PROMISSORY NOTE
March 24, 1998
1.) FOR VALUE RECEIVED, IAT Communication AG (the "Maker"), by this promissory
note (the "Note") promises to pay the outstanding principal balance principal
set forth on Appendix A hereto to IAT AG, a corporation organized under the laws
of Switzerland ("AG"), pursuant to the Transfer Agreement (the "Agreement")
dated as of March 11, 1998 by and among AG, IAT Multimedia, Inc., a corporation
organized under the laws of the State of Delaware and the parent of IAT AG
("IAT"), Dr. Viktor Vogt, a German citizen ("Dr. Vogt") and the Maker.
2.) This Note shall bear interest at the rate of 3% per annum on the unpaid
principal amount, payable semi-annually on March 1 and September 1 beginning
September 1, 1998.
3.) This Note will be due and payable on March 24, 2001. This Note may be
prepaid at any time.
4.) If any of the following events (an "Event of Default") shall occur and be
continuing:
(a) the Maker shall fail to pay the principal or interest of
this Note when due;
(b) the Maker shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator, custodian or similar official
for itself or any of its properties or assets; (ii) be unable to pay or admit in
writing its inability to pay its debts generally as they become due; (iii) make
a general assignment for the benefit of creditors; (iv) become bankrupt or
insolvent; (v) commence a voluntary case for relief as a debtor under the United
States Bankruptcy Code or under any analogous provision of applicable United
States or foreign law or file a petition or an answer seeking reorganization, an
arrangement with creditors or to take advantage of any other present or future
applicable United States or foreign law respecting bankruptcy, reorganization,
insolvency, readjustment of debts, dissolution, liquidation or relief of
debtors; (vi) file any answer admitting the material allegations of a petition
under such law; or (vii) take any action for the purpose of effecting any of the
foregoing;
(c) (i) any case, proceeding or other action shall be
commenced against the Maker, or a substantial part of the Maker's properties or
assets, under the United States Bankruptcy Code or under any analogous provision
of United States or foreign law, and such case, proceeding or other action shall
remain undismissed for any period of sixty (60) days; or (ii) an order, judgment
or decree shall be entered without the application, approval or consent of the
Maker by any court of competent jurisdiction, approving a petition seeking
reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief with respect to the Maker or all or a substantial part of the Maker's
properties or assets, or appointing a receiver, trustee, liquidator, custodian
or other official of the Maker or all or a substantial part of the Maker's
properties or assets, and such order, judgment or decree shall continue unstayed
and in effect for any period of sixty (60) days;
(d) one or more final judgments for the payment of money in
excess of an aggregate of two hundred fifty thousand United States Dollars
(US$250,000.00) shall be rendered against the Maker and the same shall remain
undischarged for a period of sixty (60) days during which execution shall not be
effectively stayed or contested in good faith;
(e) any breach of the subordination provisions in the note
made by Maker to Dr. Vogt of even date (the "Vogt Note"), including, without
limitation, any payment or attempted payment of principal of the Vogt Note prior
to the payment in full of this Note or the IAT Note referred to in such
subordination provisions; or
(f) any breach of the terms of this Note;
then, or at any time thereafter during the continuance of any such Event of
Default, AG by notice to the Maker, may accelerate this Note and declare the
same to be forthwith due and payable, without presentation, demand, protest or
other notice of any kind, all of which hereby are expressly waived by the Maker,
anything contained herein to the contrary notwithstanding. The Maker agree to
reimburse AG for all reasonable expenses, including, without limitation,
reasonable attorneys' fees and costs, incurred by AG to enforce the provisions
of this Note and to collect the Maker's obligations hereunder.
5.) The Maker hereby irrevocably submits to the jurisdiction of the courts in
Zurich, venue being Zurich 1, and any appellate court from any thereof in any
action or proceeding arising out of or related to this Note, and the Maker
hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard or determined in such court. The Maker hereby
irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding. This
Note shall be governed by the laws of Switzerland. The Maker irrevocably
consents to the service of any and all process in any such action or proceeding
by the mailing of copies of such process to the Maker at the address for notices
set forth in the Agreement. The Maker agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this paragraph shall affect the right of AG to serve legal process in
any other manner permitted by law or affect the right of AG to bring any action
or proceeding against the Maker or its property in the courts of other
jurisdictions.
6.) Any failure or delay of AG to exercise any right hereunder shall not be
construed as a waiver of the right to exercise the same or any other right at
any other time. The waiver by AG of a breach or default of any provision of this
Note shall not operate or be construed as a waiver of any subsequent breach or
default hereunder. The provisions of this Note are severable, and the invalidity
or unenforceability of any provision shall not alter or impair the remaining
provisions of this Note.
7.) All payments due to AG will be made without set-off or counterclaim, free
and clear of any deduction or withholding on account of any present or future
taxes, duties, or other charges imposed by Switzerland or the United States of
America or any political subdivision or taxing authority thereof or therein
(other than taxes imposed on or measured by the net income of AG ("Taxes")), all
of which will be for the account of Maker and paid by it when due. The Maker
will indemnify and reimburse AG on demand for any deduction or withholding of
Taxes and interest and penalties thereon, and the Maker will pay such additional
amount as will result in the receipt by AG, after such deduction or withholding,
of an amount equal to the amount that would have been received if such deduction
or withholding had not been required. If the Maker pay any Tax, interest, or
penalties, as provided in this Note or makes any deduction or withholding from
amounts paid under this Note, Maker will forthwith forward to AG official
receipts or other evidence establishing payment of such amount. The provisions
of this paragraph including, without limitation, the Maker's agreement to
indemnify or reimburse, will survive the termination of this Note or the
complete repayment of this Note (whichever occurs first) for a period of seven
years.
8.) This Note consisting of four (4) pages is executed and delivered on the
twenty-fourth day of March, 1998.
IAT COMMUNICATION AG
By: /s/Viktor Vogt and /s/Bruno Bernasconi
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Name: Viktor Vogt and Bruno Bernasconi
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Title: Members of the Board
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APPENDIX A
Increase in Decrease in Net
Date Principal Amount Principal Amount Principal Amount
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24 MAR 98 $328,310.00 -0- $328,310.00
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All amounts on this Appendix are in United States dollars.