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EXHIBIT 3(D)(1)
TERM LOAN AGREEMENT DATED SEPTEMBER 18, 1997
BY AND BETWEEN XXXX MANAGEMENT, INC. (BORROWER)
AND LASERMEDIA COMMUNICATIONS CORP. (LENDER)
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TERM LOAN AGREEMENT
THIS LOAN AGREEMENT made as of the 18th day of September 1997 between
XXXX MANAGEMENT INC., a company incorporated under the laws of the Province of
Ontario (hereinafter the "Borrower") and LASERMEDIA COMMUNICATIONS CORP., a
company incorporated under the laws of the Province of Ontario (hereinafter the
"Lender").
Principal amount: up to $250,000
Interest rate: 12% per annum
WHEREAS the Lender wishes to provide financial assistance to the
Borrower by advancing the Loan, as defined herein; and
WHEREAS the parties wish to enter into this Agreement in order to
formally set out their respective responsibilities and obligations;
NOW, THEREFORE, THIS AGREEMENT WITNESSES that in consideration of the
premises, the mutual covenants set out herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby irrevocably
acknowledged by each party hereto, the parties agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. Whenever used in this Agreement, unless there is
something in the subject matter or context inconsistent therewith, the following
words and terms shall have the respective meanings ascribed to them as follows:
(a) "Advance" means advances of the Loan by the Lender to the Borrower,
from time to time, pursuant to this Agreement;
(b) "Agreement" means this loan agreement and all schedules attached
thereto, as the same may be amended from time to time with the written consent
of all parties;
(c) "Business" means the business presently and heretofore carried on
by the Borrower;
(d) "Closing" means the closing of the Advances of the Loan by the
Lender to the Borrower as contemplated hereunder, to take place on such dates
and times as the parties hereto may agree;
(e) "Conditions Precedent" has the meaning assigned to that term in
Section 4.5;
(f) "Event of Default" has the meaning assigned to that term in Section
4.7;
(g) "Loan" means the principal amount of up to Two Hundred and Fifty
Thousand Dollars ($250,000.00) to be advanced by the Lender to the Borrower from
time to time as contemplated hereunder together with any accrued and unpaid
interest thereon;
(h) "Maturity Date" means September 18, 1998, or such other date as the
parties may mutually agree; and
(i) "Promissory Note" has the meaning assigned to that term in Section
4.5(a)(i).
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1.2 SCHEDULES. The following are the Schedules to this Agreement, each
of which is incorporated in this Agreement by reference and deemed to be part
thereof:
SCHEDULE DESCRIPTION
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A Form of Promissory Note
B Security and Pledge Agreement
1.3 CURRENCY. All statements of or reference to dollar amounts in this
Agreement shall mean lawful money of Canada, unless otherwise specified.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 BORROWER. The Borrower represents and warrants to the Lender as
follows and acknowledges that the Lender is relying on these representations and
warranties in connection with their performance pursuant to this Agreement:
2.2 (a) ORGANIZATION AND GOOD STANDING OF THE BORROWER. The
Borrower is duly incorporated and organized, validly existing and is up
to date in all of the corporate filings and registrations required
under the laws of Ontario;
(b) CORPORATE POWER AND AUTHORITY. The Borrower has all
necessary corporate power, authority and capacity to own and lease its
property and assets and to execute and deliver this Agreement and all
other documents contemplated hereby, and to carry out its obligations
hereunder;
(c) LITIGATION. There is no suit, action, litigation,
arbitration proceeding or governmental proceeding, including appeals
and applications for review, in progress, pending or threatened against
or relating to the Borrower or affecting its property or business which
might affect the property, business, future prospects or financial
condition of the Borrower and there is not presently outstanding
against the Borrower any judgement, decree, injunction, rule or order
of any court, governmental department, commission, agency,
instrumentality or arbitrator;
(d) COMPLIANCE WITH LAWS. The Borrower and its directors
and officers have complied with the requirements of all applicable
laws, decrees, regulations or similar enactments and orders of any
judicial, administrative, governmental or other authority or arbitrator
as same pertain to the Borrower; and
(e) AGREEMENT BINDING. This Agreement and each of the
documents contemplated hereby constitute legal, valid and binding
obligations of the Borrower enforceable in accordance with their terms.
ARTICLE 3
COVENANTS
3.1 COVENANTS OF THE BORROWER. The Borrower covenants and agrees that
as of and from the date hereof and until the date the Loan is repaid in full:
(a) CONDUCT OF BUSINESS. The business of the Borrower
will be conducted only in the ordinary course;
(b) DIVIDENDS ETC. No dividend or other distribution or
payment will be declared, set aside, paid or made on or in respect of
shares of the capital stock of the Borrower and the Borrower will not
directly or indirectly redeem, retire, purchase or otherwise acquire
any of such stock;
(c) UTILIZATION OF PROCEEDS. The proceeds of the Loan
will be utilized in the business of the Borrower;
(d) PAYMENT UNDER LOAN. The Borrower will punctually pay
the principal and the interest on the Loan when due;
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(e) PRESERVATION OF CORPORATE EXISTENCE ETC. The
Borrower will preserve and maintain its corporate existence, licenses,
rights, franchises and privileges in the jurisdiction of its
incorporation and will obtain all authorizations, consents, approvals,
orders, licenses, exemptions from registrations or qualifications from
any court, governmental department, public body, authority, commission,
board, bureau, agency or instrumentality that are necessary or
materially valuable in the operation of the Business;
(f) INSURANCE. The Borrower will maintain in force with
reputable insurers, coverage against risks of loss of or damage to its
properties, assets and business, of such type and in such amounts as is
customary in the case of companies of established reputation engaged in
the same or similar businesses;
(g) TAXES ETC. The Borrower will pay and discharge all
taxes, licenses and other fees, when due, except only such as are being
contested in good faith by appropriate proceedings but only if the
effect of such proceedings are to postpone the liability to pay such
tax and suitable reserves against such taxes are established and
maintained;
(h) LITIGATION. The Borrower will notify the Lender
promptly in the event that any material litigation is commenced or
contemplated against the Borrower or if any default occurs or is
anticipated under this Agreement;
(i) COMPLIANCE WITH LAWS. The Borrower will comply with
the requirements of all applicable laws, decrees, regulations or
similar enactments and orders of any judicial, administrative,
governmental or other authority or arbitrator; and
(j) NO SECURITY INTEREST EXCEPT TO A CHARTERED BANK. The
Borrower will not create or allow any of its subsidiaries to create or
permit any mortgage, charge, lien or other security interest in any or
all of its assets, whether on loans to the Borrower or otherwise,
except by way of a first fixed and floating charge (hereinafter the
"Fixed and Floating Charge") to and in favour of a Canadian chartered
bank by way of a general security agreement, should the Borrower be
able to arrange such a loan from a Canadian chartered bank during the
term of this Loan (the "Bank Security").
ARTICLE 4
LOAN TO THE BORROWER
4.1 LOAN. Relying on the representations, warranties and covenants
set forth herein and subject to the other provisions of this Agreement, the
Lender agrees to Advance to the Borrower, from time to time, by way of the Loan,
the principal sum, in the aggregate of up to Two Hundred and Fifty Thousand
Dollars ($250,000.00).
4.2 INTEREST. The Loan will bear interest at an annual rate of
interest equal to twelve percent (12%) per annum, calculated annually from the
date of each Advance and payable both before and aider default, maturity and
judgment.
4.3 REPAYMENT. The Loan shall be repayable on or before the
Maturity Date.
4.4 PREPAYMENT. The Borrower may prepay the Loan from time to time
in whole or in part without penalty, notice or bonus.
4.5 CONDITIONS PRECEDENT. The Lender's obligation to advance the
Loan is subject to the satisfaction of the following conditions precedent (the
"Conditions Precedent") at the time of any Advance (each of which is hereby
acknowledged to be inserted for the exclusive benefit of the Lender and may be
waived by it in whole or in part):
(a) The following documents, duly executed, shall have
been delivered to the Lender:
(i) grid promissory note (the "Promissory Note")
issued by the Borrower in favour of the Lender substantially
in the form of the promissory note attached hereto as Schedule
A.
(ii) pledge and security agreement (the "Pledge
and Security Agreement") substantially in the form attached
hereto as Schedule B.
(b) All of the representations and warranties of the
Borrower set forth in Article 11 hereof shall be in all material
respects true and correct, on and as of the time of Closing and all
covenants to have been performed or satisfied at or before the Closing
shall have been so performed or satisfied.
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4.6 PROMISSORY NOTE. The debts, liabilities and obligations of the
Borrower to the Lender arising pursuant to or in connection with the Loan shall
be evidenced by the Promissory Note substantially in the form as attached hereto
as Schedule A. The Borrower shall, and is hereby unconditionally and absolutely
authorized and directed by the Lender to, record on the Promissory Note, all
Advances and payments hereunder. Such notations, in the absence of manifest
mathematical error, shall be prima facie evidence of such Advances and payments,
but failure to record a transaction will not affect its validity.
4.7 ESCALATION OF PAYMENT DATE OF THE LOAN. If any of the
following events or circumstances ("Events of Default") occur, the Lender may,
at its option, declare the Loan immediately due and payable and declare the
unutilized portion (if any) of the Loan to be terminated (in which case the
Lender shall not be required to make any further Advances), and take such other
actions as may be permitted at law or in equity, namely:
(a) if the Borrower fails to pay any amount of principal
or interest on the Loan when due;
(b) if any representation or warranty contained in or
provided for by this Agreement shall be found false or incorrect or
lacking in any material facts so as to make it materially misleading;
(c) if the Borrower defaults in the performance of any
term, condition or covenant contained in this Agreement, in the
Promissory Note, or in any other document or agreement delivered in
connection with the transactions contemplated by this Agreement and has
not remedied same within fifteen (15) days after the Lender has given
written notice to the Borrower of such default;
(d) if the Borrower shall take any voluntary action in
respect of liquidation, bankruptcy or winding-up or an assignment for
benefit of creditors under the laws of any applicable jurisdiction or
shall otherwise become insolvent; or
(e) if the Borrower sells, leases or exchanges all or
substantially all of its property other than in the ordinary course of
business.
4.8 PRESENTMENT, ETC. The Borrower hereby waives presentment and
demand for payment, protest and notice of protest and non-payment and agrees
that its liability on this note shall not be affected by any renewal or
extension in the time for payment hereof or by any indulgences and hereby
consents to any and all renewals, extensions or indulgences. Any waiver of
rights by the Lender hereunder must be in writing and the failure of the Lender
to exercise any of its rights hereunder in any specific instance shall not
constitute a waiver thereof in any other instance.
4.9 CONSENT TO BANK SECURITY. The Lender hereby consents to the
creation of the Bank Security, from time to time, as provided for in Section
3.1(j).
ARTICLE 5
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each statement of
fact contained in this Agreement or in any document or certificate given under
this Agreement or any Schedule hereto be any of the parties hereto shall be
deemed a representation and warranty herein. All covenants, agreements,
representations and warranties of the parties hereto contained in this
Agreement, or contained in any document or certificate given under this
Agreement, shall be true at and as of the time of the Closing and shall survive
the Closing and shall continue in full force and effect for the benefit of the
parties hereto.
ARTICLE 6
SECURITY
6.1 SECURITY AGREEMENT. The Borrower shall furnish, execute and
deliver to the Lender in form and substance satisfactory to the Lender the
pledge and security agreement in the form attached hereto as Schedule B.
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ARTICLE 7
GENERAL
7.1 TIME OF ESSENCE. Time shall be of the essence of this
Agreement.
7.2 APPLICABLE LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the Province of Ontario. The parties
hereto hereby irrevocably attorn to the exclusive jurisdiction of the courts of
Ontario and acknowledge the competence, convenience and propriety; of such venue
and agree to be bound by any judgement thereof and not to seek and hereby waive
any review of its merits by the courts of any other jurisdiction.
7.3 NOTICES. Any notice or other communication required or
permitted to be given to a party hereunder or for the purposes hereof shall be
in writing and shall be sufficiently given if delivered personally to the party,
or if sent by prepaid registered mail, courier, telex or telecopier, addressed
to the party:
(a) in case of notice to the Borrower as follows:
Xxxx Management, Inc.
00 Xx. Xxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X IK6
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) in case of notice to the Lender as follows:
Lasermedia Communications Corp.
00 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or at such other address as the party to whom such notice or other communication
is to be given shall have last notified the party given the same in the manner
provided in this Section. Any notice or other communication mailed as aforesaid
shall be deemed to have been given and received on the tenth (10th) business day
next following the date of its mailing. Any notice or other communication
delivered personally or sent by courier to a party hereto shall be deemed to
have been given and received on the day it is received, provided that if such
day is not a business day then the notice or other communication shall be deemed
to have been given and received on the business day next following such day. Any
notice or other communication sent by telex or telecopier shall be deemed to
have been given and received on the day it was sent if such day was a business
day in the place of receipt, provided that if it was not a business day in such
place, it shall be deemed to have been given and received the next following
business day. In the event of a threatened or actual postal disruption, all
notices or other communications shall be delivered personally or sent by
courier, telex or telecopier.
7.4 HEADINGS. The headings in this Agreement are inserted for
convenience of reference only and shall not affect the interpretation hereof.
7.5 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements and
undertakings, oral or written' by and between any of the parties hereto with
respect to the subject matter hereof.
7.6 COUNTERPARTS. This Agreement may be executed by the 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.
7.7 ASSIGNMENT. This Agreement shall not be assigned by either
party without the prior written consent of the other party.
7.8 SUCCESSORS. This Agreement shall enure to the benefit of and
be binding on the successors and permitted assigns of the respective parties
hereto.
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7.9 NON-WAIVER. The various rights, remedies, options and
elections of the parties hereto contained in this Agreement are cumulative and
the failure of any party to enforce strict performance by another park of its
obligations to be performed hereunder, or to exercise any option or election or
to have recourse to any remedy shall not be construed or deemed to be a waiver
or relinquishment for the future by the said party of any such condition,
covenant, option, election or remedy but shall continue in full force and
effect.
7.10 FURTHER ASSURANCES. The parties hereto undertake to sign and
complete all such deeds, documents, resolutions, minutes and other instruments
and to do all acts as are necessary to give full effect to this Agreement.
IN WITNESS WHEREOF the parties hereto have hereunto duly executed this
Agreement on the date first above written.
XXXX MANAGEMENT INC.
By:
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Name:
------------------------
Title:
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LASERMEDIA COMMUNICATIONS CORP.
By:
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Name:
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Title:
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GRID ATTACHED TO PROMISSORY NOTE
DATED AS OF THE 18TH DAY OF SEPTEMBER, 1997
MADE BY LASERMEDIA COMMUNICATIONS CORP. IN FAVOUR OF
XXXX MANAGEMENT INC.
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PRINCIPAL AMOUNT OF AMOUNT OF PRINCIPAL UNPAID PRINCIPAL
NO. DATE ADVANCE REPAID BALANCE
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The aggregate unpaid principal amount shown on this grid shall be rebuttable
presumptive evidence of the principal amount owing and unpaid on this promissory
note. The failure to record the date and amount of any loan on this grid shall
not, however, limit or otherwise affect the obligations of Xxxx Management Inc.
under the Loan Agreement or under this Note to repay the principal amount of the
loan made to Xxxx Management Inc. by Lasermedia Communications Corp., together
with all interest accrued and unpaid thereon.
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SCHEDULE "B"
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