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EXHIBIT 3(D)(2)
PLEDGE AND SECURITY AGREEMENT DATED SEPTEMBER 18, 1997
BY AND BETWEEN XXXX MANAGEMENT, INC. (BORROWER) AND
LASERMEDIA COMMUNICATIONS CORP. (LENDER)
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PLEDGE AND SECURITY AGREEMENT
THIS AGREEMENT made this 18th day of September, 1997, between XXXX
MANAGEMENT, INC., a company incorporated under the laws of the Province of
Ontario (hereinafter called the "Borrower") and LASERMEDIA COMMUNICATIONS CORP.,
a company incorporated under the laws of the Province of Ontario (hereinafter
called the "Lender").
WHEREAS the Borrower is the owner common shares in the capital of
Lasermedia Communications Corp. (the "Corporation") as described in Schedule "A"
hereto (the "Shares"); and
WHEREAS the Borrower has agreed to create a security interest in the
Shares in favor of the Lender to secure the payment and fulfillment of the debts
liabilities and obligations of the Borrower to the Lender pursuant to the terms
of a loan agreement dated the 18th day of September, 1997 between the Borrower
and the Lender (the "Loan Agreement");
NOW, THEREFORE this Agreement witnesses as follows:
1. PLEDGE. The Borrower assigns, transfers, pledges,
hypothecates, charges and creates a security interest in the Shares and any
renewals thereof, substitutions therefore and proceeds thereof and all interest,
dividends (including stock dividends and dividends consisting of securities),
income and revenue therefrom (collectively, the "Collateral") to and in favor of
the Lender as general and continuing collateral security for the payment and
fulfillment of all debts, liabilities and obligations of the Borrower to the
Lender (the "Indebtedness") pursuant to the Loan Agreement.
2. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Lender that:
(a) it is the beneficial owner of the Shares and it has
good right and authority to create the security interest in favor of
the Lender as herein provided, and that the Collateral is free and
clear of any other lien, mortgage, pledge, charge, encumbrance or
security interest of any nature or kind whatsoever; and
(b) it has full power, authority and legal right to
pledge all the Shares pursuant to this Agreement;
(c) this Agreement constitutes a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject to applicable bankruptcy, insolvency
and other laws affecting the enforcement of creditors' rights generally
and subject to the fact that equitable remedies may only be granted in
the discretion of a court of competent jurisdiction;
(d) no consent of any other party (including, without
limitation, creditors of the Borrower) and no consent, license, permit,
approval or authorization of, exemption by registration or filing with
any governmental authority, domestic or foreign, is required to be
obtained by the Borrower in connection with the execution, delivery or
performance of this Agreement;
(e) the execution, delivery and performance of this
Agreement by the Borrower will not violate any provisions of any
applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or governmental authority, domestic or
foreign, or of any mortgage, indenture, lease, contract or other
agreement, instrument or undertaking to which the Borrower is a party
or which purports to be binding upon the Borrower; and
(f) the pledge, assignment and delivery of the Shares
pursuant to this Agreement creates a valid first priority lien on and a
first perfected security in the Shares, subject to no prior pledge,
lien, mortgage, hypothecation, security interest, charge, option or
encumbrance (other than statutory liens which may rank prior to the
lien and security interest created hereby) nor to any agreement
purporting to grant to any third party a security interest in the
property or assets of the Borrower that would include the Shares.
The Borrower covenants and agrees that it will defend the Lender's
right, title and security interest in and to the Shares and the proceeds thereof
against the claims and demands of all persons whomsoever; and covenants and
agrees that it will have like title to and right to pledge any other property at
any time hereafter pledged to the Lender hereunder and will likewise defend the
Lender's right thereto and security interest therein.
3. LENDER'S RIGHTS AND POWERS. In the event of the Borrower's
failure to pay or otherwise satisfy the Indebtedness, the Lender, or any nominee
or nominees thereof may:
(a) exercise all voting and other rights attached to the
Shares and receive all dividends, interest, and other moneys payable in
respect of the Shares:
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(b) subject to compliance with the Personal Property
Security Act (Ontario), sell at public or private sale or otherwise
realize upon all or any of the Shares for such price in money or other
consideration as the Lender may deem best, the whole without
advertisement or notice to the Borrower; and/or
(c) exercise all rights and remedies of a secured party
under the Personal Property Security Act (Ontario).
4. REGISTRATION OF SHARES. The Lender shall be entitled to cause
the Shares to be transferred into the name of any nominee or nominees designated
by it and to be registered in such name or names on the books of the
Corporation.
5. RENEWALS AND EXTENSIONS. The Lender may grant time, renewals,
extensions, indulgences, releases and discharges to, take securities (which word
as used herein includes guarantees) from and give the same and any or all
existing securities up, abstain from taking securities from or from perfecting
securities of, cease or refrain from giving credit or making loans or advances
to, accept compositions from and otherwise deal with, the Borrower, the
Corporation and others and with all securities as the Lender may see fit, and
may apply all monies at any time received from the Borrower or others or from
securities upon such part of the Indebtedness as the Lender may see fit, and may
apply all monies at any time received from the Borrower or others or from
securities upon such part of the Indebtedness as the Lender deems best and
change any such application in whole or in part from time to time as the Lender
may see fit, the whole without in any way limiting or lessening the liability of
the Borrower hereunder and no loss of or in respect of any securities received
by the Lender from the Borrower, the Corporation or others, whether occasioned
by the fault of the Lender or otherwise, shall in any limit or lessen the
liability of the Borrower hereunder.
6. RECOURSE. The Lender shall not be bound to exhaust his
recourse against the Corporation or others or any securities it may at any time
hold before being entitled to exercise its rights hereunder.
7. CORPORATE CHANGES. This agreement shall not be affected by any
change in the name of the Corporation, by any change whatsoever in the objects,
capital structure or constitution of the Corporation or by the Corporation's
business being amalgamated with another corporation, but shall notwithstanding
the happening of any such event continue to apply to all the Indebtedness. All
payments received by the Lender from the Borrower or from others shall be
regarded for all purposes as payments in gross without any right on the part of
the Borrower to claim a reduction of his liability hereunder and the Borrower
shall have no right to be subrogated to any rights of the Lender until the
Lender shall have received payment in full of the Indebtedness.
8. ADDITIONAL SECURITY. The security provided for herein is in
addition to and not in substitution for any other security now or hereafter held
by the Lender and shall not operate as a merger of any simple contract debt, or
suspend the fulfillment or affect the rights, remedies or powers of the Lender
in respect of any present or future debts, liabilities or obligations of the
Borrower to the Lender or any securities held by the Lender for the fulfillment
thereof:
9. LENDER ABSOLVED. The Lender is hereby released from all
responsibility for any depreciation in or loss of value of the Collateral.
10. SUBDIVISION, CONSOLIDATION. ETC. If at any time or from time
to time
(a) the Shares are subdivided, consolidated, changed,
converted or reclassified, or
(b) the Corporation is reorganized or amalgamated with
another corporation or any other event occurs which results in the
substitution or exchange of the Shares for, or the conversion of the
Shares into, other shares or other securities.
then, in any such event, the other shares or other securities resulting
therefrom shall constitute the Shares for the purposes of this Agreement.
11. FURTHER ASSURANCES. The Borrower will execute and deliver such
further and other documents, and will do or cause to be done all such acts and
things, as may be necessary or desirable to give full effect to this agreement.
12. HEADINGS. The headings contained in this agreement are for
convenience of reference only and in no way affect the interpretation of this
agreement.
13. GOVERNING LAW. This agreement shall be governed by the laws of
the Province of Ontario and the laws of Canada applicable therein and shall be
treated in all respects as an Ontario contract.
14. ATTACHMENT. The security interest created hereby is intended
to attach when this agreement is signed by the Borrower and delivered to the
Lender. The Borrower acknowledges receipt of a copy of this agreement.
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15. BENEFIT OF AGREEMENT. This agreement shall enure to the
benefit of and be binding upon the Borrower and the Lender and their respective
successors and assigns.
16. COUNTERPARTS. This agreement may be executed by parties hereto
in separate counterparts each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the
same instrument.
IN WITNESS WHEREOF the parties have executed this agreement as of the
day and year first above written.
XXXX MANAGEMENT, INC.
By:
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Name:
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Title:
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LASERMEDIA COMMUNICATIONS CORP.
By:
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Name:
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Title:
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SCHEDULE A
PLEDGED SECURITIES
NUMBER AND
CERTIFICATE NUMBER NAME OF ISSUER TYPE OF SECURITY
A-1
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A-2
