****NEWS RELEASE****
Simmonds extends TrackPower guarantee
Simmonds Capital Ltd SMM
Shares issued 19,551,951 Jun 29 close $0.82
Wed 30 Jun 99 News Release
Mr. David O'Kell reports
Simmonds Capital Ltd. has agreed to extend certain financial guarantees on
behalf of American Digital Communications Inc. for the TrackPower service.
Simmonds Capital has agreed to guarantee the obligations of American
Digital in its contract with EchoStar Communications Corporation for the
lease of satellite channels over a period of four years. In addition,
Simmonds Capital has extended a guarantee of financial support to American
Digital for its current fiscal year, which ends on Feb. 28, 2000. The
estimated maximum exposure under the guarantees is $4-million (U.S.) in the
first year and a total of $20-million (U.S.) over the four-year period.
As consideration for these guarantees, Simmonds Capital has received a
four-year warrant to purchase one million common shares of American Digital
at $2.50 (U.S.) per share. In addition, the $1.5-million (U.S.) contingent
earnout due to Simmonds Capital may be converted to 750,000 common shares
of American Digital once the earnout payment is due and payable.
John Simmonds, chief executive officer of Simmonds Capital, stated: "The
EchoStar broadcast distribution agreement significantly enhances the
distribution and exposure of the TrackPower service. Consequently, we
expect that TrackPower will be able to more quickly reach its break-even
subscriber levels. This reduces the risk for the guarantees, while
increasing the potential value of the American Digital warrants."
American Digital Communications, Inc. (OTCBB: ADCM) delivers high quality
live horseracing video to subscribers throughout the continental United
States.
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