EXHIBIT 4.14
FORM OF GENERAL SECURITY AGREEMENT
THIS AGREEMENT made as of the 7th day of February, 2003.
BY:
[Name of guarantor Debtor], a company [incorporated/continued] under the laws of
[jurisdiction], having its chief executive office at 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0
(the "DEBTOR")
IN FAVOUR OF:
BANK OF AMERICA, N.A., a duly constituted bank, having a place of business at
000 Xxxxx Xxxxxx, 00xx floor, in the City of Xxx Xxxxxxx, Xxxxxxxxxx, 00000, and
at 000 Xxxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx, X0X 0X0, for itself and
as agent for the Lenders under and as defined ina credit agreement dated as of
February 7th, 2003 among Sun Media Corporation, as Borrower, the financial
institutions named on the signature pages thereto, as Lenders, and the Agent, as
Administrative Agent (as same may subsequently be amended, amended and restated,
modified, supplemented or replaced from time to time, the "CREDIT AGREEMENT")
(the "SECURED PARTY")
WITNESSES THAT IN CONSIDERATION of the sum of $1.00 in lawful money of Canada
now paid by the Secured Party to the Debtor and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the Debtor agrees with the Secured Party as follows:
ARTICLE 1 - INTERPRETATION
1.1 DEFINITIONS
In this agreement and in any amendments hereto, unless the context
otherwise requires, capitalized terms not otherwise defined have the
meaning ascribed thereto in the Credit Agreement, and the following
terms have the meaning ascribed thereto as follows:
(a) "BUSINESS DAY" means a day (other than a Saturday or Sunday)
on which chartered banks are open for business during normal
banking hours in Toronto, Ontario;
(b) "COLLATERAL" means all personal property and assets now owned
or hereafter acquired by the Debtor, wheresoever located,
including, without limitation, the property and assets of the
Debtor referred to in section 2.1; provided always that
-2-
the term "COLLATERAL" when used herein shall not include any
consumer goods of the Debtor. Any reference to "COLLATERAL"
herein shall be deemed to be a reference to the Collateral or
any part thereof;
(c) "EVENT OF DEFAULT" has the meaning ascribed thereto in section
3.1;
(d) "OBLIGATIONS" means all obligations of the Debtor under
[ ];
(E) "PPSA" means the PERSONAL PROPERTY SECURITY ACT (Ontario) as
the same may from time to time hereafter be amended or any
legislation that may be substituted therefor as the same may
from time to time be amended;
(f) "SECURITY INTEREST" means collectively the mortgage, charge,
pledge, assignment and transfer of, and the security interest
in, the Collateral granted to the Secured Party by the Debtor
pursuant to section 2.1; and
(g) "THIS AGREEMENT", "HEREOF", "HEREIN", "HERETO" and like
references refer to this general security agreement and any
schedules, exhibits or appendices hereto and not to any
particular Article, section or other subdivision of this
general security agreement.
1.2 TERMS DEFINED BY THE PPSA
Unless there is something in the context or subject matter inconsistent
therewith, words and phrases not otherwise herein defined that are
defined in the PPSA shall have the meanings ascribed thereto
respectively by the PPSA.
1.3 HEADINGS
The division of this agreement into Articles and sections and the
insertion of headings herein are for convenience of reference only and
shall not affect the construction or interpretation hereof.
1.4 NUMBER AND GENDER
In this agreement, where the context so requires, words importing the
singular number shall include the plural and vice versa, words
importing any gender shall include all genders (including the neuter),
and words importing persons shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations.
1.5 CURRENCY
Unless otherwise specified herein, all statements of or references to
dollar amounts in this agreement shall mean lawful money of Canada.
-3-
1.6 PROHIBITED PROVISIONS
If any provision herein is determined to be void, voidable or
unenforceable, in whole or in part, such determination shall not affect
or impair or be deemed to affect or impair the validity of any other
provision hereof and all the provisions hereof are hereby declared to
be separate, severable and distinct.
1.7 APPLICABLE LAW AND ATTORNMENT CLAUSE
This agreement and all documents delivered pursuant hereto shall be
governed by and construed in accordance with the laws of the Province
of Ontario and the federal laws of Canada applicable therein, and the
parties hereby attorn to the non-exclusive jurisdiction of the courts
of the Province of Ontario and to any courts from which an appeal of
the decisions of such court may be taken.
ARTICLE 2 - CREATION AND ATTACHMENT OF SECURITY INTEREST
2.1 GRANT OF SECURITY INTEREST AND DESCRIPTION OF CERTAIN
COLLATERAL
As continuing collateral security for the due and timely payment and
performance by the Debtor of the Obligations, the Debtor hereby
mortgages, charges, pledges, assigns, transfers and sets over to the
Secured Party, and grants to the Secured Party a general and continuing
security interest in, the Collateral, which shall include but not be
limited to:
(A) ACCOUNTS: all accounts, debts, amounts, claims, choses in
action and moneys which now are, or which may at any time
hereafter become, due or owing to or owned by the Debtor,
whether or not earned by performance, including without
limitation any and all accounts receivable arising or
resulting from the sale, lease, use, assignment or other
disposition of any property described in this section 2.1; all
securities, mortgages, bills, notes and other documents now
held or owned, or which may be hereafter taken, held or owned,
by or on behalf of the Debtor, in respect of such accounts,
debts, amounts, claims, choses in action and moneys or any
part thereof; and all books, documents and papers recording,
evidencing or relating to such accounts, debts, amounts,
claims, choses in action and moneys or any part thereof;
(B) CHATTEL PAPER: all present and future agreements made between
the Debtor as secured party and others which evidence both a
monetary obligation and a security interest in or a lease of
specific goods;
(C) DOCUMENTS: all books of account and other books, invoices,
writings, letters, papers and other documents whether in
written, magnetic, electronic or other form, relating to or
being records of the Collateral or by which any of the
Collateral is secured, evidenced, acknowledged or made
payable;
(D) DOCUMENTS OF TITLE: all writings now or hereafter owned by the
Debtor, each of which purports to be issued by or addressed to
a bailee and purports to cover such
-4-
goods and chattels in the bailee's possession as are
identified or fungible portions of an identified mass, whether
such goods and chattels are inventory or equipment, and which
writing is treated in the ordinary course of business as
establishing that the person in possession of such writing is
entitled to receive, hold and dispose of such writing and the
goods and chattels it covers, and further, whether such
writing is negotiable in form or otherwise, including bills of
lading and warehouse receipts;
(E) EQUIPMENT: all equipment now owned or hereafter acquired by
the Debtor, including, without limitation, all machinery,
fixtures, plant, tools, furniture, chattels, vehicles of any
kind or description including, without limitation, motor
vehicles, parts, accessories installed in or affixed or
attached to any of the foregoing, all purchase warranties and
claims, drawings, specifications, plans and manuals relating
thereto, any equipment specified as equipment of the Debtor
and described in any schedule, exhibit or appendix hereto and
any other tangible personal property which is not inventory;
(F) INSTRUMENTS: all present and future bills, notes and cheques
(as such terms are defined pursuant to the BILLS OF EXCHANGE
ACT (Canada)) of the Debtor, and all other writings that
evidence a right to the payment of money and are of a type
that in the ordinary course of business is transferred by
delivery and all letters of credit and advices of credit
provided that such letters of credit and advices of credit
state that they must be surrendered upon claiming payment
thereunder;
(G) INTANGIBLES: subject to section 2.5, all intangible property
now owned or hereafter acquired by the Debtor and which is not
accounts including, without limitation, all contractual
rights, insurance claims, goodwill, licences, inventions,
franchises, designer rights, know-how, processes and formulae,
patents, patent applications, trade marks, trade names,
copyrights and other intellectual or industrial property of
the Debtor, whether registered or not and whether under
licence or otherwise, and all other choses in action of the
Debtor of every kind, whether due or owing at the present time
or hereafter to become due or owing;
(H) INVENTORY: all goods and chattels now or hereafter forming the
inventory of the Debtor including, without limitation, all
goods, merchandise, raw materials, work in process, finished
goods, goods held for sale, resale or lease or that have been
leased, or that are to be or have been furnished under a
contract of service, and goods used in or procured for packing
or packaging, timber to be cut, minerals and hydrocarbons to
be extracted, all livestock and their unborn young and all
growing crops;
(I) MONEY: all money now or hereafter owned by the Debtor, whether
or not such money is authorized or adopted by the Parliament
of Canada as part of its currency or by any foreign government
as part of its currency;
(J) SECURITIES: all present and future securities held by the
Debtor, including shares, options, rights, warrants, joint
venture interests, interests in limited partnerships,
-5-
trust units, bonds, debentures and all other documents which
constitute evidence of a share, participation or other
interest of the Debtor in property or in an enterprise or
which constitute evidence of an obligation of the issuer
(including, without limitation, an uncertificated security
within the meaning of Part VI (Investment Securities) of the
BUSINESS CORPORATIONS ACT (Ontario)), together with all
accretions thereto, all substitutions therefor, all dividends
and income derived therefrom and all rights and claims in
respect thereof; and
(K) LEASES: subject to section 2.4, all leases now owned or
hereafter acquired by the Debtor as tenant (whether oral or
written) or any agreement therefor, together with all of the
Debtor's erections, improvements and fixtures situate
thereupon.
2.2 PROCEEDS
The Security Interest shall extend to all proceeds (other than consumer
goods) of the Collateral.
2.3 ATTACHMENT
The Debtor hereby acknowledges that value has been given by the Secured
Party for the granting of the Security Interest, that the Debtor has
rights in the Collateral (other than future and hereafter acquired
Collateral), and that the parties have agreed not to postpone the time
for attachment of the Security Interest.
2.4 EXCEPTION RE: LAST DAY OF LEASES
The last day of the term of any lease, sublease or agreement therefor,
oral or written, now held or hereafter acquired by the Debtor is
specifically excepted from the Security Interest and shall not form
part of the Collateral, but the Debtor agrees to stand possessed of
such last day in trust for such person as the Secured Party may direct
and the Debtor shall assign and dispose thereof in accordance with such
direction.
2.5 EXCEPTION RE: CONTRACTUAL RIGHTS, LICENCES, ETC.
To the extent that the Security Interest would constitute a breach or
cause the acceleration of any agreement, lease, contractual right,
licence, approval, privilege, franchise or permit to which the Debtor
is a party, the Security Interest shall not attach thereto but the
Debtor shall hold its interest therein in trust for the Secured Party,
and shall grant a security interest in such agreement, contractual
right, licence or permit to the Secured Party forthwith upon obtaining
the appropriate consents to the creation of such security interest. The
Debtor agrees to use commercially reasonable efforts to obtain any such
consent from time to time requested by the Secured Party, acting
reasonably.
2.6 AMALGAMATION
In the event that the Debtor shall amalgamate with any other
corporation or corporations:
-6-
(a) the term "Debtor" wherever used herein shall extend to and
include each of the amalgamating corporations and the
amalgamated corporation, and the indebtedness, obligations and
liabilities of each of them shall be included in the
Obligations; and
(b) the Security Interest shall extend to and the Collateral shall
include all the property and assets of each of the
amalgamating corporations and the amalgamated corporation and
to any property or assets of the amalgamated corporation
thereafter owned or acquired.
ARTICLE 3 - DEFAULT AND ENFORCEMENT
3.1 EVENTS OF DEFAULT
The Debtor shall be in default hereunder upon the occurrence of an
Event of Default as defined in the Credit Agreement (any such
occurrence being referred to herein as an "EVENT OF DEFAULT").
3.2 REMEDIES
Upon the occurrence and continuance of an Event of Default, the
Security Interest will become immediately enforceable, and the Secured
Party may, forthwith or at any time thereafter and without notice to
the Debtor except as required by the PPSA or by this agreement:
(a) commence legal action to enforce payment or performance of any
or all of the Obligations;
(b) make payments to discharge any claim, lien, mortgage, security
interest, charge or other encumbrance on properties on which
either the Debtor or the Secured Party may hold charges or
encumbrances (whether or not ranking in priority to the
Security Interest);
(c) enter upon, use and occupy any and all premises owned, leased
or occupied by the Debtor where the Collateral may be located;
(d) take immediate possession of all or any part of the Collateral
and require the Debtor to assemble and deliver possession of
the Collateral at a location or locations specified by the
Secured Party, with power to exclude the Debtor, its officers,
directors, employees and agents therefrom;
(e) appoint or reappoint by instrument in writing any person to be
an agent or any person to be a receiver, manager or receiver
and manager (herein called a "RECEIVER") of the Collateral and
to remove any Receiver so appointed and to appoint another if
the Secured Party so desires;
(f) notify the account debtors or obligors under any accounts of
the assignment of such accounts to the Secured Party and
direct such account debtors or obligors to
-7-
make payment of all amounts due or to become due to the Debtor
thereunder directly to the Secured Party and give valid and
binding receipts and discharges therefor and in respect
thereof and, upon such notification and at the expense of the
Debtor, enforce collection of any accounts, and adjust, settle
or compromise the amount or payment thereof, in the same
manner and to the same extent as the Debtor might have done;
(g) enjoy and exercise all of the rights and remedies of a secured
party under the PPSA;
(h) file such proofs of claim or other documents as may be
necessary or desirable to have its claim lodged in any
bankruptcy, winding-up, liquidation, dissolution or other
proceedings (voluntary or involuntary) relating to the Debtor;
(i) preserve, protect and maintain the Collateral and make such
replacements thereof and additions thereto as the Secured
Party shall deem advisable;
(j) sell, consign, lease or otherwise dispose of all or any part
of the Collateral whether by public or private sale,
consignment or lease or otherwise and on any terms so long
as every aspect of the disposition is commercially reasonable,
including, without limitation, terms that provide time for
payment on credit, provided that:
(i) neither the Secured Party nor any Receiver
shall be required to sell, consign, lease or
dispose of the Collateral, but may peaceably
and quietly take, hold, use, occupy, possess
and enjoy the Collateral without
molestation, eviction, hindrance or
interruption by the Debtor or any other
person or persons whomsoever for such period
of time as is commercially reasonable;
(ii) the Secured Party or any Receiver may
dispose of all or any part of the Collateral
in the condition in which it was on the date
possession of it was taken, or after any
commercially reasonable repair, processing
or preparation for disposition;
(iii) the Secured Party or any Receiver may
convey, transfer and assign to a purchaser
or purchasers the title to any of the
Collateral so sold; and
(iv) the Debtor will be entitled to be credited
with the actual proceeds of any such sale,
consignment, lease or other disposition only
when such proceeds are received by the
Secured Party or any Receiver in cash.
3.3 POWERS AND DUTIES OF RECEIVER
Any Receiver appointed hereunder:
(a) shall, subject to the provisions of the instrument appointing
it, have all of the powers of the Secured Party hereunder
together with:
-8-
(i) the power to carry on the business of the Debtor or
any part thereof;
(ii) the power to borrow money in the Debtor's name or in
the Receiver's name; and
(iii) the power to grant security interests in the
Collateral in priority to the Security Interest as
security for the money so borrowed; and
(b) shall be deemed to be the agent of the Debtor for the purpose
of establishing liability for the acts or omissions of the
Receiver and the Secured Party shall not be liable for such
acts or omissions.
The Debtor hereby irrevocably authorizes the Secured Party from time to
time after appointment of any Receiver to give instructions to the
Receiver relating to the performance of the Receiver's duties and to
fix the remuneration of the Receiver in connection therewith.
3.4 OTHER REMEDIES CUMULATIVE
The remedies provided in section 3.2 are cumulative and in addition to
(and not in substitution for, exclusive of or dependent on) any other
remedies contained herein or in any existing or future security
document granted by the Debtor to the Secured Party and to all other
remedies existing at law or in equity or by statute.
3.5 RESTRICTION ON DEBTOR
Upon the Secured Party taking possession of the Collateral or the
appointment of a Receiver, all the powers, functions, rights and
privileges of the Debtor or any officer, director, employee or agent of
the Debtor with respect to the Collateral shall, to the extent
permitted by law, be suspended unless specifically continued by the
written consent of the Secured Party; however, all other powers,
functions, rights and privileges of the Debtor or any officer,
director, employee or agent of the Debtor shall be unaffected by such
events.
3.6 INDULGENCES AND RELEASES
Either the Secured Party or any Receiver may grant extensions of time
and other indulgences, take and give up or abstain from perfecting or
taking advantage of securities, accept compositions, compound,
compromise, settle, grant releases and discharges, release any part of
the Collateral to third parties and otherwise deal with the Debtor,
debtors of the Debtor, sureties and others and with the Collateral and
other security as the Secured Party or such Receiver may see fit
without prejudice to the liability of the Debtor under the Obligations
or the right of the Secured Party and such Receiver to hold the
Collateral and realize upon the Security Interest.
3.7 EXPENSES OF ENFORCEMENT
The Debtor agrees to indemnify and reimburse the Secured Party for all
reasonable costs and expenses of the Secured Party, its agents,
advisors and consultants (including without limitation legal fees and
disbursements on a solicitor-and-his-own-client basis) incurred with
-9-
respect to the exercise by the Secured Party of any of its rights,
remedies and powers under this agreement (including without limitation
costs and expenses related to the custody, preservation and realization
of the Collateral, any amounts paid under section 3.2(b), the
remuneration of the Receiver and all costs and expenses incurred by the
Receiver in performing its functions under its appointment), and such
costs and expenses shall be added to and shall form part of the
Obligations.
3.8 APPLICATION OF MONEYS
Subject to the requirements of the PPSA, all money or other proceeds of
realization collected or received by the Secured Party or any Receiver
upon the realization of the Security Interest or the exercise of any
other rights or remedies herein contained with respect to the
Collateral shall be applied on account of the Obligations in such
manner as the Secured Party deems best or, at the option of the Secured
Party, may be held unapportioned in a collateral account or released to
the Debtor, all without prejudice to the liability of the Debtor or the
rights of the Secured Party hereunder. The balance of such proceeds, if
any, shall be paid in accordance with the PPSA and any other applicable
law.
3.9 LIABILITY FOR DEFICIENCY
If the proceeds of realization received by or on behalf of the Secured
Party from the disposition of the Collateral are not sufficient to
satisfy the Obligations in full, the Debtor shall be liable to pay such
deficiency to the Secured Party forthwith on demand.
3.10 SET-OFF
Without in any way limiting any other rights or remedies available to
the Secured Party, the Secured Party shall have the right (but shall
not be obligated) to set off against the Obligations or any of them
deposits (general or special) or moneys then held by the Secured Party
or any other indebtedness owing by the Secured Party to, or held by the
Secured Party for the credit of, the Debtor, regardless of the currency
in which such indebtedness is denominated and notwithstanding that such
indebtedness is not then due.
ARTICLE 4 - GENERAL PROVISIONS
4.1 WAIVER
No delay or omission to exercise any right or remedy accruing to the
Secured Party upon any breach or default by the Debtor hereunder shall
impair any such right or remedy by the Secured Party nor be construed
as a waiver of any such breach or default or of any similar breach or
default thereafter occurring, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise
of any other right or remedy. No waiver of a single breach or default
shall operate or be construed as a waiver of any subsequent breach or
default. All waivers hereunder must be in writing and signed by the
waiving party, duly authorized, if by the Secured Party, by the Lenders
in accordance with the provisions of the Credit Agreement.
-10-
4.2 AMENDMENT
This agreement may only be amended, supplemented or terminated by a
written agreement signed by the Debtor and the Secured Party, duly
authorized by the Lenders in accordance with the provisions of the
Credit Agreement.
4.3 NOTICES
Any notice permitted or required to be given hereunder shall be given,
in the case of the Secured Party, in accordance with the relevant
provisions of the Credit Agreement and, in the case of the Debtor, to
its address indicated above and otherwise in accordance with the
relevant provisions of the Credit Agreement.
4.4 FURTHER ASSURANCES
The Debtor shall do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged and delivered, such further acts, deeds,
mortgages, transfers, assurances or other documents as the Secured
Party shall reasonably require to give effect to or to preserve and
perfect the Security Interest in the Collateral intended to be granted
to the Secured Party hereunder, or any security interest the Debtor may
hereafter grant or become bound to grant to the Secured Party, for the
purpose of accomplishing and effecting the intention of this agreement.
The Debtor hereby irrevocably appoints the Secured Party to be the
attorney of the Debtor, coupled with an interest, with full power of
substitution, for and in the name of the Debtor, to execute and to do
any deeds, documents, transfers, demands, assignments, assurances,
consents and things which the Debtor is obliged to execute or do
hereunder.
4.5 TERM
This agreement shall become effective according to its terms
immediately upon the execution hereof by the Debtor and shall continue
as security for the Obligations until all of the Obligations are paid
and performed in full and this agreement is terminated.
4.6 NON-SUBSTITUTION
This agreement and the Security Interest are in addition to and not in
substitution for any other agreement made between the Secured Party and
the Debtor or any other security granted by the Debtor to the Secured
Party whether before or after the execution of this agreement.
4.7 NO MERGER
Neither the taking of any action, suit or proceedings, judicial or
extra-judicial, nor the exercise of any power of seizure or disposition
shall extinguish the liability of the Debtor to pay and perform the
Obligations nor shall the acceptance of any payment or alternate
security constitute or create any novation. No covenant, representation
or warranty of the Debtor herein shall merge in any judgment.
-11-
4.8 ENTIRE AGREEMENT
There are no representations, agreements, warranties, conditions,
covenants or terms, express or implied, collateral or otherwise,
affecting this agreement or the Security Interest or the Debtor's
obligations and liabilities hereunder other than as expressed herein.
4.9 TIME OF ESSENCE
Time shall in all respects be of the essence hereof.
4.10 BINDING EFFECT
This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
4.11 DISCLOSURE OF INFORMATION RE: DEBTOR
The Debtor agrees that the Secured Party may provide from time to time
such information concerning this agreement, the Collateral and the
Obligations to such persons as the Secured Party in good faith believes
are entitled to the same under the PPSA.
IN WITNESS WHEREOF the Debtor has executed this agreement as of the date first
above written and in executing this general security agreement, hereby
acknowledges receipt of an executed copy thereof.
[NAME OF DEBTOR]
Per:__________________________
Name:
Title:
I have authority to bind the corporation
