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EXHIBIT 4.4
SHOWSCAN ENTERTAINMENT INC.
CULVER CITY, CALIFORNIA, U.S.A.
USD 7'000'000.--
8% CONVERTIBLE NOTES
DUE SEPTEMBER 1, 1999
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PLEDGE/SECURITY AGREEMENT
SEPTEMBER 1, 1995
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PLEDGE/SECURITY AGREEMENT
on all existing assets of
Showscan Entertainment Inc. as per September 1, 1995
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THIS PLEDGE/SECURITY AGREEMENT ("Pledge Agreement") is made and entered into
effective September 1, 1995, by and among Showscan Entertainment Inc., a
Delaware corporation ("Pledgor") and Banca del Gottardo ("Bank"), with respect
to the following facts:
A. Pledgor and Bank are parties to that certain Note Purchase, Paying and
Conversion Agency Agreement dated as of August 14, 1995 ("Agreement").
B. Pursuant to the Agreement, Pledgor has issued to Bank USD 7'000'000.--
8% Convertible Notes of 1995 due September 1, 1999 ("Notes").
C. The Pledgor has undertaken to grant Bank a security interest with respect
to all of the existing tangible and intangible properties assets and rights
of the Pledgor, for the purpose of providing collateral security in respect
of Notes issued by Pledgor under the Agreement.
Pledgor represents and warrants that as of the date hereof the Collateral
as defined herein is unencumbered, i.e. not pledged or otherwise subject to
any lien (other than (i) liens incurred in the ordinary course of business
as, for example, installment payment purchases of equipment or other assets
used in Pledgor's business and (ii) liens described on Schedule A) granted
to third parties.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements
and covenants hereinafter contained, the parties hereto agree as follows:
1. Assignment of Collateral. As security for the due and punctual payment and
performance of all of the covenants and obligations of Pledgor under the
Notes and the Agreement, Pledgor hereby assigns and pledges to Bank and
hereby grants a security interest in favor of Bank in all of Pledgor's
right, title and interest in and to all of the following, whether now or
hereafter existing or in which Pledgor now has or hereafter acquires an
interest
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and wherever the same may be located (collectively, the "Collateral"):
(1) all equipment in all of its forms, and all parts thereof and all accessions
thereto; (2) all inventory in all of its forms, and all additions and
accessions thereto and replacements and products thereof; (3) all rights and
claims to the payment or receipt of money or other forms of consideration of
any kind, including, but not limited to, any and all such rights and claims in,
to and under, all accounts, accounts receivable, contracts, contract rights,
chattel paper, instruments, general intangibles, guaranties, letters of credit,
documents, drafts, acceptances, tax refunds, rights to performance, and any
judgments taken on any rights or claims otherwise included in this clause (3)
and all rights in, to and under all security agreements, leases and other
contracts securing or otherwise relating to any such rights and claims to the
payment or receipt of money or other forms of consideration; (4) all books,
records, ledger cards, files, correspondence, computer programs, tapes, disks
and related data processing software that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon; (5) all fixtures,
storage and office facilities, and all additions and accessions thereto and
replacements thereof and products thereof; (6) all trademarks, trademark
applications, tradenames, trade secrets, business names, patents, patent
applications, licenses, copyrights, copyright applications, computer programs,
software, registrations and franchise rights, and, in each case, all goodwill
associated therewith; (7) all cash and all deposit accounts; and (8) all
proceeds and products of any and all of the foregoing and, to the extent not
otherwise included, all payments under insurance, or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing; provided, nevertheless, that the term "Collateral" shall
not include (i) any right, title and interest of Pledgor in and to the capital
stock of any subsidiary and proceeds thereof and (ii) any right, title and
interest of Pledgor in and to all films, motion pictures or videos developed
(or in development), produced, distributed or obtained for distribution by
Pledgor (directly or indirectly) for release in any medium, whether now known
or hereafter devised (the "Films"), including the scenario, screenplay or
script upon which they are based, at every stage of development, whether
preliminary, in process or in final form and whether or not used in whole or in
part in or as the basis of such Films; all property and rights related thereto,
whether tangible or intangible and whether now in existence or hereafter made
or produced, and whether or not in the possession of Pledgor including, without
limitation, all copyrights, rights under copyrights and copyright applications
and all physical properties relating to a Film including, without limitation,
films, prints, negatives, positives and the like; all collateral, allied,
ancillary, subsidiary and merchandising rights therein, and all properties
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and things of value pertaining thereto and all products and proceeds
thereof whether now in existence or hereafter made, acquired or produced.
For purposes of this Pledge Agreement, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are sold,
collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without limitation, all rights to
payment, including returned premiums, with respect to any insurance
relating thereto.
Concurrent herewith, Pledgor shall deliver the certified copy of a
resolution duly adopted by the Board of Directors of the Pledgor signed by
a duly authorized Officer of the Pledgor, conferring the necessary
authority upon the person(s) signing the Pledge Agreement.
2. Compromise of Claims. Bank may compromise or settle, at Pledgor's expense,
any claim which may materially adversely affect Bank's interest in, or
rights hereunder with respect to the Collateral, provided that Bank shall
first deliver written notice to Pledgor of its intention to so compromise
or settle such claim and Pledgor does not cure such claim within 30 days of
receipt of such notice.
3. Financing Statement. At the request of Bank, Pledgor will join in
executing, or will execute as appropriate, all necessary financing
statements in a form satisfactory to Bank, and will pay the cost of filing
such statements. Pledgor will execute all other instruments reasonably
deemed necessary by Bank and pay the cost of filing such documents. Pledgor
warrants that no financing statement covering the Collateral or any part
thereof, or any proceeds thereof, is presently on file in any public office
except as set forth on Schedule A hereto.
4. Alienation of Collateral. Pledgor will not, without the written consent of
Bank, sell, contract to sell, lease, encumber, or otherwise dispose of the
Collateral or any interest therein until this Pledge Agreement and all
debts secured thereby have been fully satisfied, except: (i) in the
ordinary course of Pledgor's business, and (ii) with respect to any of the
Collateral or interest therein with a value (as determined by Pledgor's
Board of Directors) not exceeding USD 250'000.00 in the aggregate.
5. Release of Collateral. Bank agrees that upon the payment in full of the
principal and interest on the Notes or the conversion of the Notes into
common stock of Pledgor in accordance with the terms thereof, the Bank
shall immediately release to Pledgor the
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Collateral. The released Collateral shall immediately be delivered to
Pledgor free and clear of this Pledge Agreement and any and all liens
created hereby shall terminate and the Collateral then remaining and not
previously applied against such obligations as provided herein held by Bank
shall be promptly returned to Pledgor. Upon such release and termination,
Bank will, at Pledgor's expense, execute and deliver to Pledgor such
documents (including, without limitation, UCC termination statements) as
Pledgor shall reasonably request to evidence the termination of the liens
created hereby and the release of the Collateral. Bank shall not be deemed
to have made any representation or warranty with respect to any Collateral
so delivered, except that such Collateral is free and clear, on the date of
delivery, of any and all liens, charges and encumbrances arising from its
own acts.
6. Protection of Collateral. Pledgor shall keep the Collateral in good order
and repair; Pledgor shall not waste or destroy the Collateral or any
material part thereof; and Pledgor shall not use Collateral in violation in
any material respect of any statute or ordinance. Bank shall have the right
to examine and inspect the Collateral at any reasonable time upon five days
prior written notice to Pledgor.
7. Remedies.
7.1. In addition to having the right to exercise any right or remedy of a
secured party upon default under applicable law, Bank shall have the
right to, to the extent permitted by law, without being required to
give any notice to Pledgor except as provided below:
Sell the Collateral without any formalities (in particular without
the formalities prescribed by the Swiss Federal Debt Collection and
Bankruptcy Act), or any part thereof, at public or private sale for
cash, upon credit or for future delivery, and at such price or prices
as Bank may deem best, and Bank may (except as otherwise provided by
law) be the purchaser of any or all of the Collateral so sold and
thereafter may hold the same, absolutely, free from any right or
claim of whatsoever kind; upon any such sale, Bank shall have the
right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale, shall hold the
property sold, absolutely, free from any claim or right of whatsoever
kind, including any equity or right of redemption, of Pledgor, who
hereby specifically waives all rights of redemption, stay or
appraisal which it has or
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may have under any rule of law or statute now existing or hereafter
adopted. Bank shall give Pledgor not less than 10 days' written
notice of its intention to make any such public or private sale. Such
notice, in case of public sale, shall state the time and place fixed
for such sale. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as
Bank may fix in the notice of such sale. At any sale the Collateral
may be sold in whole or in part, as Bank may determine. Bank shall
not be obligated to make any sale pursuant to any such notice. Bank
may, without notice or publication, adjourn any sale or cause the
same to be adjourned from time to time by announcement at the time
and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale
of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by Bank until the
selling price is paid by the purchaser thereof, but Bank shall not
incur any liability in case of the failure of such purchaser to take
up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. Bank may
be the purchaser of any or all of the Collateral so sold and hold the
same thereafter in its own right, free from any claim of Pledgor or
right of redemption. At any such sale Bank shall be entitled to apply
the unpaid principal balance and, accrued interest on the Notes
toward the payment of the purchase price, or any part thereof.
7.2. On any sale of the Collateral, Bank is hereby authorized to comply
with any limitation or restriction in connection with such sale that
it may be advised by counsel is necessary in order to avoid any
violation of applicable law or in order to obtain any required
approval of the purchaser or purchasers by any governmental
regulatory authority or officer or court. Compliance with the
foregoing procedures shall result in such sale or disposition being
considered or deemed to have been made in a commercially reasonable
manner. The rights and remedies specified in this Pledge Agreement
are cumulative and may be exercised from time to time in accordance
with applicable law and as often as Bank deems advisable. No failure
to exercise or delay in the exercise of any right or remedy by Bank
shall constitute a waiver of any such right or remedy.
Notwithstanding the occurence of an Event of Default (as defined in
the Agreement), nothing in this Pledge Agreement shall be deemed to
impose upon Bank any obligation to exercise any remedy hereunder.
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7.3. The proceeds of any sale of all or any part of the Collateral
pursuant to this paragraph 7, together with all other moneys and
property held as or received by Bank on or in respect of the
Collateral shall be applied by Bank in the following order of
priority:
FIRST, to the payment of all reasonable costs and expenses of such
sale, including reasonable compensation to Bank and its agents and
counsel, and all expenses, liabilities and advances made or incurred
by Bank in connection therewith;
SECOND, to the payment of the principal of, and interest on, the
Notes; and
THIRD, to the payment of any surplus then remaining from such
proceeds to Pledgor, or otherwise as a court of competent
jurisdiction may direct.
7.4. Following the sale of any or all of the Collateral as provided
herein, Pledgor shall have no rights to the sold Collateral or the
proceeds from such sale.
8. Notices. Any and all notices, demands or other communications required or
desired to be given hereunder by any party shall be in writing and shall be
validly given or made to another party if given by telex (in the case of
Bank), facsimile, telegram if addressed as set forth below. Such notice,
demand or other communication shall be conclusively deemed made at the time
of such delivery.
To Bank: BANCA DEL GOTTARDO
Xxxxx Xxxxxxx Xxxxxxxxx 0
0000 Xxxxxx, Xxxxxxxxxxx
Attention: Capital Market Department
Telex: No: 841 052
Facsimile: 0114191 281 843
To Pledgor: SHOWSCAN ENTERTAINMENT INC.
0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxxxxxx 00000-0000, U.S.A.
Attention: Xxxxxxx X. Xxxxx
President and Chief Executive Officer
Facsimile: (310) 000-00 00
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copies to:
X. Xxxxxx Lemon
Vice President and General Counsel
Facsimile: (310) 000-00 00
Xxxxxx Xxxx
Executive Vice President and Chief Financial Officer
Facsimile: (310) 000-00 00
Any party hereto may change its address for the purpose of receiving
notices, demands and other communication as herein provided by a written
notice given in the manner aforesaid to the other party or parties hereto.
9. Amendment. No amendment, change or modification of this document shall be
valid unless in writing and signed by all of the parties hereto.
10. Counterparts. This Pledge Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11. Applicable Law and Jurisdiction. This Pledge Agreement shall be governed by
and construed in accordance with the laws of the State of California. Any
dispute which might arise between Bank on the one hand and Pledgor on the
other hand regarding this Pledge Agreement shall fall within the
jurisdiction of the Superior Court of Central Los Angeles County,
California and/or the United States District Court for the Central District
of California, with the right to appeal to the state and/or federal
appellate Courts.
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In Witness Whereof, the parties have executed this Pledge Agreement at
Xxxxxx City as of the day and year first above written.
SHOWSCAN ENTERTAINMENT INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
President
BANCA DEL GOTTARDO
By: /s/ Xxxxx Xxxxxxx
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/s/ Xxxxxxxxx Xxxxxxxx
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Schedule A
to the Pledge/Security Agreement
dated September 1, 1995
Financing Statement on Form UCC-1 bearing file No. 92199259, made by Showscan
Corporation in favor of Copelco Credit Corporation filed on September 14, 1992
with the California Secretary of State with respect to one Ricoh photocopier.
