0000950148-95-000604.txt : 19950920
0000950148-95-000604.hdr.sgml : 19950920
ACCESSION NUMBER: 0000950148-95-000604
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 8
CONFORMED PERIOD OF REPORT: 19950901
ITEM INFORMATION: Other events
ITEM INFORMATION: Financial statements and exhibits
FILED AS OF DATE: 19950919
SROS: NASD
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: SHOWSCAN ENTERTAINMENT INC
CENTRAL INDEX KEY: 0000812882
STANDARD INDUSTRIAL CLASSIFICATION: PHOTOGRAPHIC EQUIPMENT & SUPPLIES [3861]
IRS NUMBER: 953940004
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0331
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-09710
FILM NUMBER: 95574732
BUSINESS ADDRESS:
STREET 1: 3939 LANDMARK ST
CITY: CULVER CITY
STATE: CA
ZIP: 90232
BUSINESS PHONE: 3105580150
MAIL ADDRESS:
STREET 1: 3939 LANDMARK STREET
CITY: CULVER CITY
STATE: CA
ZIP: 902322315
FORMER COMPANY:
FORMER CONFORMED NAME: SHOWSCAN CORP
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: SHOWSCAN FILM CORP
DATE OF NAME CHANGE: 19901116
8-K
1
FORM 8-K
1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) September 1, 1995
SHOWSCAN ENTERTAINMENT INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-15939 95-3940004
(Commission File Number) (I.R.S. Employer Identification No.)
3939 LANDMARK STREET,
CULVER CITY, CALIFORNIA 90232
(Address of Principal Executive Offices) (Zip Code)
(310) 558-0150
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
2
ITEM 5. OTHER EVENTS.
On September 1, 1995, Showscan Entertainment Inc. ("Registrant")
completed the private placement of $7,000,000 aggregate principal amount of its
8% Convertible Notes due September 1, 1999 (the "Notes"). The private
placement was effected through Banca del Gottardo, a corporation organized
under the laws of Switzerland ("Gottardo"). The Notes are convertible at any
time on or after December 1, 1995 and before August 20, 1999 into shares of
Registrant's common stock, $.001 par value per share (the "Common Stock"), at
an initial conversion rate (subject to certain anti-dilution adjustments) of
173.913 shares of Common Stock for each $1,000 principal amount of Notes
(initially equivalent to a conversion price of $5.75 per share of Common
Stock). The Notes are secured by a lien on substantially all of the assets of
Registrant.
Interest on the Notes is payable semi-annually in arrears on each
March 1 and September 1 until maturity. Gottardo shall serve as Paying Agent
and as Conversion Agent for the holders of the Notes. Registrant may redeem
the Notes (a) at any time at 108% of the principal amount thereof if less than
40% of the Notes remain outstanding on such date, and (b) at any time after
September 1, 1996 at 110% of the principal amount thereof if the average daily
closing price per share of the Common Stock for the thirty consecutive trading
days preceding the redemption notice is at least 200% of the then conversion
price. The terms of the Notes give Gottardo the right to appoint one director
to Registrant's Board of Directors and the right to approve certain future debt
and equity issuances.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
The Exhibits listed below are filed as part of this Report.
Exhibit No. Description of Exhibit
----------- ----------------------
4.1 Note Purchase, Paying and Conversion
Agency Agreement, dated as of August 14, 1995,
by and between Registrant and Gottardo
(excluding the exhibits thereto that are
included elsewhere in this Report).
4.2 Global Note, dated September 1, 1995, made by
Registrant in favor of Gottardo.
4.3 Agency Agreement, dated as of August 14, 1995,
by and between Registrant and Gottardo.
2
3
Exhibit No. Description of Exhibit
----------- ----------------------
4.4 Pledge/Security Agreement, dated as of
September 1, 1995, by and between Registrant
and Gottardo.
4.5 Amendment to Pledge/Security Agreement, dated
as of September 1, 1995, by and between
Registrant and Gottardo.
99.1 Press Release, dated August 16, 1995,
announcing the private placement.
99.2 Press Release, dated September 5, 1995,
announcing the conclusion of the private
placement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SHOWSCAN ENTERTAINMENT INC.
Date: September 19, 1995 By: /s/ W. TUCKER LEMON
-------------------------------
W. Tucker Lemon
Vice President, General Counsel
and Secretary
3
4
EXHIBIT INDEX
Exhibit Number Description Page Number
-------------- ----------- -----------
4.1 Note Purchase, Paying and Conversion Agency Agreement,
dated as of August 14, 1995, by and between Registrant
and Gottardo (excluding the exhibits thereto that are
included elsewhere in this Report).
4.2 Global Note, dated September 1, 1995, made by
Registrant in favor of Gottardo.
4.3 Agency Agreement, dated as of August 14, 1995, by and
between Registrant and Gottardo.
4.4 Pledge/Security Agreement, dated as of September 1,
1995, by and between Registrant and Gottardo.
4.5 Amendment to Pledge/Security Agreement, dated as of
September 1, 1995, by and between Registrant and
Gottardo.
99.1 Press Release, dated August 16, 1995, announcing the
private placement.
99.2 Press Release, dated September 5, 1995, announcing the
conclusion of the private placement.
4
EX-4.1
2
EXHIBIT 4.1
1
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
2
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
3
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 3939 Landmark Street, Culver City, California 90232-2315,
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 Viale Stefano
Franscini 8, 6901 Lugano, Switzerland,
(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.
4
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, Viale Stefano Franscini 8, 6901 Lugano, Switzerland.
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.
5
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
6
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.
7
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
8
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
9
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, 1995 Lugano 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.
10
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
11
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
12
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;
14
(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. Latham & Watkins 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.
15
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.
16
(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.
17
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.
18
(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 Banca del Gottardo
19
a) 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.
Viale Stefano Franscini 8 3939 Landmark Street
6901 Lugano, Switzerland Culver City, California 90232-2315
Attn: Capital Market U.S.A.
Department Attn: William C. Soady
President and Chief Executive
Officer
Telex-No.: 841 052
Facsimile: 0114191 281 843 Facsimile: (310) 280-0476
23
copies to:
W. Tucker Lemon
Vice President and General Counsel
Facsimile: (310) 559-79 84
Dennis Pope
Executive Vice President and Chief
Financial Officer
Facsimile: (310) 280-04 76
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 Culver City effective as of August 14, 1995
SHOWSCAN ENTERTAINMENT INC.
By: /s/ William C. Soady
-----------------------------
BANCA DEL GOTTARDO
By: /s/ Fabio Testori
-----------------------------
/s/ Francesco Bolgiani
-----------------------------
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 Section 15, Banca del Gottardo 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, Viale
Stefano Franscini 8, 6901 Lugano, Switzerland. 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:
---------------------------
45
ANNEX C
(Form of Coupon)
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).
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
Viale Stefano Franscini 8
CH-6901 Lugano/Switzerland
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, William C. Soady, 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,
------------------
William C. Soady
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 Mr. William C. Soady, 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
EX-4.2
3
EXHIBIT 4.2
1
EXHIBIT 4.2
GLOBAL NOTE
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 Global 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.
USD 7'000'000.--
8% Notes due September 1, 1999
Convertible into freely transferable and non-restricted shares
of Common Stock of the Company
This Global Note without interest coupons is a Global Note in respect of a duly
authorized issue of 8% Notes due September 1, 1999 (the "Notes") of Showscan
Entertainment Inc. (the "Company"), a corporation duly organized and existing
under the laws of the State of Delaware, in the principal amount of seven
million US Dollars and issued pursuant to a Note Purchase, Paying and
Conversion Agency Agreement (the "Agreement") dated as of August 14, 1995
between the Company of the first part and Banca del Gottardo of the second
part.
Subject to the provisions of the Note Purchase, Paying and Conversion Agency
Agreement, Showscan Entertainment Inc., for value received, hereby promises to
pay to the holder of this Global Note, payable upon presentation and surrender
hereof, the amount of US Dollar 7'000'000.-- (USD seven million) and interest
thereon at 8% per annum, in accordance with the Terms of the Notes set forth in
Annex A of the Agreement.
2
In accordance with Section 1 of the Terms, this Global Note may be exchanged,
as a whole or in part, for definitive Notes, in bearer form in denominations of
USD 5'000.--, with interest 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 this Global Note or interest
herein may be transferred into the United States or to a U.S. person. Such
exchange shall be made upon certification, in the form set forth in Annex G of
the Agreement and appended to this Global Note, that the beneficial owners of
the Notes are not United States persons or U.S. persons or are financial
institutions (as defined in the United States Treasury Regulation Section
1.165-12(c)(1)(v)) located outside the United States 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 a U.S. 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 interest payments or other payments in respect of the
Notes will be made.
The Terms of the Notes set forth in Annex A of the Agreement are hereby
incorporated by reference herein mutatis mutandis and, except as otherwise
provided herein, shall be binding on the Company and the holder hereof as if
fully set forth herein. Except as otherwise provided herein, the Company shall
make all payments hereunder as and when provided in the Terms of the Notes and
shall be bound by all its covenants set forth therein.
This Global Note shall be governed by and construed in accordance with the laws
of Switzerland.
IN WITNESS WHEREOF, the Company has caused this Global Note to be duly executed
as of September 1, 1995.
SHOWSCAN ENTERTAINMENT INC.
By: /s/ William C. Soady
---------------------------------
This Global Note shall not become valid for any purpose until this Global Note
has been authenticated by any two officers of Banca del Gottardo.
By: By:
------------------------------ ---------------------------------
Authorized Officer Authorized Officer
EX-4.3
4
EXHIBIT 4.3
1
EXHIBIT 4.3
SHOWSCAN ENTERTAINMENT INC.
CULVER CITY, CALIFORNIA, U.S.A.
US$ 7'000'000.--
8 % Convertible Notes
Due September 1, 1999
-------------------------------
AGENCY AGREEMENT
AUGUST 14, 1995
2
AGENCY AGREEMENT
This agreement is entered into effective as of August 14, 1995, between
SHOWSCAN ENTERTAINMENT INC., a Delaware corporation with principal offices at
3939 Landmark Street, Culver City , California 90232-2315, United States of
America (the "Company") of the first part and BANCA DEL GOTTARDO, a Swiss
corporation with principal offices at Viale Stefano Franscini 8, 6901 Lugano,
Switzerland ("Banca del Gottardo") of the second part.
As authorized by its Board of Directors on August 11, 1995 and pursuant to a
Note Purchase, Paying and Conversion Agency Agreement dated August 14, 1995
(the "Agreement"), the Company proposes to make an offer on the Swiss capital
market for the sale of its convertible notes (the "Convertible Notes"). The
Convertible Notes will be convertible into freely transferable and
non-restricted shares (the "Shares") of the Common Stock of the Company (the
"Common Stock"), on the terms and conditions provided hereafter. The Board of
Directors of the Company has approved this agreement and has authorized the
conversion of the Convertible Notes into the Common Stock of the Company on the
terms and conditions hereof.
ARTICLE 1 CONVERSION AGENT
1.1. The Company hereby appoints Banca del Gottardo, acting
through its specified office in Switzerland, as sole
Conversion Agent (the "Conversion Agent") for the
conversion of Notes or coupons into Shares in accordance
with the provisions for conversion set forth in Exhibit 1
hereto (the "Conversion Provisions") which constitutes an
integral part of this agreement.
1.2. So long as any Notes are outstanding, the Company shall
maintain a stock transfer agent (the "Stock Transfer
Agent") or shall itself perform the functions required of
such agent under this agreement.
3
1.3. The appointment of the Conversion Agent hereunder shall
continue in effect until the conversion right in respect of
the Convertible Notes shall have terminated. So long as
Banca del Gottardo satisfactorily performs its obligations
hereunder the Company shall not without the consent of
Banca del Gottardo which consent shall not be unreasonably
withheld appoint any other Conversion Agent or pay any
other bank any commission or remuneration for the
conversion of the Convertible Notes or coupons.
ARTICLE 2 FEES
2.1. In consideration for the services rendered by the
Conversion Agent in connection with the conversion of the
Convertible Notes and coupons, the Company undertakes to
pay upon demand to the Conversion Agent in US Dollars the
reasonable out-of-pocket expenses (e.g., telex, cable,
postage, telephone, legal and insurance expenses, if any)
incurred by the Conversion Agent in connection with its
services hereunder. All conversions must meet the
requirements of Article 1 (Conversion Right) of Exhibit 1
to this Annex E.
2.2. Neither Banca del Gottardo nor the Noteholders shall have
any obligation to pay to the Stock Transfer Agent any
commission, fees, costs or charges in connection with the
conversion of Convertible Notes or coupons and the making
available of the respective Shares as provided hereafter.
ARTICLE 3 INDEMNIFICATION
The Company will indemnify and hold harmless the Conversion Agent
against any losses, liabilities, costs, claims, actions or demands
which it may incur or which may be made against it as a result of
or in connection with its appointment or the exercise of its
powers and duties under this Agreement other than those based upon
or arising out of the negligence or wilful misconduct on the part
of the Conversion Agent or any of its employees or agents.
4
ARTICLE 4 CONVERSION OF CONVERTIBLE NOTES AND COUPONS
Each Convertible Note and all unmatured coupons attached thereto,
submitted for conversion to the Conversion Agent (a "Converted
Note") shall be imprinted or stamped by the Conversion Agent with
a legend to the effect that such Convertible Note or coupon has
been converted. All Converted Notes and coupons shall be held by
Banca del Gottardo for the account of the Company. Banca del
Gottardo shall maintain a record of Convertible Notes and coupons
converted.
ARTICLE 5 NOTICES
All notices required under this Agreement shall be deemed to have
been duly given if sent by cable, telex or facsimile transmission
(confirmed in writing, sent by registered airmail) to the
following addresses:
If to the Company:
SHOWSCAN ENTERTAINMENT INC.
3939 Landmark Street
Culver City
California 90232-2315, U.S.A.
Attention: William C. Soady
President and Chief Executive Officer
Facsimile: (310) 280-04 76
copies to:
W. Tucker Lemon
Vice President and General Counsel
Facsimile: (310) 559-79 84
Dennis Pope
Executive Vice President and Chief Financial Officer
Facsimile: (310) 280-04 76
If to the Conversion Agent:
BANCA DEL GOTTARDO
Viale Stefano Franscini 8
6901 Lugano, Switzerland
Attention: New Issue Department
Telex: 841 052
Facsimile: 0114191 281 843
5
or to such other address as at the party receiving the notice
shall have notified to the other party in writing. Such cable,
telex or facsimile transmission notice shall be deemed to have
been duly given at the time of dispatch. Any party receiving a
notice by cable, telex or facsimile transmission will be protected
by relying upon the cabled, telexed or transmitted notice even
though such notice is not subsequently confirmed in writing.
ARTICLE 6 GOVERNING LAW
6.1. This agreement shall be governed by and construed in
accordance with Swiss law, except as to matters regarding
conversion of the Notes into Common Stock of the Company,
which shall be governed by and construed in accordance with
the laws of Delaware. Any action or proceedings against the
Company relating to this agreement or the Convertible Notes
or coupons may be brought and enforced in the ordinary
courts of the Canton of Ticino, venue being in the City of
Lugano, and the Company hereby irrevocably submits to 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 and for the purpose of execution in
Switzerland, the Company hereby elects legal and special
domicile at the office of Banca del Gottardo, Viale Stefano
Franscini 8, 6901 Lugano, Switzerland. Banca del Gottardo
shall notify the Company promptly upon receipt of any
notice by it in its capacity as the Company's agent for
service of process.
6.2. The Conversion Agent shall also have the right to bring any
legal action or proceeding hereunder against the Company in
any state or federal court in the United States of America
which may have jurisdiction.
ARTICLE 7 COUNTERPARTS
This agreement may be executed in any number of counterparts, each
of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
6
IN WITNESS WHEREOF, the Company and Banca del Gottardo have caused
this agreement to be signed and acknowledged by their officers
authorized to do so, as of August 14, 1995.
SHOWSCAN ENTERTAINMENT INC.
By: /s/ William C. Soady
---------------------------------
BANCA DEL GOTTARDO
By: /s/ Fabio Testori
---------------------------------
/s/ Francesco Bolgiani
---------------------------------
7
EXHIBIT 1 TO ANNEX E
CONVERSION PROVISIONS
The following are the provisions for the conversion (the "Conversion
Provisions") of the USD 7'000'000.-- 8% Convertible Notes due September 1, 1999
of Showscan Entertainment Inc., Culver City, CA (the "Company") into freely
transferable and non-restricted shares of the common stock of the Company.
Unless otherwise defined herein, the terms used herein have the meanings
ascribed to them in the Note Purchase, Paying and Conversion Agency Agreement
and the Agency Agreement (the "Agency Agreement") dated as of August 14, 1995
between the Company and Banca del Gottardo .
--------------------------------------------------------------------------------
ARTICLE 1
Conversion Right
1.1. Subject to and upon compliance with these Conversion Provisions, the
holder of 10 or more Notes (a "Noteholder") will have the right at any
time on and after December 1, 1995 up to the close of business of banks
in Lugano on August 20, 1999, or, in case the Notes are called for
redemption in accordance with Section 4 of the Terms of the Notes, then
prior to the close of business of banks in Lugano on the earlier of
August 20, 1999 and the fifth business day preceding the date fixed for
redemption, but in no event thereafter, to convert such Note 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 an exemption from the registration
requirements of such laws) shares of common stock which are duly
registered under the 1933 Securities Act or exempt from the registration
requirements thereof, with par value USD .001 per share (such presently
authorized capital stock and any other stock into which such presently
authorized common stock may hereafter be changed, the "Common Stock"),
of the Company, calculated as to each conversion to the greatest number
of full Shares, disregarding fractions, at the price of initially USD
5.75 for each Share, such price being subject to adjustment in certain
instances as provided in Article 2 hereafter
8
(as so adjusted from time to time, the "Conversion Price"). Fractions
of a share will not be issued on conversion; provided, however, that if
a Noteholder at any one time delivers more than 10 Notes for conversion,
the number of Shares issued shall be calculated on the basis of the
aggregate principal amount of the Notes so delivered. A cash adjustment
shall be paid in respect of any fractional Share which would otherwise
be issuable upon conversion of any Note in an amount in U.S. Dollars
based upon the market price of the Common Stock on the last trading day
prior to the date of conversion. Cash adjustments for fractional shares
will not be made for amounts less than one U.S. Dollar.
1.2. In order to exercise the right of conversion, a Noteholder shall (a)
deliver the Notes to be converted during normal business hours,
accompanied by the conversion notice in the form obtainable from the
Conversion Agent (the "Conversion Notice") to the Conversion Agent and
(b) pay to the Conversion Agent any stamp or other taxes that may be
payable in Switzerland on such conversion. Each Note delivered for
conversion must be delivered with all unmatured coupons attached and/or
with an amount equal to the face value of any missing, unmatured
coupons. Such missing, unmatured coupons shall be paid upon subsequent
presentation thereof, provided they shall not have become barred
pursuant to Section 11 of the Terms of the Notes.
1.3. The Conversion Agent undertakes to:
(a) make available to Noteholders the Conversion Notice in such form
as may from time to time be agreed by the Company and the
Conversion Agent;
(b) upon receipt of a Conversion Notice from a Noteholder:
(i) verify that (A) the Conversion Notice has been duly
completed and signed by or on behalf of the Noteholder
named therein, (B) the Conversion Notice is accompanied by
all Notes to which it relates and all unmatured coupons
appertaining to such Notes and/or an amount equal to the
face value of any missing unmatured coupons and (C) the
amount of any stamp or other taxes payable by the
Noteholder has been paid; and
(ii) endorse the Conversion Notice;
(c) imprint or stamp all Notes submitted to it for conversion, and all
unmatured coupons attached thereto, in accordance with Article 4
of the Agency Agreement
9
promptly upon satisfaction by the Noteholder of all conditions
precedent to the conversion; and
(d) dispatch within two business days after satisfaction by the
Noteholder of all conditions precedent to the conversion to the
relevant tax authorities, payment in respect of any stamp or other
taxes payable on the conversion, in accordance with the laws of
Switzerland.
1.4. The Conversion Agent shall promptly, upon the later of the date of
receipt of the Conversion Notice and the satisfaction of all other
conditions precedent to the conversion stated above, endorse the
Conversion Notice and notify the Company and the Stock Transfer Agent of
the Company (at present Continental Stock Transfer and Trust Company, 2
Broadway, New York, NY 10004), by telex or cable of (a) the principal
amount and serial numbers of the Notes deposited for conversion, (b) the
number of Shares issuable upon conversion of such Notes and (c) the name
and address of each person (the "Shareholder") to whom such Shares are
to be issued. Such conversion shall become effective at the close of
business on the date (the "Conversion Date") on which the Company shall
have received at its principal executive offices, during normal business
hours, from the Conversion Agent a telecopy, telex or cable
notification. If such telecopy, telex or cable notification is received
after the close of business on such date, the Conversion Date will be
the immediately following business day. At such Conversion Date the
rights of the holder (other than the Company) of a Note shall cease and
the Shareholder shall be deemed to have become the holder of such
Shares.
1.5. As soon as practicable on or after the Conversion Date, but in no event
later than seven business days thereafter, the Company shall (a) cause
the Shareholder to be registered as the owner of the Shares issued upon
conversion of such Shareholder's Notes in the register of Shareholders
of the Company, (b) make available, or cause the Stock Transfer Agent to
issue, a certificate or certificates for such Shares registered in the
name of the Shareholder (together with any other securities, properties
or cash deliverable at the Conversion Date) and (c) at the request of
the Shareholder, cause the Stock Transfer Agent to forward, at the risk
and expense and for account of such Shareholder, such certificate or
certificates (together with any other securities, properties or cash
deliverable upon conversion) to such person or persons at the address
specified in the Conversion Notice, together with such assignments and
other documents, if any, as may be required by law to effect the
transfer thereof with full benefits under the laws of the applicable
jurisdiction of the United States of America.
10
1.6. The Company covenants that:
(a) so long as any Notes are outstanding, it shall keep available
authorized shares of Common Stock sufficient to permit all Notes
outstanding and unconverted to be converted in accordance with
these Conversion Provisions;
(b) all shares of Common Stock delivered upon conversion of Notes as
provided herein will be validly issued, fully-paid and
non-assessable;
(c) it shall file and use its best efforts 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.
1.7. Shares issued upon conversion and registered in the name of the
Shareholder shall be freely transferable and non-restricted and shall
be entitled to receive all dividends paid on such Common Stock on or
after the Conversion Date, except for dividends payable to Shareholders
registered as such as of a record date occurring prior to the
Conversion Date. No payments shall be made upon conversion for interest
accrued since the Coupon Due Date next preceding the Conversion Date.
1.8. Notes may be presented for conversion only to an office of the
Conversion Agent outside the United States. The Company and the
Conversion Agent will deliver Common Stock or other consideration
received upon conversion only to an account or address outside the
United States.
ARTICLE 2
The Conversion Price shall be subject to adjustments in the following
circumstances occurring after August 14, 1995:
2.1. In case the Company shall hereafter (i) pay a dividend on its Common
Stock in shares of its Common Stock or make a distribution in shares of
its Common Stock with respect to its outstanding Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater number
of shares of Common Stock or (iii) combine its outstanding shares
11
of Common Stock into a smaller number of shares of Common Stock, the
Conversion Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision or combination
shall be determined by multiplying the Conversion Price in effect
immediately prior to such record date or effective date by a fraction,
the numerator of which shall be the total number of outstanding shares
of Common Stock immediately prior to such record date or effective date,
and the denominator of which shall be the total number of outstanding
Common Stock immediately following such record date or effective date.
Such adjustments made pursuant to this Section 2.1 shall be made
successively whenever any event listed above shall occur.
2.2. In computing an adjustment in the Conversion Price pursuant to Section
2.1 above, shares of Common Stock not outstanding at the time of such
computation shall be deemed outstanding to the extent that the
Conversion Price has been previously adjusted to reflect the issuance of
such shares of Common Stock or rights, options or warrants to subscribe
for or purchase such shares of Common Stock.
2.3. Except as stated in Section 2.1 above, the Conversion Price shall not be
adjusted for the issuance of shares of Common Stock of the Company
whether or not at less than the Current Market Price or the current
Conversion Price, whether for cash or property.
2.4. No adjustment shall be made to the Conversion Price unless such
adjustment would result in any increase or decrease of at least USD 0.05
in the Conversion Price then in effect; provided, however, that any
adjustments which by reason of this Section 2.4 are not required to be
made will by carried forward and taken into account in any subsequent
adjustment.
2.5. All calculations under these Conversion Provisions shall be made to the
nearest one U.S. cent, with 0.5 U.S. cent or more to be considered a
full U.S. cent, or to the nearest one-hundredth of a share, as the case
may be.
2.6. Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly send to Banca del Gottardo a certificate of the
Company setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment
and the date on which it becomes effective. The contents of any
certificate required by this Section 2.9 may be transmitted by telecopy,
telex or cable,
12
but shall be confirmed in writing as hereinbefore provided. Banca del
Gottardo may rely upon such certificate (or such transmission by
telecopy, cable or telex, whether or not so confirmed) as conclusive
evidence of the correctness of the adjustment referred to therein.
2.7. Notwithstanding the foregoing, no adjustment shall be made to the extent
that it would reduce the Conversion Price to less than the par value of
the shares of Common Stock (USD .001 at the date hereof).
2.8. In any case in which this Article shall require that an adjustment be
made retroactively immediately following a record date, the Company
shall as promptly as practicable issue to the holder of any Note
converted after such record date the shares of Common Stock and other
common stock of the Company issuable on such conversion in excess of the
shares of Common Stock and other common stock of the Company issuable on
such conversion on the basis of the Conversion Price prior to such
adjustment.
2.9. Notwithstanding the foregoing provisions of this Article 2, no
adjustment shall be made to the Conversion Price with respect to any
securities outstanding as of August 14, 1995 or the Company's existing
stockholder rights plan as of August 14, 1995.
ARTICLE 3
3.1. In the event that:
(a) the Company shall authorize the issuance to all holders of shares
of Common Stock of rights, options or warrants to subscribe for or
purchase any shares of Common Stock or any securities convertible
into shares of Common Stock, or of any other subscription rights
or warrants;
(b) the Company shall authorize the distribution to all holders of
shares of Common Stock of evidences of its indebtedness or assets
(other than cash dividends or cash distributions payable out of
consolidated earnings or earned surplus or dividends payable in
Common Stock);
(c) there shall be any consolidation or merger to which the Company is
a party and for which approval of any stockholders of the Company
is required, or there shall be
13
the conveyance or transfer of all or substantially all of the
properties and assets of the Company, or there shall be any
reorganization or reclassification or change of outstanding Common
Stock issuable upon the exercise of conversion rights hereunder
(other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a
subdivision or combination);
(d) there shall be voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or
(e) the Company proposes to take any action (other than the actions of
the type described in Section 2.1) which would require and
adjustment of the Conversion Price pursuant to Article 2;
then the Company shall, at least 10 days prior to the applicable record
date, provide written notice of such event to Banca del Gottardo stating
(x) the record date in the United States of America as of which the
holders of record of shares of Common Stock to be entitled to receive
any such rights, warrants, or distributions are to be determined, or (y)
the date in the United States of America on which such reorganization,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding-up is expected to become effective, and the date as of which it
is expected that holders of record of the shares of Common Stock shall
be entitled to vote upon, and, if approved, to exchange their shares of
Common Stock for securities or other property, if any, deliverable upon
such reorganization, reclassification, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding-up.
3.2. If the event described in the notice given pursuant to Section 3.1. will
result in an adjustment of the Conversion Price pursuant to Article 2,
such notice shall also state the new Conversion Price unless the
Conversion Price cannot be calculated at the time such notice is given.
3.3. The failure to give or publish the notice required by this Article 3 or
any defect therein shall not affect the legality or validity of the
proceedings referred to in Section 3.1.
14
ARTICLE 4
So long as any of the Convertible Notes remain convertible, the Company shall
not take any action which would result in an adjustment of the Conversion Price
pursuant to Article 2 if, after giving effect thereto, the Conversion Price
would be decreased to such an extent that the Shares could not be legally
issued, under applicable law of the jurisdiction of incorporation of the Company
then in effect, at such decreased Conversion Price as fully-paid and
non-assessable Shares.
ARTICLE 5
The Conversion Agent shall not at any time be responsible to any Noteholder for
determining whether any facts exist (a) which may require any adjustment of the
Conversion Price, (b) with respect to the nature or extent of any such
adjustment when made, (c) with respect to the method employed, or herein or in
any supplemental agreement (if any) provided to be employed in making any such
adjustment. The Conversion Agent makes no representation as to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities, property or cash, which may at any time be issued or delivered upon
the conversion of any Convertible Note. The Conversion Agent shall not be
responsible for any failure of the Company to make any cash payment or to issue,
transfer or deliver any shares of stock or stock certificates or other
securities or property upon the surrender of any Note for the purpose of
conversion or to comply with any of the covenants of the Company contained in
these Conversion Provisions.
ARTICLE 6
6.1. In case of any consolidation of the Company with, or merger of the
Company into, any other corporation (other than a consolidation or
merger in which the Company is the continuing corporation), or in the
case of any sale or transfer of all of the assets of the Company as an
entirety or substantially as an entirety, the corporation formed by such
consolidation or the corporation into which the Company shall have been
merged or the corporation which shall have acquired such assets, as the
case may be, shall execute with Banca del Gottardo a supplemental
agreement which shall (a) provide that the holder of each Convertible
Note then outstanding shall have the right to receive thereafter, during
the period such Convertible Note shall be convertible as specified in
Article 2, upon conversion of such Convertible Note, in lieu of each
share of Common Stock deliverable
15
on such conversion immediately prior to such event, only the kind and
amount of shares and/or other securities and/or property and/or cash
which are receivable, or which, but for the failure to distribute to
holders of Common Stock all or substantially all of the consideration
receivable on such sale or transfer of assets, would be receivable upon
such consolidation, merger, sale or transfer by a holder of one share of
Common Stock of the Company and (b) set forth the Conversion Price for
the shares and/or other securities and/or property and/or cash so
issuable, which shall be an amount equal to the Conversion Price per
share of Common Stock of the Company immediately prior to such event.
6.2. In case of any reclassification or change of the shares of Common Stock
issuable upon conversion of the Notes (other than a change in par value,
or from par value to no par value, or as a result of a subdivision or
combination) or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing
corporation and in which the holders of the shares of Common Stock
(including for this purpose shares reflecting a change in par value or
from par value to no par value or as a result of a subdivision or
combination of the shares of Common Stock), the Company shall execute
with Banca del Gottardo a supplemental agreement which shall (a) provide
that the holder of each Convertible Note then outstanding shall receive,
upon conversion thereof, in lieu of each share of Common Stock of the
Company deliverable upon such conversion immediately prior to such
event, the kind and amount of shares and/or other securities and/or
property and/or cash receivable upon such reclassification, change,
consolidation or merger by a holder of one share of Common Stock, and
(b) set forth the Conversion Price for the shares and/or other
securities and/or property and/or cash so issuable, which shall be an
amount equal to the Conversion Price per share of Common Stock
immediately prior to such event.
6.3. If, as a result of Section 6.1 or Section 6.2, the holder of any
Convertible Note thereafter surrendered for conversion shall become
entitled to receive shares of two or more classes of common stock of the
Company, the Board of Directors (whose determination shall be
conclusive) shall determine the allocation of the Conversion Price
between or among shares of such classes of capital stock. Any
supplemental agreement executed pursuant to Sections 6.1 and 6.2 shall
provide for adjustments which shall be as nearly equivalent as
practicable to the adjustments provided for herein, and, where
appropriate, state the Conversion Price in terms of one full share of
Common Stock or one full share of common stock of any successor or
purchasing corporation. The terms of this Article 6
16
also shall apply to successive consolidations, merger, sales or
transfers. In the event that at any time as a result of an adjustment
made pursuant to this Article 6 the holder of any Note thereafter
surrendered for conversion shall become entitled to receive any shares
or securities other than shares of Common Stock, thereafter the prices
or price of such other shares or other securities so receivable on
conversion of any Convertible Note shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in
Article 2, and the provisions of Article 2 with respect to the Common
Stock shall apply on like terms to any such other shares.
6.4. The Conversion Agent shall have no responsibility for any consolidation,
merger, sale or transfer, the form or substance of any plan relating
thereto or the consequences thereof to any Noteholder.
The Conversion Agent shall have no responsibility to determine the
correctness of any provision contained in any supplemental agreement
relating either to the kind or amount of shares of stock or securities
or property receivable by Noteholders upon the conversion of their
Convertible Notes after any such consolidation, merger, sale or
transfer, or to any adjustment made with respect thereto. The Conversion
Agent may, at its option, receive an opinion of counsel for the Company
as conclusive evidence that any such supplemental agreement complies
with the provisions of this Article.
ARTICLE 7
CONVERSION AGENT:
BANCA DEL GOTTARDO
Viale Stefano Franscini 8, 6901 Lugano
EX-4.4
5
EXHIBIT 4.4
1
EXHIBIT 4.4
SHOWSCAN ENTERTAINMENT INC.
CULVER CITY, CALIFORNIA, U.S.A.
USD 7'000'000.--
8% CONVERTIBLE NOTES
DUE SEPTEMBER 1, 1999
-------------------------------
PLEDGE/SECURITY AGREEMENT
SEPTEMBER 1, 1995
2
PLEDGE/SECURITY AGREEMENT
on all existing assets of
Showscan Entertainment Inc. as per September 1, 1995
--------------------------------------------------------------------------------
THIS PLEDGE/SECURITY AGREEMENT ("Pledge Agreement") is made and entered into
effective September 1, 1995, by and among Showscan Entertainment Inc., a
Delaware corporation ("Pledgor") and Banca del Gottardo ("Bank"), with respect
to the following facts:
A. Pledgor and Bank are parties to that certain Note Purchase, Paying and
Conversion Agency Agreement dated as of August 14, 1995 ("Agreement").
B. Pursuant to the Agreement, Pledgor has issued to Bank USD 7'000'000.--
8% Convertible Notes of 1995 due September 1, 1999 ("Notes").
C. The Pledgor has undertaken to grant Bank a security interest with respect
to all of the existing tangible and intangible properties assets and rights
of the Pledgor, for the purpose of providing collateral security in respect
of Notes issued by Pledgor under the Agreement.
Pledgor represents and warrants that as of the date hereof the Collateral
as defined herein is unencumbered, i.e. not pledged or otherwise subject to
any lien (other than (i) liens incurred in the ordinary course of business
as, for example, installment payment purchases of equipment or other assets
used in Pledgor's business and (ii) liens described on Schedule A) granted
to third parties.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants hereinafter contained, the parties hereto agree as follows:
1. Assignment of Collateral. As security for the due and punctual payment and
performance of all of the covenants and obligations of Pledgor under the
Notes and the Agreement, Pledgor hereby assigns and pledges to Bank and
hereby grants a security interest in favor of Bank in all of Pledgor's
right, title and interest in and to all of the following, whether now or
hereafter existing or in which Pledgor now has or hereafter acquires an
interest
3
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 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 Pledgor in and to the capital
stock of any subsidiary and proceeds thereof and (ii) any right, title and
interest of Pledgor in and to all films, motion pictures or videos developed
(or in development), produced, distributed or obtained for distribution by
Pledgor (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 Pledgor including, without
limitation, all copyrights, rights under copyrights and copyright applications
and all physical properties relating to a Film including, without limitation,
films, prints, negatives, positives and the like; all collateral, allied,
ancillary, subsidiary and merchandising rights therein, and all properties
4
and things of value pertaining thereto and all products and proceeds
thereof whether now in existence or hereafter made, acquired or produced.
For purposes of this Pledge Agreement, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are sold,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without limitation, all rights to
payment, including returned premiums, with respect to any insurance
relating thereto.
Concurrent herewith, Pledgor shall deliver the certified copy of a
resolution duly adopted by the Board of Directors of the Pledgor signed by
a duly authorized Officer of the Pledgor, conferring the necessary
authority upon the person(s) signing the Pledge Agreement.
2. Compromise of Claims. Bank may compromise or settle, at Pledgor's expense,
any claim which may materially adversely affect Bank's interest in, or
rights hereunder with respect to the Collateral, provided that Bank shall
first deliver written notice to Pledgor of its intention to so compromise
or settle such claim and Pledgor does not cure such claim within 30 days of
receipt of such notice.
3. Financing Statement. At the request of Bank, Pledgor will join in
executing, or will execute as appropriate, all necessary financing
statements in a form satisfactory to Bank, and will pay the cost of filing
such statements. Pledgor will execute all other instruments reasonably
deemed necessary by Bank and pay the cost of filing such documents. Pledgor
warrants that no financing statement covering the Collateral or any part
thereof, or any proceeds thereof, is presently on file in any public office
except as set forth on Schedule A hereto.
4. Alienation of Collateral. Pledgor will not, without the written consent of
Bank, sell, contract to sell, lease, encumber, or otherwise dispose of the
Collateral or any interest therein until this Pledge Agreement and all
debts secured thereby have been fully satisfied, except: (i) in the
ordinary course of Pledgor's business, and (ii) with respect to any of the
Collateral or interest therein with a value (as determined by Pledgor's
Board of Directors) not exceeding USD 250'000.00 in the aggregate.
5. Release of Collateral. Bank agrees that upon the payment in full of the
principal and interest on the Notes or the conversion of the Notes into
common stock of Pledgor in accordance with the terms thereof, the Bank
shall immediately release to Pledgor the
5
Collateral. The released Collateral shall immediately be delivered to
Pledgor free and clear of this Pledge Agreement and any and all liens
created hereby shall terminate and the Collateral then remaining and not
previously applied against such obligations as provided herein held by Bank
shall be promptly returned to Pledgor. Upon such release and termination,
Bank will, at Pledgor's expense, execute and deliver to Pledgor such
documents (including, without limitation, UCC termination statements) as
Pledgor shall reasonably request to evidence the termination of the liens
created hereby and the release of the Collateral. Bank shall not be deemed
to have made any representation or warranty with respect to any Collateral
so delivered, except that such Collateral is free and clear, on the date of
delivery, of any and all liens, charges and encumbrances arising from its
own acts.
6. Protection of Collateral. Pledgor shall keep the Collateral in good order
and repair; Pledgor shall not waste or destroy the Collateral or any
material part thereof; and Pledgor shall not use Collateral in violation in
any material respect of any statute or ordinance. Bank shall have the right
to examine and inspect the Collateral at any reasonable time upon five days
prior written notice to Pledgor.
7. Remedies.
7.1. In addition to having the right to exercise any right or remedy of a
secured party upon default under applicable law, Bank shall have the
right to, to the extent permitted by law, without being required to
give any notice to Pledgor except as provided below:
Sell the Collateral without any formalities (in particular without
the formalities prescribed by the Swiss Federal Debt Collection and
Bankruptcy Act), or any part thereof, at public or private sale for
cash, upon credit or for future delivery, and at such price or prices
as Bank may deem best, and Bank may (except as otherwise provided by
law) be the purchaser of any or all of the Collateral so sold and
thereafter may hold the same, absolutely, free from any right or
claim of whatsoever kind; upon any such sale, Bank shall have the
right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale, shall hold the
property sold, absolutely, free from any claim or right of whatsoever
kind, including any equity or right of redemption, of Pledgor, who
hereby specifically waives all rights of redemption, stay or
appraisal which it has or
6
may have under any rule of law or statute now existing or hereafter
adopted. Bank shall give Pledgor not less than 10 days' written
notice of its intention to make any such public or private sale. Such
notice, in case of public sale, shall state the time and place fixed
for such sale. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as
Bank may fix in the notice of such sale. At any sale the Collateral
may be sold in whole or in part, as Bank may determine. Bank shall
not be obligated to make any sale pursuant to any such notice. Bank
may, without notice or publication, adjourn any sale or cause the
same to be adjourned from time to time by announcement at the time
and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale
of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by Bank until the
selling price is paid by the purchaser thereof, but Bank shall not
incur any liability in case of the failure of such purchaser to take
up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. Bank may
be the purchaser of any or all of the Collateral so sold and hold the
same thereafter in its own right, free from any claim of Pledgor or
right of redemption. At any such sale Bank shall be entitled to apply
the unpaid principal balance and, accrued interest on the Notes
toward the payment of the purchase price, or any part thereof.
7.2. On any sale of the Collateral, Bank is hereby authorized to comply
with any limitation or restriction in connection with such sale that
it may be advised by counsel is necessary in order to avoid any
violation of applicable law or in order to obtain any required
approval of the purchaser or purchasers by any governmental
regulatory authority or officer or court. Compliance with the
foregoing procedures shall result in such sale or disposition being
considered or deemed to have been made in a commercially reasonable
manner. The rights and remedies specified in this Pledge Agreement
are cumulative and may be exercised from time to time in accordance
with applicable law and as often as Bank deems advisable. No failure
to exercise or delay in the exercise of any right or remedy by Bank
shall constitute a waiver of any such right or remedy.
Notwithstanding the occurence of an Event of Default (as defined in
the Agreement), nothing in this Pledge Agreement shall be deemed to
impose upon Bank any obligation to exercise any remedy hereunder.
7
7.3. The proceeds of any sale of all or any part of the Collateral
pursuant to this paragraph 7, together with all other moneys and
property held as or received by Bank on or in respect of the
Collateral shall be applied by Bank in the following order of
priority:
FIRST, to the payment of all reasonable costs and expenses of such
sale, including reasonable compensation to Bank and its agents and
counsel, and all expenses, liabilities and advances made or incurred
by Bank in connection therewith;
SECOND, to the payment of the principal of, and interest on, the
Notes; and
THIRD, to the payment of any surplus then remaining from such
proceeds to Pledgor, or otherwise as a court of competent
jurisdiction may direct.
7.4. Following the sale of any or all of the Collateral as provided
herein, Pledgor shall have no rights to the sold Collateral or the
proceeds from such sale.
8. Notices. Any and all notices, demands or other communications required or
desired to be given hereunder by any party shall be in writing and shall be
validly given or made to another party if given by telex (in the case of
Bank), facsimile, telegram if addressed as set forth below. Such notice,
demand or other communication shall be conclusively deemed made at the time
of such delivery.
To Bank: BANCA DEL GOTTARDO
Viale Stefano Franscini 8
6901 Lugano, Switzerland
Attention: Capital Market Department
Telex: No: 841 052
Facsimile: 0114191 281 843
To Pledgor: SHOWSCAN ENTERTAINMENT INC.
3939 Landmark Street
Culver City
California 90232-2315, U.S.A.
Attention: William C. Soady
President and Chief Executive Officer
Facsimile: (310) 280-04 76
8
copies to:
W. Tucker Lemon
Vice President and General Counsel
Facsimile: (310) 559-79 84
Dennis Pope
Executive Vice President and Chief Financial Officer
Facsimile: (310) 280-04 76
Any party hereto may change its address for the purpose of receiving
notices, demands and other communication as herein provided by a written
notice given in the manner aforesaid to the other party or parties hereto.
9. Amendment. No amendment, change or modification of this document shall be
valid unless in writing and signed by all of the parties hereto.
10. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11. Applicable Law and Jurisdiction. This Pledge Agreement shall be governed by
and construed in accordance with the laws of the State of California. Any
dispute which might arise between Bank on the one hand and Pledgor on the
other hand regarding this Pledge Agreement shall fall within the
jurisdiction of the Superior Court of Central Los Angeles County,
California 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.
9
In Witness Whereof, the parties have executed this Pledge Agreement at
Culver City as of the day and year first above written.
SHOWSCAN ENTERTAINMENT INC.
By: /s/ William C. Soady
-------------------------
William C. Soady
President
BANCA DEL GOTTARDO
By: /s/ Fabio Testori
-------------------------
/s/ Francesco Bolgiani
-------------------------
10
Schedule A
to the Pledge/Security Agreement
dated September 1, 1995
Financing Statement on Form UCC-1 bearing file No. 92199259, made by Showscan
Corporation in favor of Copelco Credit Corporation filed on September 14, 1992
with the California Secretary of State with respect to one Ricoh photocopier.
EX-4.5
6
EXHIBIT 4.5
1
EXHIBIT 4.5
AMENDMENT TO
PLEDGE/SECURITY AGREEMENT
--------------------------------------------------------------------------------
THIS AMENDMENT TO PLEDGE/SECURITY AGREEMENT ("Amendment") is made and entered
into effective September 1, 1995 by and between Showscan Entertainment Inc., a
Delaware corporation ("Pledgor"), and Banca del Gottardo ("Bank"), with respect
to the following facts:
A. Pledgor and Bank are parties to that certain Note Purchase, Paying and
Conversion Agency Agreement dated as of August 14, 1995 ("Agreement") and that
certain Pledge/Security Agreement dated as of September 1, 1995 ("Pledge
Agreement").
B. Pledgor and Bank desire to make certain amendments to the Pledge Agreement
as provided herein.
NOW, THEREFORE, in consideration the premises and of the mutual agreements and
covenants hereinafter contained, the parties hereto agree as follows:
1. References to Bank; Confirmation. Paragraph 1 of the Pledge Agreement
shall be amended by adding the following at the end thereof:
"The term "Bank" as used in this paragraph 1 shall mean Bank for itself
and for the ratable benefit of the holders from time to time of the Notes.
Pledgor hereby confirms the grant of a security interest in the Collateral
to and in favor of Bank for itself and for the ratable benefit of the
holders from time to time of the Notes to secure the payment and
performance of all of the covenants and obligations of Pledgor under the
Notes and the Agreement. Bank hereby confirms that its holds the
Collateral for itself and for the benefit of the holders from time to time
of the Notes and, with respect to all matters relating to the Collateral,
Pledgor shall be entitled to deal solely with Bank."
2. References to Notes. The term "Notes" as used herein and in the Pledge
Agreement shall mean and include all of the 8% Convertible Notes of 1995 due
September 1, 1999 issued pursuant to the Agreement including the Global Note (as
defined in the Agreement).
3. Collateral. Clause (7) of paragraph 1 of the Pledge Agreement shall be
amended in its entirety to read as follows:
"(7) all cash and all deposit accounts, and to the extent not
otherwise included in the foregoing clauses, all other accounts,
chattel paper, intellectual property, general intangibles, good,
instruments and documents; and"
4. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5. Applicable Law and Jurisdiction. This Amendment shall be governed by and
construed in accordance with the laws of the State of California. Any dispute
which might arise between Bank on the one hand and Pledgor on the other hand
regarding this Amendment shall fall within the jurisdiction
2
of the Superior Court of Los Angeles County, California and/or the United States
District Court for the Central District of California, with the right to appeal
to the state and/or the federal appellate Courts.
In Witness Whereof, the parties have executed this Amendment as of the day and
year first above written.
SHOWSCAN ENTERTAINMENT INC.
By: /s/ Dennis Pope
----------------------------------
Name: Dennis Pope
Title: Executive Vice President
BANCA DEL GOTTARDO
By: /s/ Fabio Testori /s/ Hans Gugolz
-------------------------- ---------------
Name: Fabio Testori Hans Gugolz
Title: Member of the Member of
Executive Board Management
EX-99.1
7
EXHIBIT 99.1
1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
SHOWSCAN ENTERTAINMENT ANNOUNCES $7 MILLION
PRIVATE PLACEMENT
Los Angeles, California, August 16, 1995 - Showscan Entertainment Inc.
(NASDAQ:SHOW) today announced the consummation of a $7 million private placement
of secured debt securities to European financial institutions.
The transaction will be funded on September 1, 1995 after the satisfaction
of certain customary securities settlement conditions. The transaction calls
for the issuance of secured convertible notes with a conversion price of $5.75
per share, the closing price on the Nasdaq National Market on August 14, 1995.
The notes will be convertible into 1,217,391 shares of Showscan common stock
beginning on December 1, 1995. The notes have a four year maturity and an 8
percent interest rate with a semi-annual payment schedule.
The notes will not be registered under the United States securities laws
and may not be offered or sold in the United States absent registration or an
applicable exemption therefrom.
The proceeds of the transaction will be used to fund new owned and
operated theatres, as well as for new film production and for general corporate
purposes.
Showscan Entertainment Inc. is an international leader in the production
and exhibition of exciting movie-based entertainment attractions shown in
large-screen, special format theatres worldwide. The company's simulation and
specialty theatres, which utilize the patented Showscan film process, are open
or under construction in 21 countries around the world, located in theme parks,
motion picture multiplexes, expos, world's fairs, resorts, shopping centers,
casinos, museums, and other tourist destinations. Showscan owns and operates its
own theatres, and operates others in partnership with leading entertainment
companies around the world.
###
CONTACTS:
Showscan Entertainment Inc. - Mary Lou Hotsko, 310-558-0150
Stern, Auerbach and Company - Steven D. Stern, 310-442-8414
STERN, AUERBACH AND COMPANY
12121 Wilshire Boulevard - Suite 520
Los Angeles, California 90025
Telephone: 310-442-8414 - Facsimile: 310-442-8411
News Release
STERN, AUERBACH AND COMPANY
12121 Wilshire Boulevard - Suite 520
Los Angeles, California 90025
Telephone: (310) 442-8414
EX-99.2
8
EXHIBIT 99.2
1
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
SHOWSCAN ENTERTAINMENT
CONCLUDES $7 MILLION PRIVATE PLACEMENT
Los Angeles, CA - September 5, 1995 - Showscan Entertainment Inc. today
announced that it had concluded its previously announced private placement of $7
million through Banca del Gottardo, located in Lugano, Switzerland.
The transaction calls for the issuance of a convertible note with the conversion
price based upon the closing price on NASDAQ on August 14, 1995, of $5.75 per
share. The note will be convertible into 1,217,391 shares of Showscan common
stock beginning on December 1, 1995. The note has a four year maturity period
and an 8 percent interest rate with a semi-annual payment schedule.
Showscan Entertainment Inc. is an international leader in the production and
exhibition of exciting movie-based entertainment attractions shown in
large-screen, special-format theatres worldwide. The company's simulation and
specialty theatres, which utilize the patented Showscan film process, are open
or under construction in 21 countries around the world, located in theme parks,
motion picture multiplexes, expos, world's fairs, resorts, shopping centers,
casinos, museums and other tourist destinations. Showscan owns and operates its
own theatres, and operates others in partnership with leading entertainment
companies around the world.
###
CONTACTS:
Showscan Entertainment Inc. - Mary Lou Hotsko, 310-558-0150
Stern and Company - Steven D. Stern, 310-442-8414
STERN, AUERBACH AND COMPANY
12121 Wilshire Boulevard - Suite 520
Los Angeles, California 90025
Telephone: 310-442-8414 - Facsimile: 310-442-8411
News Release
STERN, AUERBACH AND COMPANY
12121 Wilshire Boulevard - Suite 520
Los Angeles, California 90025
Telephone: (310) 442-8414