EXHIBIT 4-M
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement") dated as of April 14, 2000 is
among TRUSERV CORPORATION (the "Company"), each subsidiary of the Company
listed on the signature pages hereof, each other person or entity which from
time to time becomes a party hereto (collectively, including the Company, the
"Debtors" and individually each a "Debtor") and BANK OF AMERICA, N.A. ("Bank of
America"), as Collateral Agent (as defined below) for the Benefited Parties (as
defined in the Intercreditor Agreement referred to below).
WITNESSETH:
WHEREAS, pursuant to an Intercreditor Agreement dated as of the date
hereof (as amended, restated or otherwise modified from time to time, the
"Intercreditor Agreement"; capitalized terms used but not defined herein have
the respective meanings given thereto in the Intercreditor Agreement), certain
creditors of the Company and Bank of America, as Collateral Agent (in such
capacity, together with any successor in such capacity, the "Collateral
Agent"), have agreed that (i) the Benefited Obligations shall be secured and
guaranteed as set forth in the Intercreditor Agreement and (ii) Bank of America
shall act as collateral agent for the Benefited Parties;
WHEREAS, each of the other Debtors has guaranteed all obligations of the
Company under each Financing Agreement; and
WHEREAS, the Benefited Obligations of each Debtor are to be secured
pursuant to this Agreement;
NOW, THEREFORE, for and in consideration of the premises, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. When used herein, (a) the terms Account, Account Debtor,
Certificated Security, Chattel Paper, Commodity Account, Commodity Contract,
Investment Property, Security Entitlement, Securities Account, Deposit Account,
Document, Equipment, Fixture, Goods, Inventory, Instrument, Security and
Uncertificated Security shall have the respective meanings assigned to such
terms in the UCC (as defined below), (b) capitalized terms used but not defined
have the meanings assigned to such terms in the Intercreditor Agreement and (c)
the following terms have the following meanings (such definitions to be
applicable to both the singular and plural forms of such terms):
Agreement - see the introductory paragraph.
Assignee Deposit Account - see Section 4.
Bank of America - see the introductory paragraph.
Business Day means any day on which Bank of America is open for
commercial banking business in Chicago and Charlotte.
Collateral means, with respect to any Debtor, all property and rights
of such Debtor in which a security interest is granted hereunder.
Collateral Agent - see the recitals.
Company - see the introductory paragraph.
Computer Hardware and Software means, with respect to any Debtor, (i)
all computer and other electronic data processing hardware, whether now or
hereafter owned, licensed or leased by such Debtor, including, without
limitation, all integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral devices and other
related computer hardware; (ii) all software programs, whether now or hereafter
owned, licensed or leased by such Debtor, designed for use on the computers and
electronic data processing hardware described in clause (i) above, including,
without limitation, all operating system software, utilities and application
programs in whatsoever form (source code and object code in magnetic tape, disk
or hard copy format or any other listings whatsoever); (iii) all firmware
associated therewith, whether now or hereafter owned, licensed or leased by such
Debtor; and (iv) all documentation for such hardware, software and firmware
described in the preceding clauses (i), (ii) and (iii), whether now or hereafter
owned, licensed or leased by such Debtor, including, without limitation, flow
charts, logic diagrams, manuals, specifications, training materials, charts and
pseudo codes.
Debtor - see the introductory paragraph.
Default means the occurrence of any of the following events: (i) any
Event of Default or (ii) any warranty of any Debtor herein is untrue or
misleading in any material respect and, as a result thereof, the Collateral
Agent's security interest for the benefit of the Benefited Parties in any
material portion of the collateral is not perfected or the Collateral Agent's
rights and remedies with respect to any material portion of the collateral are
materially impaired or otherwise materially adversely affected.
General Intangibles means, with respect to any Debtor, all of such
Debtor's "general intangibles" as defined in the UCC and, in any event, includes
(without limitation) all of such Debtor's licenses, franchises, tax refund
claims, guarantee claims, security interests and rights to indemnification, and
all of such Debtor's interests in any partnership, limited liability company or
similar entity.
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Intellectual Property means all past, present and future; trade secrets
and other proprietary information; customer lists; trademarks, service marks,
business names, trade names; designs, logos, indicia, and/or other source
and/or business identifiers and the goodwill of the business relating thereto
and all registrations or applications for registrations which have heretofore
been or may hereafter be issued thereon throughout the world; copyrights
(including, without limitation, copyrights for computer programs) and copyright
registrations or applications for registrations which have heretofore been or
may hereafter be issued throughout the world and all tangible property
embodying the copyrights; inventions (whether or not patentable); patent
applications and patents; industrial designs; industrial design applications
and registered industrial designs; license agreements related to any of the
foregoing and income therefrom; mask works; books, records, writings, computer
tapes or disks, flow diagrams, specification sheets, source codes, object codes
and other physical manifestations, embodiments or incorporations of any of the
foregoing; the right to xxx for all past, present and future infringements of
any of the foregoing; and all common law and other rights in and to all of the
foregoing.
Intercreditor Agreement - see the recitals.
Liabilities means, as to each Debtor, all Benefited Obligations of such
Debtor.
Non-Tangible Collateral means, with respect to any Debtor, collectively,
such Debtor's Accounts and General Intangibles.
Permitted Liens - see Section 3.
UCC means the Uniform Commercial Code as in effect from time to time in
the State of Illinois.
2. Grant of Security Interest. As security for the payment of all
Liabilities, each Debtor hereby assigns to the Collateral Agent for the benefit
of the Benefited Parties, and grants to the Collateral Agent for the benefit of
the Benefited Parties a continuing security interest in, the following, whether
now or hereafter existing or acquired:
All of such Debtor's:
(i) Accounts;
(ii) Chattel Paper;
(iii) Computer Hardware and Software and all rights with respect thereto,
including, without limitation, any and all licenses, options,
warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal
rights and indemnifications, and any substitutions, replacements,
additions or model conversions of any of the foregoing;
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(iv) Deposit Accounts;
(v) Documents;
(vi) General Intangibles;
(vii) Goods (including, without limitation, all its Equipment,
Fixtures and Inventory), together with all accessions, additions,
attachments, improvements, substitutions and replacements
thereto and therefor;
(viii) Instruments;
(ix) Intellectual Property;
(x) money (of every jurisdiction whatsoever);
(xi) Investment Property (including Commodity Accounts, Commodity
Contracts, Securities (whether Certificated Securities or
Uncertificated Securities), Security Entitlements and Securities
Accounts; and
(xii) to the extent not included in the foregoing, other personal property
of any kind or description;
together with all books, records, writings, data bases, information and
other property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to any of the foregoing, all claims
and/or insurance proceeds arising out of the loss, nonconformity or any
interference with the use of, or any defects or infringements of rights in,
or damage to, any of the foregoing, and all proceeds, products, offspring,
rents, issues, profits and returns of and from, and all distributions on
and rights arising out of, any of the foregoing.
3. Warranties. Each Debtor warrants, as to itself and its own collateral,
that: (i) no financing statement (other than any which may have been filed on
behalf of the Collateral Agent or in connection with Permitted Liens (as defined
below)) covering any of the Collateral is on file in any public office; (ii)
such Debtor is and will be the lawful owner of all Collateral, free of all liens
and claims whatsoever, other than the security interest hereunder and liens and
claims expressly permitted by each of the Financial Agreements ("Permitted
Liens"), with full power and authority to execute and deliver this Agreement, to
perform such Debtor's obligations hereunder and to subject the Collateral to the
security interest hereunder; (iii) all information with respect to the
Collateral and Account Debtors set forth in any schedule, certificate or other
writing at any time heretofore or hereafter furnished by such Debtor to the
Collateral Agent or any other Benefited Party and all other written information
heretofore or hereafter furnished by such Debtor to the Collateral Agent or any
other Benefited Party in connection with any
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Financing Agreement will be true and correct in all material respects as of the
date furnished; (iv) such Debtor's true legal name as registered in the
jurisdiction in which such Debtor is organized or incorporated, jurisdiction of
organization or incorporation, federal employer identification number,
organizational identification number, if any, as designated by the state of its
organization or incorporation, chief executive office and principal place of
business are as set forth on Schedule I hereto (and such Debtor has not
maintained its chief executive office and principal place of business at any
other location at any time after November 1, 1999); (v) each other location
where such Debtor maintains a place of business or has any Goods is set forth
on Schedule II hereto; (vi) except as disclosed on Schedule III, such Debtor is
not now known and during the five years preceding the date hereof has not
previously been known by any trade name; (vii) except as disclosed on Schedule
III, during the five years preceding the date hereof such Debtor has not been
known by any legal name different from the one set forth on the signature page
of this Agreement nor has such Debtor been the subject of any merger or other
corporate reorganization; (viii) Schedule IV hereto contains a complete listing
of all of such Debtor's Intellectual Property which has been registered under
any registration statute; (ix) such Debtor is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation; (x) the execution and delivery of this Agreement and the
performance by such Debtor of its obligations hereunder are within such
Debtor's corporate powers, have been duly authorized by all necessary corporate
action, have received all necessary governmental approval (if any shall be
required), and do not and will not contravene or conflict with any provision of
law or of the charter or by-laws of such Debtor or of any material agreement,
indenture, instrument or other document, or any material judgment, order or
decree, which is binding upon such Debtor; (xi) this Agreement is a legal,
valid, binding and enforceable obligation of such Debtor, except that the
enforceability of this Agreement may be limited by bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law); (xii) such Debtor has not
performed any acts which might prevent the Collateral Agent from enforcing any
of the terms of this Agreement or which could limit the Collateral Agent in
such enforcement; (xiii) no Collateral is in the possession of any Person
(other than such Debtor) asserting any claim thereto or security interest
therein, except that the Collateral Agent or its designee may have possession
of Collateral as contemplated hereby; and (xiv) such Debtor is in compliance
with the requirements of all applicable laws (including, without limitation,
the provisions of the Fair Labor Standards Act), rules, regulations and orders
of every governmental authority, the non-compliance with which would materially
adversely affect the business, properties, assets, operations, prospects or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole or the value of the Collateral or the worth of the Collateral as
collateral security.
4. Collections, etc. Until such time during the existence of a Default as
the Collateral Agent shall notify such Debtor of the revocation of such power
and authority, each Debtor (a) may, in the ordinary course of its business, at
its own expense, sell, lease or furnish under contracts of service any of the
Inventory normally held by such Debtor for such purpose, use and consume, in
the ordinary course of its business, any raw materials, work in process or
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materials normally held by such Debtor for such purpose, and use, in the
ordinary course of its business (but subject to the terms of the Financing
Agreements), the cash proceeds of Collateral and other money which constitutes
Collateral, (b) will, at its own expense, endeavor to collect, as and when due,
all amounts due under any of the Non-Tangible Collateral, including the taking
of such action with respect to such collection as the Collateral Agent may
reasonably request or, in the absence of such request, as such Debtor may deem
advisable, and (c) may grant, in the ordinary course of business, to any party
obligated on any of the Non-Tangible Collateral, any rebate, refund or allowance
to which such party may be lawfully entitled, and may accept, in connection
therewith, the return of Goods, the sale or lease of which shall have given rise
to such Non-Tangible Collateral. The Collateral Agent, however, may, at any time
that a Default exists, whether before or after any revocation of such power and
authority or the maturity of any of the Liabilities, notify any parties
obligated on any of the Non-Tangible Collateral to make payment to the
Collateral Agent of any amounts due or to become due thereunder and enforce
collection of any of the Non-Tangible Collateral by suit or otherwise and
surrender, release or exchange all or any part thereof, or compromise or extend
or renew for any period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby. Upon request of the Collateral
Agent during the existence of a Default, each Debtor will, at its own expense,
notify any parties obligated on any of the Non-Tangible Collateral to make
payment to the Collateral Agent of any amounts due or to become due thereunder.
Upon request by the Collateral Agent during the existence of a Default,
each Debtor will forthwith, upon receipt, transmit and deliver to the Collateral
Agent, in the form received, all cash, checks, drafts and other instruments or
writings for the payment of money (properly endorsed, where required, so that
such items may be collected by the Collateral Agent) which may be received by
such Debtor at any time in full or partial payment or otherwise as proceeds of
any of the Collateral. Except as the Collateral Agent may otherwise consent in
writing, any such items which may be so received by any Debtor during the
existence of a Default will not be commingled with any other of its funds or
property, but will be held separate and apart from its own funds or property and
upon express trust for the Collateral Agent for the benefit of the Benefited
Parties until delivery is made to the Collateral Agent. Each Debtor will comply
with the terms and conditions of any consent given by the Collateral Agent
pursuant to the foregoing sentence.
During the existence of a Default, all items or amounts which are delivered
by any Debtor to the Collateral Agent on account of partial or full payment or
otherwise as proceeds of any of the Collateral shall be deposited to the credit
of a deposit account (each an "Assignee Deposit Account") of such Debtor with
the Collateral Agent, as security for payment of the Liabilities. No Debtor
shall have any right to withdraw any funds deposited in the applicable Assignee
Deposit Account. The Collateral Agent may, from time to time, in its discretion,
and shall upon request of the applicable Debtor made not more than once in any
week or upon the request of the Required Benefited Parties in accordance with
the Intercreditor Agreement, apply all or any of the then balance, representing
collected funds, in the Assignee Deposit Account, toward payment of the
Liabilities (whether or not then due if such request is made by the applicable
Debtor, but only to amounts then due if such request is made by the Required
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Benefited Parties) in the order of application set forth in the Intercreditor
Agreement, and the Collateral Agent may, from time to time, release all or any
of such balance to the applicable Debtor so long as such release is permitted by
the Intercreditor Agreement.
During the existence of a Default, the Collateral Agent is authorized to
endorse, in the name of the applicable Debtor, any item, howsoever received by
the Collateral Agent, representing any payment on or other proceeds of any of
the Collateral.
From and after July 1, 2001, no Debtor shall maintain any Deposit Account
or deposit any item or amount in any Deposit Account, except (i) Deposit
Accounts maintained with the Collateral Agent and (ii) Deposit Accounts as to
which such Debtor, the Collateral Agent and the depository bank have entered
into an agreement that the depositary bank will comply with instructions
originated by the Collateral Agent directing disposition of the funds in the
account without further consent by such Debtor.
5. Certificates, Schedules and Reports. Each Debtor will from time to time
deliver to the Collateral Agent such schedules, certificates and reports
respecting all or any of the Collateral at the time subject to the security
interest hereunder, and the items or amounts received by such Debtor in full or
partial payment of any of the Collateral, as the Collateral Agent may
reasonably request. Any such schedule, certificate or report shall be executed
by a duly authorized officer of such Debtor and shall be in such form and detail
as the Collateral Agent may specify. Each Debtor shall immediately notify the
Collateral Agent of the occurrence of any event causing any loss or
depreciation in the value of its Inventory or other Goods which is material to
the Company and its Subsidiaries taken as a whole, and such notice shall
specify the amount of such loss or depreciation.
6. Agreements of the Debtors. Each Debtor (a) will, upon request of the
Collateral Agent, execute such financing statements and other documents (and pay
the cost of filing or recording the same in all public offices reasonably deemed
appropriate by the Collateral Agent) and do such other acts and things
(including, without limitation, delivery to the Collateral Agent of any
Instruments or Certificated Securities which constitute Collateral), all as the
Collateral Agent may from time to time reasonably request, to establish and
maintain a valid security interest in the Collateral (free of all other liens,
claims and rights of third parties whatsoever, other than Permitted Liens) to
secure the payment of the Liabilities (and each Debtor hereby authorizes the
Collateral Agent to file any financing statement without its signature, to the
extent permitted by applicable law, and/or to file a copy of this Agreement as a
financing statement in any jurisdiction, it being understood that the Collateral
Agent will use reasonable efforts to notify the applicable Debtor of any such
filing and the details thereof, but failure to do so shall not affect the
effectiveness thereof or impose any liability on the Collateral Agent); (b) will
keep all its Inventory at, and will not maintain any place of business at any
location other than, its address(es) shown of Schedules I and II hereto or at
such other addresses of which such Debtor shall have given the Collateral Agent
not less than 10 days' prior written notice; (c) will not change its state of
organization or incorporation or its name, identity or
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corporate structure such that any financing statement filed to perfect the
Collateral Agent's interests under this Agreement would become seriously
misleading, unless such Debtor shall have given the Collateral Agent not less
than 30 days' prior notice of such change (provided that this Section 6(c) shall
not be deemed to authorize any change or transaction prohibited under any
Financing Agreement); (d) will keep its records concerning the Non-Tangible
Collateral in such a manner as will enable the Collateral Agent or its designees
to determine at any time the status of the Non-Tangible Collateral; (e) will
furnish the Collateral Agent such information concerning such Debtor, the
Collateral and the Account Debtors as the Collateral Agent may from time to time
reasonably request; (f) will permit the Collateral Agent and its designees, from
time to time, on reasonable notice and at reasonable times and intervals during
normal business hours (or at any time without notice during the existence of a
Default) to inspect such Debtor's Inventory and other Goods, and to inspect,
audit and make copies of and extracts from all records and all other papers in
the possession of such Debtor pertaining to the Collateral and the Account
Debtors, and will, upon request of the Collateral Agent during the existence of
a Default, deliver to the Collateral Agent all of such records and papers; (g)
will, upon request of the Collateral Agent, stamp on its records concerning the
Collateral and add on all Chattel Paper constituting a portion of the
Collateral, a notation, in form satisfactory to the Collateral Agent, of the
security interest of the Collateral Agent hereunder; (h) except as permitted by
each of the Financing Agreements, will note sell, lease, assign or create or
permit to exist any lien on or security interest in any Collateral other than
Permitted Liens and liens and security interests in favor of the Collateral
Agent; (i) will at all times keep all its Inventory and other Goods insured
under policies maintained with reputable, financially sound insurance companies
against loss, damage, theft and other risks to such extent as is customarily
maintained by companies similarly situated, and cause all such policies to
provide that loss thereunder shall be payable to the Collateral Agent as its
interest may appear (it being understood that (A) so long as no Default exists,
the Collateral Agent shall deliver any proceeds of such insurance which may be
received by it to such Debtor and (B) whenever a Default exists, the Collateral
Agent shall apply any proceeds of such insurance which may be received by it
toward payment of the Liabilities, whether or not due, in the order of
application set forth in the Intercreditor Agreement) and such policies or
certificates thereof shall, if the Collateral Agent so requests, be deposited
with or furnished to the Collateral Agent; (j) will take such actions as are
reasonably necessary to keep its Inventory in good repair and condition,
ordinary wear and tear excepted; (k) will take such actions as are reasonably
necessary to keep its Equipment (other than obsolete Equipment) in good repair
and condition and in good working or running order, ordinary wear and tear
excepted; (l) will promptly pay when due all license fees, registration fees,
taxes, assessments and other charges which may be levied upon or assessed
against the ownership, operation, possession, maintenance or use of its
Equipment and other Goods (as applicable); provided, however, that such Debtor
shall not be required to pay any such fee, tax, assessment or other charge if
the validity, accuracy or applicability thereof is being contested by such
Debtor in good faith by appropriate proceedings, so long as forfeiture of any
substantial part of its Equipment or other Goods will not result from the
failure of such Debtor to pay any such fee, tax, assessment or other charge
during the period of such contest; (m) will, upon request of the Collateral
Agent, (A) cause to be noted on the applicable certificate, in the event any of
its Equipment is covered by a certificate of title, the security interest of the
Collateral Agent in the Equipment covered
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thereby and (B) deliver all such certificates to the Collateral Agent or its
designees; (n) will take all steps reasonably necessary to protect, preserve
and maintain all of its rights in the Collateral; (o) will keep all of the
tangible Collateral in the United States; and (p) will reimburse the Collateral
Agent for all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the Collateral Agent in seeking to collect or enforce any
rights in respect of such Debtor's Collateral.
Any expenses incurred in protecting, preserving and maintaining any
Collateral shall be borne by the applicable Debtor. Whenever a Default exits,
the Collateral Agent shall have the right to bring suit to enforce any or all
of the Intellectual Property or licenses thereunder, in which event the
applicable Debtor shall at the request of the Collateral Agent do any and all
lawful acts and execute any and all proper documents required by the Collateral
Agent in aid of such enforcement and such Debtor shall promptly, upon demand,
reimburse and indemnify the Collateral Agent for all reasonable costs and
expenses incurred by the Collateral Agent in the exercise of its rights under
this Section 6, except to the extent any of the foregoing result from the gross
negligence or willful misconduct of the Collateral Agent. Notwithstanding the
foregoing, neither the Collateral Agent nor any other Benefited Party shall
have any obligations or liabilities regarding any of the Collateral by reason
of, or arising out of, this Agreement, except the duties to exercise reasonable
care and not to commit waste.
7. Default. (a) Whenever a Default exists, the Collateral Agent may
exercise from time to time any rights and remedies available to it under
applicable law.
(b) Each Debtor agrees, at the request of the Collateral Agent during the
existence of a Default, (i) to assemble, at its expense, all its Inventory and
other Goods (other than Fixtures) at a convenient place or places acceptable to
the Collateral Agents, and (ii) to execute all such documents and do all such
other things which may be necessary or desirable in order to enable the
Collateral Agent or its nominee to be registered as owner of the Intellectual
Property with any competent registration authority.
(c) Notice of the intended disposition of any Collateral may be given by
first-class mail, hand-delivery (through a delivery service or otherwise),
facsimile or E-mail, and shall be deemed to have been "sent" upon deposit in
the U.S. mails with adequate postage properly affixed, upon delivery to an
express delivery service or upon the electronic submission through telephone or
Internet services (receipt confirmed), as applicable. Each Debtor hereby agrees
and acknowledges that (i) with respect to Collateral that is: (A) perishable or
threatens to decline speedily in value or (B) is of a type customarily sold on
a recognized market (including Investment Property), no notice of disposition
need be given; and (ii) with respect to Collateral not described in clause (i)
above, notification sent after default and ten days before any proposed
disposition provides notice with a reasonable time before disposition.
(d) Each Debtor hereby agrees and acknowledges that a commercially
reasonable disposition of Inventory, Equipment, Computer Hardware and Software
or Intellectual Property may be by lease or license of, in addition to the sale
of, such Collateral. Each
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Debtor further agrees and acknowledges that a disposition (i) made in the usual
manner on any recognized market, (ii) at the price current in any recognized
market at the time of disposition or (iii) in conformity with reasonable
commercial practices among dealers in the type of property subject to the
disposition shall, in each case, be deemed commercially reasonable.
(e) Any cash proceeds of any disposition by the Collateral Agent of any of
the Collateral shall be applied by the Collateral Agent to payment of expenses
in connection with the Collateral, including reasonable attorneys' fees and
legal expenses, and thereafter to the payment of any and all of the Liabilities
in the order of application set forth in the Intercreditor Agreement, and
thereafter any surplus will be paid to the applicable Debtor or as a court of
competent jurisdiction shall direct. The Collateral Agent need not apply or pay
over for application noncash proceeds of collection and enforcement unless (i)
the failure to do so would be commercially unreasonable and (ii) the applicable
Debtor has provided the Collateral Agent with a written demand to apply or pay
over such noncash proceeds on such basis.
8. General. The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action for that purpose as any applicable Debtor
requests in writing, but failure of the Collateral Agent to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care, and
no failure of the Collateral Agent to preserve or protect any rights with
respect to such Collateral against prior parties, or to do any act with respect
to the preservation of such Collateral not so requested by any Debtor, shall be
deemed a failure to exercise reasonable care in the custody or preservation of
such Collateral.
All notices and requests hereunder shall be in writing (including
facsimile transmission) and shall be sent (i) if to the Collateral Agent, to
its address underneath its signature hereto or such other address as it may, by
written notice to the Company, have designated as its address for such purpose
and (ii) if to any Debtor, to its address shown on Schedule I hereto or to such
other address as such Debtor may, by written notice to the Collateral Agent,
have designated as its address for such purpose. Notices sent by facsimile
transmission shall be deemed to have been given when sent (receipt confirmed);
notices sent by mail shall be deemed to have been given five Business Days
after the date when sent by registered or certified mail, postage prepaid; and
notices sent by hand delivery or overnight courier shall be deemed to have been
given when received.
Each of the Debtors agrees to pay all expenses (including reasonable
attorney's fees and legal expenses) paid or incurred by the Collateral Agent or
any other Benefited Party in endeavoring to collect the Liabilities of such
Debtor, or any part thereof, and in enforcing this Agreement against such
Debtor, and such obligations will themselves be Liabilities.
No delay on the part of the Collateral Agent in the exercise of any right
or remedy shall operate as a waiver thereof, and no single or partial exercise
by the Collateral Agent of any right
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or remedy shall preclude other or further exercise thereof or the exercise of
any other right or remedy.
Unless released in writing by the Collateral Agent, this Security Agreement
shall remain in full force and effect until all Liabilities have been paid in
full and all commitments to create Liabilities have terminated. If at any time
all or any part of any payment theretofore applied by the Collateral Agent or
any other Benefited Party to any of the Liabilities is or must be rescinded or
returned by the Collateral Agent or any other Benefited Party for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of any Debtor), such Liabilities shall, for the purposes of this
Agreement, to the extent that such payment is or must be rescinded or returned,
be deemed to have continued in existence, notwithstanding such application by
the Collateral Agent or such other Benefited Party, and this Agreement shall
continue to be effective or be reinstated, as the case may be, as to such
Liabilities, all as though such application by the Collateral Agent or such
other Benefited Party had not been made.
This Agreement shall be construed in accordance with and governed by the
internal laws of the State of Illinois, subject, however, to the applicability
of the Uniform Commercial Code of any jurisdiction in which any Goods of any
Debtor may be located at any given time. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
The rights and privileges of the Collateral Agent hereunder shall inure to
the benefit of its successors and assigns.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute one and the same Agreement. At any time after the date of this
Agreement, one or more additional persons or entities may become parties hereto
by executing and delivering to the Collateral Agent a counterpart of this
Agreement (including supplements to the Schedules hereto). Immediately upon such
execution and delivery (and without any further action), each such additional
person or entity will become a party to, and will be bound by all the terms of,
this Agreement.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE
STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE COLLATERAL
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH
11
DEBTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. EACH DEBTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
BY REGISTERED MAIL, POSTAGE PREPAID, TO THE ADDRESS SET FORTH ON SCHEDULE I
HERETO (OR SUCH OTHER ADDRESS AS IT SHALL HAVE SPECIFIED IN WRITING TO THE
COLLATERAL AGENT AS ITS ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH DEBTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN ANY INCONVENIENT FORUM.
EACH OF EACH DEBTOR, THE COLLATERAL AGENT AND (BY ACCEPTING THE BENEFITS
HEREOF) EACH OTHER BENEFITED PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT OR ANY OTHER FINANCING AGREEMENT AND ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY FINANCING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
12
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day
and year first above written.
TRUSERV CORPORATION
By: /s/ XXXXXXX X. XXXXX
------------------------------
Name Printed: Xxxxxxx X. Xxxxx
--------------------
Title: Treasurer
---------------------------
TRUSERV ACCEPTANCE COMPANY
By: /s/ XXXXX X. XXXXX
------------------------------
Name Printed: Xxxxx X. Xxxxx
--------------------
Title: Vice-President
---------------------------
TRUSERV LOGISTICS COMPANY
By: /s/ XXXXX X. XXXXX
------------------------------
Name Printed: Xxxxx X. Xxxxx
--------------------
Title: Vice-President
---------------------------
GENERAL PAINT & MANUFACTURING COMPANY
By: /s/ XXXXX X. XXXXX
------------------------------
Name Printed: Xxxxx X. Xxxxx
--------------------
Title: Vice-President
---------------------------
MARYGREEN, LLC
By: /s/ XXXXX X. XXXXX
------------------------------
Name Printed: Xxxxx X. Xxxxx
--------------------
Title: Vice-President
---------------------------
S-1
TRUE XXXXX.XXX CORPORATION
By: /s/ XXXXX X. XXXXX
------------------------------
Name Printed: Xxxxx X. Xxxxx
--------------------
Title: Vice-President
---------------------------
BANK OF AMERICA, N.A., as Collateral Agent
By: /s/ XXXXX X. XXXXXXXX
------------------------------
Name Printed: Xxxxx X. Xxxxxxxx
--------------------
Title: Vice President
---------------------------
S-2
Signature page for the Security Agreement
dated as of April 14, 2000 issued by
TruServ Corporation (the "Company") and
various subsidiaries of the Company in
favor of Bank of America, N.A., as
Collateral Agent.
The undersigned is executing a
counterpart hereof for purposes of
becoming a party hereto:
[NAME OF SUBSIDIARY]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
S-3
