchange.
(14) Replacement of Notes or Coupons
If any Note or coupon is defaced, mutilated, destroyed, stolen or lost,
it may be renewed or replaced at the head office of Banca del Gottardo
in Lugano, Switzerland on payment of such costs as may be incurred in
connection therewith and on presentation of such evidence and indemnity
as Banca del Gottardo and the Company may require. Defaced or mutilated
Notes or coupons must be surrendered before replacements may be issued.
39
(15) Noteholders' Meeting
a) A meeting of the Noteholders (hereinafter called a "Meeting") may
be convened by the Company or shall be convened by the Company if
so requested by Notes representing not less than 25% of the
aggregate principal amount of all Notes outstanding under the
Terms of the Notes (i) after an Event of Default shall have
occurred and be continuing to consider a waiver of an event of
default or any modification or amendment of the provisions of the
terms of the Notes, or (ii) a substitution of Banca del Gottardo.
The cost and expenses of a Meeting shall be borne by the Company.
b) Notice of the Meeting specifying the place, day and hour of the
Meeting shall be given at least 20 days prior to the proposed date
thereof (exclusive of the day on which the notice is given and the
day on which the Meeting is to be held) in accordance with Section
12 hereof. Such notice shall state generally the nature of the
business to be transacted at the Meeting thereby convened but
(except for an Extraordinary Resolution (as defined below)) it
shall not be necessary to specify in such notice the terms of any
resolution to be proposed.
c) The Meeting shall be held in Lugano and shall be chaired by a
representative of the Company or if such representative of the
Company shall not be present within 30 minutes after the time
appointed for the holding of the Meeting, the Noteholders present
shall choose one of their members to be chairman.
d) Resolutions shall only be passed if a quorum of two or more
persons holding 25% or more of the aggregate principal amount of
all Notes outstanding are present. The quorum at any Meeting for
passing an Extraordinary Resolution shall be two or more persons
holding two-thirds or more of the aggregate principal amount of
all Notes outstanding. Resolutions shall be passed if approved by
the absolute majority of votes cast save that an Extraordinary
Resolution shall be passed only if approved by three-fourths or
more of votes cast. Any resolution passed at a Meeting duly
convened and held in accordance with the terms of the Notes shall
be binding upon all the bondholders, whether present or not
present at such Meeting and whether or not voting, and upon all
the holders of coupons.
40
e) If within 30 minutes after the time appointed for any such Meeting
a quorum is not present, the Meeting shall, if convened upon the
request of Noteholders, be dissolved. In any other case, it shall
stand adjourned for such period being not less than 14 days nor
more than 28 days, and at such place as may be appointed by the
Company. At such adjourned Meeting, two or more persons present
holding 10% or more of the aggregate principal amount of all Notes
outstanding shall form a quorum, provided that if the business of
such adjourned Meeting includes consideration of a proposed
Extraordinary Resolution, the quorum shall be two or more persons
present holding one-third or more of the aggregate principal
amount of all Notes outstanding.
f) If within 30 minutes after the time appointed for any such
adjourned Meeting the respective quorum is not present the Meeting
shall stand further adjourned for such period being not less than
14 days nor more than 28 days, and at such place as may be
appointed by the Company and at such further adjourned Meeting two
or more persons present holding any Notes outstanding (whatever
the principal amount of the Notes so held by them) shall form a
quorum, provided that if the business of such further adjourned
Meeting includes consideration of a proposed Extraordinary
Resolution, the quorum shall be two or more persons present
holding one-third or more of the aggregate principal amount of all
Notes outstanding.
g) Notice of any adjourned Meeting or further adjourned Meeting shall
be given in the same manner as notice of an original Meeting and
such notice shall state, in the case of an adjourned Meeting, that
two or more persons present holding 10% (or in the case of a
Meeting the business of which includes consideration of a proposed
Extraordinary Resolution, one- third) or more of the aggregate
principal amount of all Notes for the time being outstanding will
form a quorum, or, in the case of a further adjourned Meeting,
that two or more persons present holding any Notes outstanding (or
in the case of a Meeting the business of which includes the
consideration of a proposed Extraordinary Resolution, two or more
persons present holding one-third or more of the aggregate
principal amount of all Notes outstanding), shall form a quorum.
h) The voting rights of the holders of Notes shall be determined
according to the principal amount of Notes held, each Note with a
principal amount of USD 5'000.-- giving the right to one vote.
Holders of the Coupons shall not have any voting rights. Notes
held by or on behalf of the Company shall have no voting rights
and
41
shall be disregarded for the purpose of this Section 15, save that
the Company shall be entitled to vote in respect of Notes held by
it for the benefit of and at the direction of an independent third
party. In the case of an equality of votes the chairman shall have
a casting vote in addition to the vote or votes (if any) to which
he may be entitled as a holder of Notes.
i) Any director or officer of the Company and its lawyers and any
other person authorized on its behalf by it may attend and speak
at any Meeting.
j) The Meeting shall have the following powers exercisable by
Extraordinary Resolution with the consent of the Company:
(i) extension of the date fixed for final maturity of the Notes;
(ii) reduction or cancellation of the principal payable on the
Notes;
(iii) reduction or cancellation of the rate or amount payable, or
extension of the date of payment, in respect of any
Coupons;
(iv) alteration of the majority required to pass an
Extraordinary Resolution; and
(v) waiver of any Event of Default.
k) Any reference in these Terms of the Notes to an "Extraordinary
Resolution" shall be construed as references to resolutions of the
Noteholders passed in accordance with the foregoing provisions of
this Section 15 with respect to any of the matters stated in
sub-section j) above.
(16) Applicable Law and Jurisdiction
The terms, conditions and form of the Notes and Coupons (the English
language version of which shall govern) shall be governed by and
construed in accordance with Swiss law.
Any action or proceedings against the Company relating to the Notes may
be brought and enforced in the ordinary courts of the Canton of Ticino,
venue being in the City of
42
Lugano, or, if such courts fail to grant jurisdiction in the ordinary
courts of the Canton of Basle-City, venue being in Basle, and the
Company hereby irrevocably submits to the jurisdiction of such courts in
respect of any such action or proceeding, with the right to appeal, as
provided by law, to the Swiss Federal Court in Lausanne, the judgment of
which shall be final. Solely for that purpose, the Company hereby elects
legal and special domicile at the office of Banca del Gottardo, Xxxxx
Xxxxxxx Xxxxxxxxx 0, 0000 Xxxxxx, Xxxxxxxxxxx. The Company covenants
that so long as any Notes are outstanding it will maintain an agent for
service of process in Switzerland. The aforementioned jurisdiction shall
also be valid for the cancellation and replacement of lost, stolen,
defaced, mutilated or destroyed Notes and coupons. Payment effected to a
holder of Notes who has been identified as the legitimate holder of a
Note or coupon by a final judgment of a Swiss court shall release the
Company from its payment obligations under such Note or coupon.
Any Noteholder shall also have the right to bring any legal action or
proceeding against the Company in respect of a Note or coupon and all
covenants contained therein in any state or federal court in the United
States of America which may have jurisdiction.
43
ANNEX B
(Form of Convertible Note)
No.
----------------
Any United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the limitations
provided in Sections 165(j) and 1287(a) of the Internal Revenue Code.
This Note has not been and will not be registered under the United States
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered, sold or delivered, directly or indirectly, in the United States or to,
or for the benefit of, any U.S. person (as such terms are defined in
Regulation S under the Securities Act).
SHOWSCAN ENTERTAINMENT INC.
(Incorporated in the State of Delaware)
USD 5'000.--
8% Notes due September 1, 1999
Convertible into freely transferable and non-restricted shares
of Common Stock of the Company
SHOWSCAN ENTERTAINMENT INC. (the "Company"), for value received, hereby
certifies that it owes to the bearer, payable upon presentation and surrender
hereof, the principal amount of 5'000.-- US Dollars (USD five thousand) on
September 1, 1999 or on such earlier date as such principal amount may become
due in accordance with the Terms of the Notes appearing on the reverse hereof,
and interest from September 1, 1995 on said principal amount at the rate of 8%
(eight per cent.) per annum, payable in cash, semi- annually in arrear on
September 1 and March 1 of each year and at maturity, beginning on March 1,
1996 for the
44
period from September 1, 1995 to March 1, 1996, until payment of said principal
amount has been made or duly provided for, but only, in the case of interest
due on or before maturity, upon presentation and surrender of the interest
coupons attached hereto as they shall severally become due, all in accordance
with the Terms of the Notes.
This Note is one of a duly authorized issue of 8% Notes due September 1, 1999
of the Company in the aggregate principal amount of 7'000'000.-- US Dollars
(the "Notes") issued pursuant to a Note Purchase, Paying and Conversion Agency
Agreement, dated as of August 14, 1995 (the "Agreement"), between the Company
of the first part and Banca del Gottardo of the second part. The Notes are
issued subject to and with the benefit of the Agreement.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed under
its corporate seal as of September 1, 1995.
SHOWSCAN ENTERTAINMENT INC.
By:
---------------------------
00
XXXXX X
(Xxxx xx Xxxxxx)
Xxx Xxxxxx Xxxxxx person who holds this obligation will be subject to
limitations under the United States income tax laws, including the limitations
provided in Sections 165 (j) and 1287 (a) of the Internal Revenue Code.
This Note has not been and will not be registered under the United States
Securities Act of 1933, as amended (the "Securities Act"), and may not be
offered, sold or delivered, directly or indirectly, in the United States or to,
or for the benefit of, any U.S. person (as such terms are defined in
Regulation S under the Securities Act).
Coupon No. 1-7
SHOWSCAN ENTERTAINMENT INC.
Culver City, California, U.S.A.:
US Dollars 5'000.--
8% Notes due September 1, 1999
Note of US Dollars 5'000.-- (five thousand)
Semi-annual interest due on March 1 / September 1, 1996/1999 payable in cash on
and subject to the terms set forth in the Terms of the Notes: US Dollars
200.--.
(Reverse Coupon)
This coupon is payable at the head office in Lugano of Banca del Gottardo.
46
ANNEX G
CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP
SHOWSCAN ENTERTAINMENT INC.
8% CONVERTIBLE NOTES DUE SEPTEMBER 1, 1999
The undersigned certifies that as to the portion of the Global Note hereby
presented for exchange into definitive Notes, the beneficial owners of the Notes
(i) are not United States persons or U.S. persons or (ii) are financial
institutions (within the meaning of United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States that are not United States
persons and that have purchased such Notes for purposes of resale during the
Restricted Period. Financial institutions that have purchased the Notes for
purposes of resale during the restricted period also hereby certify that they
have not acquired the Notes for purposes of resale directly or indirectly to a
United States person or U.S. person or to a person within the United States. The
undersigned certifies further that it is (i) the beneficial owner of the portion
of the Global Note tendered for exchange or (ii) a financial institution (within
the meaning of United States Treasury Regulation Section 1.165-12(c)(1)(v))
through which the beneficial owner directly or indirectly holds the portion of
the Global Note tendered.
For purposes of this certification, (i) the term "Restricted Period" means the
period beginning on the earlier of the first date that the Notes are offered or
September 1, 1995 (the "Settlement Date") and ending forty (40) days after the
Settlement Date, (ii) the term "United States" means the United States of
America (including the States and the District of Columbia), its possessions,
its territories and other areas subject to its jurisdiction, (iii) the term
"United States person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source and (iv) the term "U.S. person" has the meaning set
forth in Sections 230.901 through .904 of Title 17 of the United States Code of
Federal Regulations ("Regulation S").
--------------------------
Beneficial Owner or
Financial Institution
Name:
Address:
47
ANNEX H
Dated: September 1, 1995
To: Banca del Gottardo
Xxxxx Xxxxxxx Xxxxxxxxx 0
XX-0000 Xxxxxx/Xxxxxxxxxxx
Re: Showscan Entertainment Inc. (the "Company")
USD 7'000'000.-- 8% Convertible Notes of 1995
Due September 1, 1999 (the "Notes")
--------------------------------------------------------------------------------
"CERTIFICATE OF NO MATERIAL ADVERSE CHANGE"
Pursuant to the Note Purchase, Paying and Conversion Agency Agreement dated
August 14, 1995 (the "Agreement") between the Company and Banca del Gottardo
covering the issue of the Notes by the Company.
I, Xxxxxxx X. Xxxxx, being President and Chief Executive Officer of the Company
HEREBY CERTIFY on behalf of the Company that as to the date hereof:
a) save as disclosed in the Information Memorandum (as defined in the
Agreement) there has been no material adverse change in the consolidated
financial condition of the Company since June 30, 1995, and
b) no event has occurred rendering untrue or incorrect any of the warranties
set forth in Article V of the Agreement to a material extent, and
c) no event has occurred which constitutes or which with the giving of
notice or lapse of time would constitute one of the events referred to in
Section 8 or 10 of the Terms of the Notes.
Yours truly,
------------------
Xxxxxxx X. Xxxxx
President
48
ANNEX I
(Specimen Signature Form)
SHOWSCAN ENTERTAINMENT INC.
Culver City, CA, U.S.A.
US Dollars 7'000'000.-- 8 per cent. US Dollars
Convertible Notes
Due September 1, 1999
The specimen signature of Xx. Xxxxxxx X. Xxxxx, the President and Chief
Executive Officer to be used for the printing of the above-captioned Notes and
coupons is as follows:
--------------------
--------------------
--------------------
September 1, 1995
