<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)
INTERNATIONAL META SYSTEMS, INC.
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(Name of Issuer)
Common Stock, $0.0001 par value
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(Title of Class of Securities)
45986B 10 8
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(CUSIP Number)
Den Norske Krigsforsikring for Skib
Raadhusgaten 25, P.O. Box 1464 Vika
N-0161 Oslo, Norway
Attention: Ms. Helen F. Malmberg, (47) 22 11 20 20
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 5, 1997
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(Date of Event Which Requires Filing
of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. []
Check the following box if a fee is being paid with this statement. []
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class.) (See Rule 13d-7.)
Page 1 of 7 pages
<PAGE> 2
SCHEDULE 13D
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CUSIP NO. 45986B 10 8 PAGE 2 OF 7 PAGES
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<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Den Norske Krigsforsikring for Skib
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e) [ ]
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Norway
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7 SOLE VOTING POWER
2,000,000 shares and $500,000 convertible into shares of
NUMBER OF Common Stock at the option of the Reporting Person on the
terms and conditions of the Convertible Promissory Note
attached as Exhibit 1 hereto.
---------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH ---------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
2,000,000 shares and $500,0000 convertible into shares of
Common Stock at the option of the Reporting Person on the
terms and conditions of the Convertible Promissory Note
attached as Exhibit 1 hereto.
---------------------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000 shares and $500,000 convertible into shares of Common Stock
at the option of the Reporting Person on the terms and conditions of the
Convertible Promissory Note attached as Exhibit 1 hereto.
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.36% and $500,000 convertible into shares of Common Stock at the
option of the Reporting Person on the terms and conditions of the
Convertible Promissory Note attached as Exhibit 1 hereto.
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IC
</TABLE>
2
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ITEM 1. SECURITY AND ISSUER.
The statement on Schedule 13D relating to the common stock, $0.0001 par
value per share, of International Meta Systems, Inc. (the "Company Common
Stock"), a Delaware corporation (the "Company"), as previously filed by Paragon
Limited Partnership, and as three times previously amended, first, by Paragon
Limited Partnership, Den Norske Krigsforsikring for Skib, Investeringsselskapet
Amandus AS, A/S Selvaag Invest, Andreas Ugland, Woodbridge Asset Management
Limited, J. Arthur Olafsen, Pollex A/S, Martin S. Albert, Filab A/S and Bent
Aasnaes (collectively, the "Prior Reporting Persons"), and secondly and thirdly,
by Amerscan Partners III, Limited Partnership, is hereby amended and
supplemented with respect to the items set forth below.
ITEM 2. IDENTITY AND BACKGROUND.
(a), (b), (c) and (f) This amendment is being filed by Den Norske
Krigsforsikring for Skib, a mutual insurance association organized under the
laws of Norway ("Den Norske" or the "Reporting Person").
Den Norske is principally engaged in the business of providing war hull
insurance for ships. The address of the principal business and registered
office of Den Norske is Raadhusgaten 25, P.O. Box 1464 Vika, N-0161 Oslo,
Norway.
The name, citizenship, business or residence address and present principal
occupation or employment of each of Den Norske's officers and directors, and the
name and principal address of any corporation or other organization in which
such employment is conducted, are set forth on Schedule A-1 hereto, which is
incorporated herein by reference.
Den Norske is a limited partner of Paragon Limited Partnership, an exempted
limited partnership organized under the laws of the Cayman Islands, British West
Indies ("Paragon"). As of February 15, 1996, Paragon beneficially owned
2,000,000 shares of Company Common Stock, and, subject to the terms of the
Shareholders Agreement, had the sole power to vote and the sole power to dispose
of such shares.
The preceding summary of the interests of the Reporting Person and certain
of the Prior Reporting Persons is not intended to be complete and is qualified
in its entirety by reference to the full text of Schedule 13D (Amendment No. 1)
filed in respect of an event which occurred on March 26, 1996, Schedule 13D
(Amendment No. 2) filed in respect of an event which occurred on July 15, 1997,
and Schedule 13D (Amendment No. 3) filed in respect of an event which occurred
on September 16, 1997, each of which is incorporated herein by reference.
(d) and (e) During the last five years, the Reporting Person has not and
neither, to the best knowledge of the Reporting Person, have any of the
individuals named in this Item 2 or in Schedule A-1 hereto been: (i) convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors);
or (ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The amounts and sources of funds used in connection with the consideration
for the extension of credit to the Company pursuant to the convertible
promissory note referred to below consisted of $500,000 contributed by Den
Norske from working capital.
ITEM 4. PURPOSE OF TRANSACTION.
Den Norske has extended credit to the Company pursuant to the Convertible
Promissory Note dated December 5, 1997, executed and delivered by the Company,
payable to Den Norske and convertible into shares of the Company Common Stock,
for investment purposes. The Company and Den Norske executed and delivered
Amendment No. 1 dated as of December 5, 1997 to such Convertible Promissory Note
("Amendment No. 1" and, as so amended, the "Convertible Note").
Pursuant to the Convertible Note, Den Norske agreed to loan the Company
$500,000 and the Company agreed to repay Den Norske the principal sum of the
Convertible Note, together with accrued interest thereon at a rate of 8% per
annum, on December 5, 1998. Under the terms of the Convertible Note, Den Norske
has the option to convert the unpaid principal amount of the Convertible Note,
together with accrued and unpaid interest thereon, into shares of the Company
Common Stock at a conversion rate equal to the unpaid principal amount of the
Convertible Note, together with accrued and unpaid interest thereon, divided by
the lower of: (i) $1.00 per share (subject to adjustments for stock splits,
reverse stock splits, stock dividends and/or recapitalizations of the Company
Common Stock), and (ii) 75% of the average of the mean between the closing bid
and asked price per share of the Company Common Stock for the five trading days
preceding the notice date of the exercise of such option. Den Norske may
exercise such option at any time prior to on December 5, 1998.
The preceding summary of certain provisions of the Convertible Note and
Amendment No. 1 thereto is not intended to be complete and is qualified in its
entirety by reference to the full text of the Convertible Note and Amendment No.
1 thereto, copies of which are filed as Exhibit 1 and Exhibit 2 hereto,
respectively, and which are incorporated herein by reference.
Other than as described above, Den Norske has no plans or proposals that
relate to or would result in any of the actions described in subparagraphs (a)
through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a), (b) and (c) As of December 5, 1997, Den Norske beneficially owned
2,000,000 shares of Company Common Stock, and, subject to the terms of the
Shareholders Agreement, had the sole power to vote and the sole power to dispose
of such shares. Den Norske purchased such shares of Company Common Stock on
March 26, 1996. Den Norske further beneficially owned the right to convert the
unpaid principal of, and interest on, the Convertible Note, the original
principal amount of which is $500,000, into shares of Company Common Stock on
the terms and conditions set out in the Convertible Note. Upon any such
conversion, as an original party to the Shareholders Agreement, Den Norske will
be bound by the terms of such Shareholders Agreement with respect to such shares
of Company Common Stock and, subject to the terms of such Shareholders
Agreement, will have the sole power to vote and the sole power to dispose of
such shares of Company Common Stock. A copy of the Shareholders Agreement was
filed as
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<PAGE> 5
Exhibit 6 to Schedule 13D (Amendment No. 1) filed in respect of an event which
occurred March 26, 1996 and is incorporated herein by reference.
(d) and (e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as provided in the Convertible Note, or as set forth herein, the
Reporting Person has not, nor, to the best of the Reporting Person's knowledge,
have any of the individuals named in Schedule A-1 hereto, had any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of the Company, including, but not limited
to, transfer or voting of any securities, finder's fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or losses, or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Conformed copy of a Convertible Promissory Note dated December 5, 1997,
executed and delivered by the Company and payable to Den Norske.
Conformed copy of an Amendment No. 1 dated as of December 5, 1997, between
the Company and Den Norske.
5
<PAGE> 6
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
amendment to the statement on Schedule 13D is true, complete and correct and
that such statement, as amended hereby, is true, complete and correct.
Dated: December 12, 1997
DEN NORSKE KRIGSFORSIKRING FOR SKIB
By /s/ Ole Henrik Eide
________________________
Name: Ole Henrik Eide
Title: Managing Director
By /s/ Tor Christiansen
________________________
Name: Tor Christiansen
Title: Account Manager
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<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<S> <C>
1. Conformed copy of a Convertible Promissory Note dated December 5,
1997, executed and delivered by International Meta Systems, Inc. and
payable to Den Norske Krigsforsikring for Skib
2. Conformed copy of Amendment No. 1 dated as of December 5, 1997, between
International Meta Systems, Inc. and Den Norske Krigsforsikring for
Skib
</TABLE>
7
<PAGE> 1
Exhibit 1
THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). NEITHER THIS NOTE NOR ANY OF SUCH SECURITIES MAY BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT.
CONVERTIBLE PROMISSORY NOTE
US$500,000.00 December 5, 1997
FOR VALUE RECEIVED, INTERNATIONAL META SYSTEMS, INC., a corporation
organised and existing under the laws of the State of Delaware, USA, (the
"Company"), hereby promises to pay to Den Norske Krigsforsikring for Skib,
attention Ole Henrick Eide (the "Holder") for account of its principal office,
located on the date hereof at Postboks 1464 Vika, 0116 Oslo, Norway at Smith
Barney Inc., 21550 Oxnard St, Woodland Hills, CA 91367 (account name: "Amerscan
Partners III, Limited Partnership"), the principal sum of Five Hundred Thousand
Dollars ($500,000) and any and all other amounts due hereunder, in lawful money
of the United States of America and in immediately available funds, on the date
and in the amount specified below, and to pay interest on the outstanding
principal amount hereof and any such other amount, at such office and account,
in like money and funds, for the period from and including the date hereof to
but excluding the date on which such principal amount shall have been paid in
full, at a rate of eight percent (8%) per annum, on the date specified below.
Interest hereunder shall be calculated on the basis of a year of 360 days and
the actual number of days elapsed.
The proceeds of the loan shall be paid to the Amerscan Partners III L.P.
(as an escrow account) by means of wire transfer.
The Company shall pay to the Holder the outstanding principal amount of
this Note, and this Note shall mature, on December 5, 1998. Accrued interest
on the outstanding principal amount of this Note shall be due and payable on
December 5, 1998, and shall be payable only to the extent this Note is not
converted in whole or in part as set forth herein. Prepayments of principal,
together with accrued interest thereon up to but excluding the date of payment,
may be made at any time without penalty.
1. CONVERSION
1.1 OPTIONAL CONVERSION
The entire outstanding principal amount of this Note, together with any
accrued and unpaid interest thereon up to but excluding the Conversion Date (as
defined below), shall be convertible at any time, at the option of the Holder,
into shares of common stock of the Company (the "Shares").
<PAGE> 2
The number of Shares of the Company to be issued upon such conversion shall be
equal to the quotient obtained by dividing (a) the outstanding principal amount
of this Note on the Conversion Date plus any accrued and unpaid interest thereon
to but excluding the Conversion Date by (b) the lower of (i) US$1 per Share, as
adjusted for any stock splits, reverse stock splits, stock dividends and/or
recapitalizations after the date hereof, and (ii) Seventy-Five Percent (75%) of
the average of the mean between the closing bid and asked price per Share for
the five (5) trading days immediately preceding the date of the Conversion
Notice if on such date the Shares are traded and listed on a Stock Exchange. As
used herein, "Conversion Date" shall mean the date specified as such in a
Conversion Notice, and "Stock Exchange" shall mean the American Stock Exchange,
the New York Stock Exchange, the Nasdaq National Market System, the Nasdaq
SmallCap Market or the NASD Bulletin Board (the Over the Counter Market), as
applicable. In addition, the Company shall have the right to require the
Holder, upon written request of the Company at any time on or prior to December
5, 1998, to convert the entire outstanding principal amount of this Note,
together with any accrued interest thereon up to but excluding the Conversion
Date, on and subject to the terms specified in this Section 1, if on the date of
such written request by the Company, the mean between the closing bid and asked
price per Share is greater than US$2 per Share, as adjusted for any stock
splits, reverse stock splits, stock dividends and/or recapitalizations after the
date hereof.
1.2 CONVERSION PROCEDURE
If the Holder wishes (or is required) to convert this Note into Shares in
accordance with Section 1.1 hereof, the Holder shall deliver a Conversion Notice
in the form attached as Annex A hereto (a "Conversion Notice") to the Company in
accordance with Section 7.2 hereof.
1.3 DELIVERY OF SHARE CERTIFICATES; FRACTIONAL SHARES
As promptly as practicable after return of this Note to the Company by the
Holder in accordance with Section 1.2 hereof, the Company (at its expense) shall
issue and deliver to the Holder a certificate or certificates for the number of
full Shares issuable upon conversion of this Note. No fractional shares shall
be issued upon conversion of this Note. In lieu of any fractional share to
which the Holder would otherwise be entitled, such fractional share shall be
rounded to the nearest whole Share.
1.4 RESERVATION OF SHARES ISSUABLE UPON CONVERSION
At all times while the Holder retains the option to convert this Note into
Shares of the Company, the Company shall reserve and keep available out of its
authorised but unissued Shares (which shall not be subject to pre-emption or any
similar rights) such number of its Shares as shall be sufficient to effect the
conversion of this Note.
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<PAGE> 3
1.5 REGISTER; REPLACEMENT NOTES
The Company shall maintain a register in which it shall provide for the
registration of this Note and any transfers of this Note. The Holder shall be
entitled to have this Note subdivided by exchange for Notes of lesser
denominations in connection with an assignment of all or any portion of this
Note by the Holder pursuant to Section 7.6 hereof. Whenever this Note is
surrendered for exchange, the Company shall execute the Note(s) which the Holder
and/or its assignee is entitled to receive in connection with such exchange.
Each Note issued upon any exchange of this Note shall be the valid obligation of
the Company, evidencing the same debt, and entitled to the same benefits, as
this Note.
2. BOARD APPOINTMENT RIGHT
Until all principal of, interest on and any other amount owing under this
Note shall have been paid in full, Amerscan Capital Management Ltd., on behalf
of the Holder, or its designee, shall have the right to appoint one (1) member
to the Board of Directors of the Company. Such member of the Board of
Directors, shall have the right to appoint the chairman of the Finance Committee
of the Board of Directors, which shall consist of at least three (3) members of
the Board of Directors.
3. CONDITIONS PRECEDENT
The obligation of the Holder to make its initial loan hereunder is subject
to the receipt by the Holder on or prior to the date hereof of this Note.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Holder that:
(a) The Company has taken all necessary action to authorise the
execution, delivery and performance of this Note (including, without
limitation, obtaining the approval thereof by the Board of Directors of the
Company).
(b) This Note has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms;
(c) No consent, approval or authorisation of any third party is
required for the execution, delivery or performance of this Note by the Company
which has not been received, and the execution, delivery and performance of
this Note does not and will not violate, conflict with, result in a violation
or breach of, or constitute a default under, any law, rule, regulation or
judicial or administrative decision to which the Company may be subject, the
Company's Certificate of Incorporation or By-Laws, or any indenture, agreement
or instrument to which the Company or any of its property is subject, or which
would create a mortgage, pledge, lien, charge, debenture,
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<PAGE> 4
assignment, hypothecation or security interest or any other agreement or
arrangement having the effect of conferring security (hereinafter a "Lien") or
restriction of any kind upon the Company or any of its property or revenues;
(d) The Company's obligations under this Note rank in all respects at
least pari passu in priority of payment and in right of security with all of the
Company's other unsecured indebtedness, whether now or hereafter incurred; and
(e) No Event of Default (as hereinafter defined) has occurred and is
continuing, nor has any event occurred which but for the giving of notice or the
lapse of time or both might constitute an Event of Default.
5. COVENANTS OF THE COMPANY
The Company hereby covenants and agrees with the Holder that:
(a) The Company will ensure that its obligations under this Note will
at all times constitute its direct, general and unconditional obligations and
rank in all respects at least pari passu in priority of payment and in right of
security with all of the Company's other unsecured indebtedness;
(b) The Company will pay all and any taxes, levies, duties, imposts,
charges and withholdings of any nature whatsoever (hereinafter "Taxes") owing by
the Company as a result of the conversion of this Note in accordance with
Section 1.1 hereof;
(c) The Company will promptly, but in no event later than three
business days after notice to the Company of the occurrence of any of the events
described in clauses (i) through (iv) (inclusive) of this Section 5(c), notify
the Holder by facsimile of the particulars of such occurrence and the action, if
any, proposed to be taken with respect thereto: (i) any Event of Default (as
hereinafter defined) or any event which, but for the giving of notice or the
lapse time or both would constitute an Event of Default; (ii) any involuntary
Lien shall have been created upon the property of the Company in an amount
which, if the Company were required to pay such amount, is likely to materially
and adversely affect the Company's ability to perform its obligations under this
Note or the Security Agreement; (iii) any judgement against the Company shall
have been entered on a claim not covered by insurance in an amount which, if the
Company were required to pay such amount, is likely to materially and adversely
affect the Company's ability to perform its obligations under this Note, (iv)
any Taxes are imposed upon any payments made hereunder; or (v) any other event
or condition shall occur or exist with respect to the Company which is likely to
materially and adversely affect the Company's ability to perform its
obligations under this Note ;
(d) The Company will furnish, or cause to be furnished, to the Holder
(i) simultaneously with the filing thereof with the Securities and Exchange
Commission, the annual report and financial statements of the Company for the
relevant financial year of the Company bearing an auditor's
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<PAGE> 5
report, (ii) as soon as the same are available (and in any event within 50 days
after the end of each fiscal quarter), the unaudited financial statements of the
Company for such fiscal quarter (including, without limitation, any management
reports or accounts included in the Company's publicly filed reports) and (iii)
such additional documents, opinions, certificates or other instruments or
information as the Holder may from time to time request;
(e) The Company will use its best efforts to obtain and maintain all
of the permits, consents, authorisations and approvals which are necessary or
advisable to enable it to observe and perform the relevant terms and conditions
of this Note;
(f) The Company will not, without prior notice to the Holder, create,
assume, permit or suffer to exist any Lien on any of the Company's assets or
revenues; and
(g) The Company will not, without the prior written consent of the
Holder, (i) issue in excess of 100,000 shares of capital stock of any class
other than those issued on the date hereof or those Shares necessary to effect
the conversion of the principal amount of this Note in accordance with Section
1.1 hereof and such number of Shares as may be necessary to effect the
conversion of any accrued and unpaid interest on this Note in accordance with
Section 1.1 hereof, or (ii) undertake any stock split, reverse stock split,
recapitalization or stock dividend.
6. EVENTS OF DEFAULT; ACCELERATION
If one or more of the following events (each, an "Event of Default") shall
occur and be continuing:
(a) The Company shall have failed to pay when due any principal of or
interest on this Note or any other amount due hereunder, or
(b) Any representation or warranty made by the Company in this Note,
or in any statement made in any certificate, report or financial statement
furnished by the Company to the Holder, shall prove to have been materially
false or misleading when made in light of the circumstances in which it was
made; or
(c) The Company shall fail to perform or comply with any of the
covenants or provisions set forth in this Note which failure remains unremedied
for a period of 10 days after written notice thereof has been given to the
Company by the Holder; or
(d) The Company shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or all or a substantial part of its assets, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the United States Bankruptcy Code of 1978, as amended (as now or hereafter
in effect, the "Bankruptcy Code"), (iv) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganisation,
winding-up, or composition or readjustment of debts, (v)
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<PAGE> 6
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
Bankruptcy Code, or (vi) take any corporate action for the purpose of
effecting any of the foregoing; or
(e) A proceeding or case shall be commenced, without the application
or consent of the Company, in any court of competent jurisdiction, seeking
(i) its liquidation, reorganisation, dissolution or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of the Company or of
all or a substantial part of its assets, (iii) similar relief in respect of
the Company under any law relating to bankruptcy, insolvency,
reorganisation, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgement or
decree approving or ordering any of the foregoing shall be entered and
continue unstayed and in effect, for a period of 60 or more days; or any
order for relief against the Company shall be entered in an involuntary
case under the Bankruptcy Code.
7. MISCELLANEOUS
7.1 WAIVER
No failure on the part of the Holder to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power,
privilege or remedy under this Note shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power, privilege or remedy under
this Note preclude any other or further exercise thereof or the exercise of any
other right, power, privilege or remedy. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
7.2 NOTICES
All notices and other communications provided for herein (including,
without limitation, any modifications of, or waivers or consents under, this
Note) shall be given or made by facsimile or by hand in writing and transmitted
by facsimile, mailed or delivered to, in the case of the Company, its "Address
for Notices" specified below its name on the signature page hereof; and, in the
case of the Holder, c/o Amerscan, Inc., 3609 East Thousand Oaks Boulevard, Suite
209, Westlake Village, California 91362, USA, Attention: Mr. Martin S. Albert,
Telephone No. 805-371-7715, Fax No. 805-497-7154, or, as to any party, at such
other address as shall be designated by such party in a notice to the other
party. All such communications shall be deemed to have been duly given when
transmitted by facsimile or personally delivered in the manner described above
or, in the case of a mailed notice, upon receipt, in each case, given or
addressed as aforesaid.
7.3 EXPENSES
The Company agrees to pay or reimburse the Holder for (a) all reasonable
out-of-pocket costs and expenses of the Holder (including, without limitation,
the fees and expenses of counsel to the
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Holder) incurred prior to the Conversion Date in connection with any
amendment, supplement, modification or waiver of any of the terms of this Note,
(b) all costs and expenses of the Holder (including the fees and expenses of
counsel) in connection with any default or Event of Default and any enforcement
or collection proceedings resulting therefrom and (c) all Taxes levied by any
governmental or revenue authority in respect of this Note.
7.4 AMENDMENTS
This Note may be waived, amended or modified only by an instrument in
writing duly executed by the Company and the Holder. Any waiver, amendment or
modification effected in accordance with this Section 7.4 shall be binding upon
the Holder (and any securities into which this Note is convertible), each future
holder of all such securities and the Company.
7.5 SUCCESSORS AND ASSIGNS
This Note shall be binding upon, and inure to the benefit of, the Company
and the Holder and their respective successors and permitted assigns.
7.6 ASSIGNMENTS AND PARTICIPATIONS
The Company may not assign any of its rights or obligations under this Note
without the prior written consent of the Holder. The Holder may assign this
Note or sell a participation in this Note to any person or entity; provided that
any assignment of this Note shall only be made with the prior written consent of
the Company.
7.7 SURVIVAL
The obligations of the Company under Section 5(b) and Section 7.3 hereof
shall survive the repayment of the principal amount or the conversion of this
Note.
7.8 HEADINGS
The section headings appearing herein are included solely for convenience
of reference and are not intended to affect the interpretation of any provision
of this Note.
7.9 GOVERNING LAW; SUBMISSION TO JURISDICTION
This Note shall be governed by, and construed in accordance with, the laws
of the State of California, United States of America. The Company hereby
irrevocably submits to the non-exclusive jurisdiction of the United States
District Court for the Central District of California or any court of the State
of California located in the County of Los Angeles for the purposes of any
action, suit or proceeding arising out of or relating to this Note or any of the
transactions contemplated hereby or thereby. The Company irrevocably waives, to
the fullest extent permitted by applicable
7
<PAGE> 8
law, any objection which it may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
The Company hereby irrevocably consents to the service of any and all process in
connection with any such suit, action or proceeding by mailing copies of such
process to it at its address provided in Section 7.2 hereof. The Company agrees
that a final judgement in any such suit, action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the
judgement or in any other manner provided by law. Nothing in this Section 7.9
shall affect the right of the Holder to serve legal process in any other manner
permitted by law or affect the right of the Holder to bring any suit, action or
proceeding against the Company or its property in any other court or
jurisdiction.
7.10 SEVERABILITY
If one or more provisions of this Note are held to be unenforceable under
applicable law, such provision(s) shall be excluded from this Note and the
balance of the Note shall be interpreted as if such provision(s) were so
excluded and shall otherwise be enforceable in accordance with its terms.
8
<PAGE> 9
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed as
of the day and year first above written at El Segundo, California.
INTERNATIONAL META SYSTEMS, INC.
By /s/ George W. Smith
_____________________________
George W. Smith
Chief Executive Officer
Address for Notices
International Meta Systems, Inc.
100 North Sepulveda Boulevard
Suite 601
El Segundo, California 90245
USA
Attention: Chief Executive Officer
Tel. 310-524-9300
Fax. 310-524-9303
9
<PAGE> 10
Annex A
CONVERSION NOTICE
International Meta Systems, Inc.
100 North Sepulveda Boulevard
Suite 601
El Segundo, California 90245
USA
Attention: Chief Executive Officer
The undersigned hereby elects to convert the Convertible Promissory Note
dated December 5, 1997 in the principal amount of US$500,000 (the "Note")
pursuant to Section 1.1 of the Note into _____ of the shares of common stock of
International Meta Systems, Inc. (the "Company"). The Conversion Date shall be
______________.
The original Note, which shall be cancelled by the Company, accompanies
this Conversion Notice.
The undersigned hereby represents and warrants that the undersigned is
acquiring such shares of common stock for its own account for investment
purposes only, and not for resale or with a view to distribution of such shares
or any part thereof. Such shares should be registered in the name of Den Norske
Krigsforsikring for Skib.
By___________________
Name:
Title:
Date: _____________, 199__
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<PAGE> 1
Exhibit 2
AMENDMENT NO. 1 dated as of December 5, 1997 between INTERNATIONAL META SYSTEMS,
INC., a corporation duly organized and validly existing under the laws of the
State of Delaware, USA (as issuer of the Note referred to below, the "Company")
and DEN NORSKE KRIGSFORSIKRING FOR SKIB (as lender under the Note referred to
below, together with its successors and assigns in such capacity, the "Holder").
WHEREAS, the Company executed and delivered a convertible promissory note
in the principal sum of $500,000.00 dated December 5, 1997 (the "Note") in favor
of the Holder; and
WHEREAS, the parties wish to amend the Note to provide certain remedies
upon the occurrence of the events of default specified in the Note;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Section 1. Definitions. Unless otherwise defined herein, terms defined in
the Note are used herein as therein defined.
Section 2. Amendments. Subject to the execution and delivery by the parties
hereto of Amendment No. 1, but with effect on and after the date hereof, the
Note shall be amended as follows:
(a) The period at the end of Section 6(e) shall be deleted in its
entirety and replaced with a semicolon.
(b) The following paragraph shall be inserted after Section 6(e):
"Thereupon: (i) in the case of an Event of Default other than
one referred to in clause (d) or (e) above, the Holder may, by notice
to the Company, declare the principal amount then outstanding of, the
accrued interest on, and all other amounts due under, this Note to be
forthwith due and payable, whereupon such amounts shall be immediately
due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by
the Company; and (ii) in the case of the occurrence of an Event of
Default referred to in clause (d) or (e) above, the principal amount
then outstanding of, the accrued interest on, and all other amounts
due under, this Note shall automatically become immediately due and
payable without presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the Company."
Section 3. Representations and Warranties. The Company represents and
warrants to the Holder that (a) this Amendment No. 1 has been duly and validly
executed and delivered by the Company and constitutes the Company's legal, valid
and binding obligation, enforceable in accordance with its terms and (b) after
giving effect to this Amendment No. 1, (i) no Event of Default shall have
occurred and be continuing and (ii) the representation and warranties of the
<PAGE> 2
Company in the Note are true and correct on and as of the date hereof with the
same force and effect as if made on and as of such date (except to the extent
such representations and warranties relate to a specific date). Any breach by
the Company of its representations and warranties contained in this Section 3
shall be an Event of Default for all purposes of the Note.
Section 4. Document Otherwise Unchanged. Except as herein provided, the
Note shall remain unchanged and in full force and effect, and each reference to
the Note shall be a reference to the Note as amended hereby and as the same may
be further amended and in effect from time to time.
Section 5. Counterparts. This Amendment No. 1 may be executed by any
number of counterparts, each of which shall be identical and all of which, when
taken together, shall constitute on and the same instrument, and any party
hereto may execute this Amendment No. 1 by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed as of the day and year first above written.
INTERNATIONAL META SYSTEMS, INC.
/s/ George W. Smith
_____________________________
George W. Smith
Chief Executive Officer
DEN NORSKE KRIGSFORSIKRING FOR SKIB
By /s/ Ole Henrik Eide
______________________________
Ole Henrik Eide
Managing Director
By /s/ Tor Christiansen
______________________________
Tor Christiansen
Account Manager
