PROMISSORY NOTE
$250,000.00 March 24, 1998
1.) FOR VALUE RECEIVED, IAT Communication AG (the "Maker"), by this promissory
note (the "Note") borrows the principal sum of two hundred fifty thousand
dollars of the United States of America (U.S. $250,000.00) from Dr. Viktor Vogt,
a German citizen ("Dr. Vogt"), pursuant to the Spinoff Agreement (the
"Agreement") dated as of March 11, 1998 by and among IAT Multimedia, Inc., a
corporation organized under the laws of the State of Delaware ("IAT"), IAT AG, a
corporation organized under the laws of Switzerland and wholly-owned subsidiary
of IAT ("AG"), 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. Subject to Section 9,
this Note may be prepaid at any time.
4.) Subject to Section 9, 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; or
(e) any breach of the terms of this Note;
then, or at any time thereafter during the continuance of any such Event of
Default, Dr. Vogt 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 Dr. Vogt for all reasonable expenses, including, without
limitation, reasonable attorneys' fees and costs, incurred by Dr. Vogt 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 any court 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 Dr. Vogt to serve legal
process in any other manner permitted by law or affect the right of Dr. Vogt to
bring any action or proceeding against the Maker or its property in the courts
of other jurisdictions.
6.) [Intentionally Deleted.]
7.) Any failure or delay of Dr. Vogt 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 Dr. Vogt 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.
8.) All payments due to Dr. Vogt 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 Dr. Vogt
("Taxes")), all of which will be for the account of Maker and paid by it when
due. The Maker will indemnify and reimburse Dr. Vogt 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 Dr. Vogt, 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 Dr. Vogt 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.
9.) This Note is expressly made subordinate and junior in right of payment in
right of payment to (i) the note of the Maker to AG of even date (the "Purchase
Price Note") and (ii) the note of the Maker to IAT of even date (the "IAT Note"
and, together with the Purchase Price Note, the "Senior Debt"). No payment of
principal shall be made on this Note unless the principal and all interest on
the Senior Debt has been indefeasibly made. No payment of interest shall be made
on this Note unless the interest on the Senior Debt on or before the date of
such interest payment date has been indefeasibly made. No principal or interest
shall be made on this Note at any time that there exists a default (or event
which with the giving of notice or the lapse of time will constitute a default)
on the Senior Debt. If any payments are made to the holder of this Note in
contravention of the terms of this Section 9, the holder of this Note will
immediately pay such amounts received over to the holders of the Senior Debt.
Nothing shall impair, as between the Maker and the holder of this Note, the
obligations of the Maker to pay the holder of this Note all amounts payable
under this Note. The holder of this Note may not accelerate this Note pursuant
to Section 4 due to any delays in the payment of interest or principal on this
Note pursuant to the operation of this Section 9.
10.) 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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