<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 24, 1998
------------------------------
IAT MULTIMEDIA, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 0-22486 13-3920210
--------------------------- ------------------- ------------------
(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
Geschaftshaus Wasserschloss, Aarestrasse 17, CH-5300
Vogelsang-Turgi, Switzerland
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (011)(41)(56) 223-5022
----------------------------
N/A
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
This Form 8-K/A amends the Current Report on Form 8-K of IAT Multimedia,
Inc. (the "Company") filed on March 20, 1998 (the "8-K").
Item 2. Acquisition or Disposition of Assets
The Company has completed the restructuring of both its Swiss and German
subsidiaries, IAT AG and IAT Deutschland GmbH Interaktive Mediensysteme ("IAT
GmbH"), respectively (together, the "Spinoffs"). The German restructuring, as
discussed in detail in the 8-K, was completed on March 5, 1998.
The Company has reached agreements with Dr. Vogt to transfer certain of
the assets and liabilities of IAT AG, other than, among others the Company's
intellectual property and the ownership interests in IAT Gmbh, to Swiss Newco,
a newly formed Swiss corporation which is owned jointly by Dr. Vogt (70%), other
key managers of Swiss Newco (15%) and IAT AG (15%). The Company closed this
restructuring on March 24, 1998 (the "Closing Date").
The Spinoffs were effected through the (i) Participation Agreement (the
"Participation Agreement") dated as of March 5, 1998 by and among IAT
Communication Systems GmbH (Germany) ("Communication Systems"), IAT AG, Dr.
Viktor Vogt, and Hanseatische Industrie-Beteiligungen GmbH (Germany) ("HIBEG"),
(ii) Spinoff Agreement dated March 5, 1998 by and among IAT GmbH and
Communication Systems, (iii) Agreement concerning the Assignment and Transfer of
Corporate Shares dated as of March 5, 1998 by and among HIBEG, IAT GmbH, and IAT
AG, (iv) Loan Transfer Agreement dated as of March 5, 1998 by and among HIBEG,
IAT GmbH, and Communication Systems, (v) Option Agreement dated as of March 5,
1998 by and among Dr. Viktor Vogt and HIBEG, (vi) Spinoff Agreement dated as of
March 11, 1998 by and among the Company, Dr. Viktor Vogt, and IAT Communication
AG, (vii) Transfer Agreement dated as of March 11, 1998 by and among the
Company, ("Swiss Newco") Swiss Newco, Dr. Viktor Vogt, and IAT Communication AG,
(viii) Agreement on the Acquisition of Assets dated as of March 18, 1998 by and
among IAT AG and Swiss Newco, (ix) Restructuring Agreement dated as of March 5,
1998 by and among IAT GmbH, IAT AG, Dr. Vogt and HIBEG, (x) Amendment No. 1 to
Transfer Agreement (the "Trasnfer Agreement Amendment") dated as of March 24,
1998 by and among the Company, IAT AG, Dr. Viktor Vogt and Swiss Newco, (xi)
Promissory Note dated as of March 24, 1998 by Swiss Newco to the Company, (xii)
Promissory Note dated as of March 24, 1998 by Swiss Newco to Dr. Viktor Vogt,
and (xiii) Promissory Note dated as of March 24, 1998 by Swiss Newco to IAT AG.
All references to any of these agreements and the descriptions of the
transactions contemplated thereby are qualified in their entirety by the actual
agreements, copies of which are attached hereto or have been filed with the 8-K.
On the Closing Date, Swiss Newco gave IAT AG its three year note (the
"Purchase Price Note"), denominated in U.S. Dollars, with an aggregate principal
amount equal to the book value of the transferred assets less the book value of
the assumed liabilities as of the January 1, 1998 plus the pro-rata portion of
any prepaid expenses and any portion of the Assumed Liabilities paid by IAT AG
prior to the Closing Date. The Purchase Price Note has an aggregate principal
amount of approximately $325,000 (less certain expenses of IAT AG to be paid by
Swiss Newco). The Purchase Price Note will pay interest at the rate of 3% per
annum, payable semi-annually on March 1 and September 1 beginning September 1,
1998. The Purchase Price Note will be due and payable on the third anniversary
of the Closing Date. The Purchase Price Note may be prepaid at any time without
penalty.
On the Closing Date, the Company loaned Swiss Newco $250,000 (the "IAT
Loan") which is evidenced by Swiss Newco's note (the "IAT Note"). The IAT Note
will pay interest at the rate of 3% per annum, payable semi-annually on March 1
and September 1 beginning September 1, 1998. The IAT Note will be due and
payable on the earlier of (i) the third anniversary of the Closing Date and (ii)
the date on which Swiss Newco closes one or more funding transactions resulting
in issuance of Swiss Newco's (A) debt with an aggregate principal amount of SF
1,000,000 or more, (B) capital stock for consideration of SF 1,000,000 or more,
or (C) any combination of (A) or (B) amounting to SF 1,000,000 or more. The IAT
Note may be pre-paid at any time without penalty. The Company has no further
obligation to make future contributions to Swiss Newco.
On the Closing Date, Dr. Vogt loaned Swiss Newco $250,000 (the "Vogt Loan")
which is evidenced by Swiss Newco's note (the "Vogt Note"). The Vogt Note will
pay interest at the rate of 3% per annum, payable semi-annually on March 1 and
September 1 beginning September 1, 1999. The Vogt Note will be due and payable
on the third anniversary of the Closing Date. The Vogt Note may be pre-paid at
any time without penalty; provided, however, that the Vogt Note may not be paid
prior to the time that the IAT Note and the Purchase Price Note are paid in
full. The Vogt Note shall be subordinated in all respects to the IAT Note and
the Purchase Price Note.
<PAGE>
On the Closing Date, the Transfer Agreement Amendment was executed. The
Transfer Agreement Amendment clarifies that Swiss Newco will assume the
obligation of IAT AG to supply Communication Systems with components and
know-how pursuant to Section 6.2 of the Participation Agreement.
The Company will maintain its ownership of all intellectual property
developed for its multimedia and compression/decompression hardware and software
products and expects, through its subsidiary IAT AG, to derive future revenue
through licensing fees and royalty generation associated with its technology. In
connection with such Swiss restructuring, the Company has granted Swiss Newco a
non-exclusive five-year license to use IAT AG's intellectual property for
multimedia and compression/decompression applications. Swiss Newco has the right
to grant sublicenses to Communication Systems and other affiliates. In most
cases, the royalty varies between 10% and 20% of the sales price of the software
sold. Swiss Newco has a five-year option to purchase a 50% co-ownership of IAT
AG's intellectual property for $1 million. Upon the exercise of such option, the
royalty paid by Swiss Newco to IAT AG would be cut in half and IAT AG would pay
Swiss Newco half of the royalties received by IAT AG from third-parties. In
addition, after exercise of the option, Swiss Newco can grant sub-licenses to
third-parties or transfer the license or co-ownership interest, in each case
subject to the consent of IAT AG.
Future Agreements. The Company expects to enter into additional agreements
with Swiss Newco covering the marketing of products developed by the Company and
to be produced by Swiss Newco as a result of the Spinoff. However, there can be
no assurance that such agreements will be entered into.
Dr. Vogt. In connection with the restructuring of IAT AG and IAT GmbH, Dr.
Vogt has resigned from his positions as Co-Chairman and CEO of the Company and
from management positions in the Company's subsidiaries. Dr. Vogt continues to
provide services to the Company as a director and a consultant. In addition, Dr.
Vogt and the Company have agreed to a three-year consulting contract whereby Dr.
Vogt will provide the Company with his services in respect of (i) evaluation and
analysis of technology issues, (ii) identification, evaluation and integration
of acquisitions for the Company and (iii) such other matters as the Board of
Directors of the Company may request and Dr. Vogt may agree to. In connection
with such consulting agreement, Dr. Vogt will be entitled to receive the sum of
$2,000 per month for his normal duties. The Company and Dr. Vogt will negotiate
fees for services above Dr. Vogt's normal duties. In addition, the Company will
reimburse Dr. Vogt for his reasonable expenses in connection with his work for
the Company. The Company expects that Dr. Vogt will also enter into a consulting
agreement with FSE to help integrate FSE and IAT expects that FSE will pay Dr.
Vogt $2000 per month, plus reimbursement of reasonable expenses, for such
services.
In addition, Dr. Vogt will receive options to purchase 50,000 shares of the
Company's Common Stock at an exercise price of $5.00 per share. One third of
such options vest on each of the first three anniversaries of the Closing Date.
The options will be granted under the Company's existing stock option plan.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Business Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Pro Forma financial statements, which give effect to the dispositions
by the Company as described in Item 2 will be filed within 60 days of the
filing of the 8-K.
(c) Exhibits
10.1 Participation Agreement dated as of March 5, 1998 by and among
Communication Systems, IAT AG, Dr. Viktor Vogt, and HIBEG.*
10.2 Spinoff Agreement dated March 5, 1998 by and among IAT GmbH and
Communication Systems.*
10.3 Agreement concerning the Assignment and Transfer of Corporate Shares
dated as of March 5, 1998 by and among HIBEG, IAT GmbH, and IAT AG.*
10.4 Loan Transfer Agreement dated as of March 5, 1998 by and among HIBEG,
IAT GmbH, and Communication Systems.*
10.5 Option Agreement dated as of March 5, 1998 by and among Dr. Viktor Vogt
and HIBEG.*
10.6 Spinoff Agreement dated as of March 11, 1998 by and among the Company,
Dr. Viktor Vogt, and Swiss Newco.*
10.7 Transfer Agreement dated as of March 11, 1998 by and among the Company,
IAT AG, Dr. Viktor Vogt, and Swiss Newco.*
10.8 Agreement on the Acquisition of Assets dated as of March 18, 1998
between IAT AG and Swiss Newco.*
10.9 Restructuring Agreement dated as of March 5, 1998 by and among IAT
GmbH, IAT AG, Dr. Vogt and HIBEG.*
10.10 Amendment No. 1 to Transfer Agreement dated as of March 24, 1998 by and
among the Company, IAT AG, Dr. Viktor Vogt and Swiss Newco.
10.11 Promissory Note dated March 24, 1998 by Swiss Newco to the
Company.
10.12 Promissory Note dated March 24, 1998 by Swiss Newco to Dr.
Viktor Vogt.
10.13 Promissory Note dated March 24, 1998 by Swiss Newco to IAT AG.
* Previously filed with the Company's 8-K.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
IAT MULTIMEDIA, INC.
By: /s/ Klaus Grissemann
--------------------------------------------
Name: Klaus Grissemann
Title: Chief Financial Officer and Director
Date: April 2, 1998
<PAGE>
EXECUTION COPY
AMENDMENT NO. 1 TO TRANSFER AGREEMENT
This is Amendment No. 1 dated as of March 24, 1998 to the Transfer
Agreement (the "Agreement") dated as of March 11, 1998 by and among IAT
Multimedia, Inc., a corporation organized under the laws of Delaware ("IAT"),
IAT AG, a corporation organized under the laws of Switzerland and wholly-owned
subsidiary of IAT ("AG"), Dr. Viktor Vogt, a German citizen ("Dr. Vogt") and IAT
Communication AG ("Swiss Newco"). Terms used herein but not defined shall have
the meanings set forth in the Agreement.
1. The parties hereby agree that Annex I, LIABILITIES OF AG WHICH ARE
ASSUMED LIABILITIES, of the Agreement is hereby amended to add the following:
"In addition, Swiss Newco assumes the obligations of AG to make
components and know-how available to German Newco pursuant to Section
6.2 of the Participation Agreement dated as of March 5, 1998 by and
among German Newco, AG, Dr. Vogt, and HIBEG."
2. Swiss Newco hereby assumes all of its pre-incorporation liabilities.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the Agreement to be executed and delivered as of the day and year first above
written.
IAT MULTIMEDIA, INC.
By: /s/ Klaus Grissemann
------------------------------------
Name: Klaus Grissemann
-----------------------------------
Title: CFO
-----------------------------------
IAT AG
By: /s/Klaus Grissemann and /s/Monica Germann
-----------------------------------------
Name: Klaus Grissemann/Monica Germann
---------------------------------------
Title: CFO/Authorized Signatory
---------------------------------------
IAT COMMUNICATION AG
By: /s/Victor Vogt
-----------------------------------------
Name: Dr. Viktor Vogt
--------------------------------------
Title: Member of the Board
--------------------------------------
DR. VIKTOR VOGT
/s/ Viktor Vogt
---------------------------------------------
<PAGE>
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,
<PAGE>
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.
<PAGE>
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
--------------------------------------
Name: Viktor Vogt and Bruno Bernasconi
------------------------------------
Title: Members of the Board
-----------------------------------
<PAGE>
APPENDIX A
Increase in Decrease in Net
Date Principal Amount Principal Amount Principal Amount
- ---- ---------------- ---------------- ----------------
24 MAR 98 $328,310.00 -0- $328,310.00
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
- --------- ---------------- ---------------- ----------------
All amounts on this Appendix are in United States dollars.
<PAGE>
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 IAT Multimedia,
Inc., a corporation organized under the laws of the State of Delaware ("IAT"),
pursuant to the Spinoff Agreement (the "Agreement") dated as of March 11, 1998
by and among IAT, IAT AG, a corporation organized under the laws of Switzerland
and wholly-owned subsidiary of IAT ("AG"), 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 the earlier of (i) March 24, 2001 or
(ii) the date on which the Maker closes one or more funding transactions
resulting in issuance of the Maker's (A) debt with an aggregate principal amount
of SF1,000,000 or more, (B) capital stock for consideration of SF1,000,000 or
more , or (C) any combination of (A) or (B) amounting to SF1,000,000 or more.
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
<PAGE>
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 Purchase Price 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, IAT 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 IAT for all
reasonable expenses, including, without limitation, reasonable attorneys' fees
and costs, incurred by IAT 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 IAT to serve legal process
in any other manner permitted by law or affect the right of IAT to bring any
action or proceeding against the Maker or its property in the courts of other
jurisdictions.
<PAGE>
6.) Any failure or delay of IAT 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 IAT 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 IAT 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 IAT ("Taxes")),
all of which will be for the account of Maker and paid by it when due. The Maker
will indemnify and reimburse IAT 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 IAT, 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
IAT 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 three (3) pages is executed and delivered on the
twenty-fourth day of March, 1998.
IAT COMMUNICATION AG
By: /s/Viktor Vogt and /s/Bruno Bernasconi
--------------------------------------
Name: Viktor Vogt and Bruno Bernasconi
------------------------------------
Title: Members of the Board
-----------------------------------
<PAGE>
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,
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
--------------------------------------
Name: Viktor Vogt and Bruno Bernasconi
------------------------------------
Title: Members of the Board
-----------------------------------
