1
EXHIBIT 99.24
BOND PURCHASE AGREEMENT
AMONG
XXXXXXXXXX,
in its individual capacity and as Owner Participant
XXXXXXXXXX,
as Owner Trustee and
not in its individual capacity
AND
THE PURCHASER SIGNATORY HERETO
Dated as of December 28, 1992
$100,505,000 Collateralized Lease Revenue Bonds
2
TABLE OF CONTENTS
(Not a Part of this Agreement)
Page
----
SECTION 1. COMMITMENT . . . . . . . . . . . . . . . . 2
1.1. Commitment; Closing Date . . . . . . . . . 2
1.2. Other Bond Purchase Agreements . . . . . . 2
SECTION 2. REPRESENTATIONS . . . . . . . . . . . . . 2
2.1. Representations and Warranties of the
Owner Trustee . . . . . . . . . . . . . . 2
2.2. Representations and Warranties of the
Owner Participant . . . . . . . . . . . . 3
2.3. Representations and Warranties of the
Purchaser . . . . . . . . . . . . . . . . 5
SECTION 3. CLOSING CONDITIONS . . . . . . . . . . . . 6
3.1. Owner Participant's Closing Certificate . 6
3.2. Owner Trustee's Closing Certificate . . . 6
3.3. Indenture Trustee's Closing Certificate . 6
3.4. Legal Opinions . . . . . . . . . . . . . . 6
3.5. Related Transactions . . . . . . . . . . . 7
3.6. Title . . . . . . . . . . . . . . . . . . 7
3.7. Filing of Mortgages and Financing
Statements . . . . . . . . . . . . . . . . 7
3.8. Title Insurance . . . . . . . . . . . . . 7
3.9. A.L.T.A. Survey . . . . . . . . . . . . . 8
3.10. Insurance . . . . . . . . . . . . . . . . 8
3.11. Appraisal of Facilities . . . . . . . . . 8
3.12. Phase I Environmental Audit Report . . . . 8
3.13. Government Licenses . . . . . . . . . . . 9
3.14. Legal Compliance . . . . . . . . . . . . . 9
3.15. Condition of Facilities . . . . . . . . . 9
3.16. Architects Certificate . . . . . . . . . . 9
3.17. Tax Lot Consistent with Mortgages . . . . 9
3.18. Certificate Evidencing Cost of
Construction . . . . . . . . . . . . . . . 9
3.19. Ratings . . . . . . . . . . . . . . . . . 10
3.20. Private Placement Number Application . . . 10
3.21. Legality . . . . . . . . . . . . . . . . . 10
3.22. No Default or Event of Default . . . . . . 10
3.23. Satisfactory Proceedings . . . . . . . . . 10
3.24. Costs and Expenses . . . . . . . . . . . . 10
3.25. Authentication Requests . . . . . . . . . 11
3.26. Representations and Warranties in Company
Financing Documents, etc. . . . . . . . . 11
3.27. Sale of Bonds to Each Purchaser . . . . . 11
SECTION 4. COVENANTS . . . . . . . . . . . . . . . . 12
4.1. Covenants of the Owner Participant . . . . 12
4.2. Covenants of the Owner Trustee . . . . . . 14
i
3
Page
----
SECTION 5. EVENTS OF DEFAULT AND REMEDIES
THEREFOR . . . . . . . . . . . . . . . 14
5.1. Notice to Holders . . . . . . . . . . . . 14
5.2. Remedies . . . . . . . . . . . . . . . . . 15
SECTION 6. AMENDMENTS, WAIVERS AND CONSENTS . . . . . 15
6.1. Consent Required . . . . . . . . . . . . . 15
6.2. Solicitation of Holders . . . . . . . . . 15
6.3. Effect of Amendment or Waiver . . . . . . 16
SECTION 7. INTERPRETATION OF AGREEMENT; DEFINITIONS . 16
SECTION 8. MISCELLANEOUS . . . . . . . . . . . . . . 19
8.1. Registered Bonds . . . . . . . . . . . . . 19
8.2. Exchange of Bonds . . . . . . . . . . . . 19
8.3. Loss, Theft, etc. of Bonds . . . . . . . . 19
8.4. Direct Payments . . . . . . . . . . . . . 19
8.5. Expenses, Deed Tax, Transfer Tax,
Mortgage Recording Tax and Stamp Tax
Indemnity . . . . . . . . . . . . . . . . 19
8.6. Powers and Rights Not Waived; Remedies
Cumulative . . . . . . . . . . . . . . . . 21
8.7. Notices . . . . . . . . . . . . . . . . . 21
8.8. Successors and Assigns . . . . . . . . . . 21
8.9. Survival of Covenants and
Representations . . . . . . . . . . . . . 22
8.10. Severability . . . . . . . . . . . . . . . 22
8.11. Governing Law . . . . . . . . . . . . . . 22
8.12. Submission to Jurisdiction . . . . . . . . 22
8.13. Captions . . . . . . . . . . . . . . . . . 23
8.14. Counterparts . . . . . . . . . . . . . . . 23
Schedule I Schedule of Other Purchaser's Investments
Exhibit A Certificate of Owner Participant
Exhibit B Certificate of Owner Trustee
Exhibit C Certificate of Indenture Trustee
Exhibit D Individual Title Insurance Policies
ii
4
BOND PURCHASE AGREEMENT
Bond Purchase Agreement (this "Agreement") dated as of
December 28, 1992 among XXXXXXXXXX, a Delaware limited partnership (the "Owner
Participant"), XXXXXXXXXX, as Owner Trustee under the Trust Agreement referred
to below (the "Owner Trustee"), and the Purchaser signatory hereto (the
"Purchaser"). Except as otherwise provided herein, all references to Owner
Trustee shall refer to Owner Trustee acting in its capacity as such on behalf
of the trust (the "Trust") created pursuant to the Trust Agreement (as defined
herein).
WHEREAS, the Owner Trustee has authorized the issuance and sale
of $11,067,000.00 aggregate principal amount of 6.25% Collateralized Lease
Revenue Bonds due December 15, 1998 ("Series 1998 Bonds"), $27,190,000.00
aggregate principal amount of 7.50% Collateralized Lease Revenue Bonds due
December 15, 2007 ("Series 2007 Bonds"), $19,206,000.00 aggregate principal
amount of 8.00% Collateralized Lease Revenue Bonds due December 15, 2011
("Series 2011 Bonds"), and $42,972,000.00 aggregate principal amount of its
8.40% Collateralized Lease Revenue Bonds due December 15, 2017 ("Series 2017
Bonds" and together with the Series 1998 Bonds, Series 2007 Bonds and Series
2011 Bonds, collectively, the "Bonds"), each to be dated the date of issue,
pursuant to the Indenture (the "Indenture") dated as of December 28, 1992
between the Owner Trustee and XXXXXXXXXX as trustee (the "Indenture
Trustee"). The term "Bonds" as used herein shall include each Bond delivered
pursuant to this Agreement, and each Bond issued in exchange or replacement
therefor but shall not include any Subordinate Bonds. Certain capitalized
terms used herein shall have the meanings set forth in Section 7. All
capitalized terms not defined herein shall have the same meaning given in the
Indenture.
NOW, THEREFORE, the parties hereto agree as follows:
1
5
SECTION 1. COMMITMENT.
1.1 COMMITMENT; CLOSING DATE. Subject to the terms and
conditions hereof, the Owner Trustee shall issue and sell to the Purchaser, and
the Purchaser agrees to purchase from the Owner Trustee, the aggregate
principal amount of such Series of Bonds set forth beneath such Purchaser's
name on the signature pages hereof at the purchase price set forth beneath the
Purchaser's name on the signature pages hereof (the "Purchase Price"), on the
Closing Date (as defined below).
1.2. OTHER BOND PURCHASE AGREEMENTS. Simultaneously with the
execution and delivery of this Agreement, the Owner Trustee and the owner
Participant are entering into similar agreements with the purchaser signatory
thereto (collectively, the "Other Purchasers") under which each such Other
Purchaser agrees to purchase from the Owner Trustee the principal amount of
Bonds set forth opposite such Other Purchaser's name in Schedule I hereto, and
the Purchaser's obligation hereunder is subject to the execution and delivery
of the similar agreements by each such other Purchaser. The obligations of the
Purchaser and the Other Purchasers shall be several and not joint and the
Purchaser shall not be liable or responsible for the acts of any Other
Purchaser.
Delivery of the Bonds will be made at the offices of Xxxx, Weiss,
Rifkind, Xxxxxxx & Xxxxxxxx, 1285 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx
00000-0000 against payment therefor in the amount of the Purchase Price at
10:00 A.M., New York City time, on December 29, 1992 or such later date as
shall be mutually agreed upon by the parties (the "Closing Date"). Payment for
the Bonds shall be effected by wire transfer of federal funds to such bank
account of the Indenture Trustee as may be specified in writing at least two
business days prior to the Closing Date. The Bonds delivered to each Purchaser
on the Closing Date will be delivered to such Purchaser in the form of one or
more registered Bonds for the full amount of such Purchaser's purchase,
registered in the Purchaser's name or in the name of such nominee(s) or
assignee(s) as the Purchaser shall have specified in writing.
2
6
SECTION 2. REPRESENTATIONS.
2.1. REPRESENTATIONS AND WARRANTIES OF THE OWNER TRUSTEE. Each of
the representations and warranties made or to be made by the Owner Trustee in
the Indenture and the other Company Financing Documents are hereby incorporated
herein as if set forth herein in their entirety on which the Purchaser relies
in purchasing the Bonds in accordance with this Agreement.
2.2 REPRESENTATIONS AND WARRANTIES OF THE OWNER PARTICIPANT. The
Owner Participant hereby makes the following representations and warranties on
which the Purchaser relies in purchasing the Bonds in accordance with this
Agreement:
(a) The Owner Participant has been duly organized and is
validly existing as a limited partnership in good standing under the laws of the
State of Delaware with full power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently or proposed to be conducted.
(b) The Owner Participant has full power and authority to
execute and deliver this Agreement and the other Company Financing Documents to
which it is a party and to perform its obligations under this Agreement and
such other Company Financing Documents; and the execution, delivery and
performance by the Owner Participant of the Company Financing Documents to which
it is a party are authorized by the Owner Participant's Partnership Agreement or
have been duly authorized by the Owner Participant by all necessary partnership
action.
(c) The Company Financing Documents to which the Owner
Participant is a party have been duly executed by, and constitute the legal,
valid and binding obligations of, the Owner Participant, enforceable
against the Owner Participant in accordance with their respective terms, except
as enforceability may be limited by bankruptcy, insolvency, fraudulent
transfers, reorganization or other similar laws affecting the enforcement of
creditors' rights generally.
(d) The Owner Participant is duly qualified to do business
in each jurisdiction in which the conduct of its business or the ownership of
its properties would require such qualification.
3
7
(e) The Owner Participant was formed pursuant to the
Partnership Agreement for the sole purpose of consummating the transactions
contemplated by the Company Financing Documents. The Owner Participant has no
Indebtedness and has conducted no business whatsoever since its formation other
than business incidental to its organization and to its execution, delivery
and performance of the Company Financing Documents. The Owner Participant has
entered into no contracts or agreements, arrangements or understandings (whether
written or oral) other than the Company Financing Documents, has no liabilities,
contingent, fixed, mature, liquidated or otherwise, other than such as may arise
in connection with the transactions contemplated by the Company Financing
Documents. The Owner Participant has no assets other than contractual rights
under the Company Financing Documents, including the Trust Estate. The
Partnership Agreement sets forth the capital structure of the Owner Participant
and the relative interests of the General Partner and the Limited Partners.
(f) No consent, approval or authorization of, or declaration,
registration or filing with, or payment to, any governmental body or any non-
governmental Person is required to be obtained or made in connection with the
execution, delivery and performance by the Owner Participant of the Company
Financing Documents or the transactions contemplated thereby, or as a condition
to the legality, validity or enforceability of the Owner Participant's
obligations under the Company Financing Documents, or the offer, issue, sale or
delivery of the Bonds to the Purchaser of the fulfillment of or compliance with
the terms and provisions of the Company Financing Documents, except for the
recording of the Mortgages, filing of forms UCC-1 and payment of nominal filing
fees in the appropriate offices.
(g) The Owner Participant is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and the
Owner Participant is not directly or indirectly controlled by an investment
company. The Owner Participant is not a "holding company" or a "subsidiary" or
an "affiliate" of a "holding company" or a "public utility" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
(h) The Owner Participant is not in violation of, and is
not subject to any liability under, any environmental laws affecting it or the
Facilities.
4
8
(i) The Owner Participant is not in violation of (x), to the
best of its knowledge, any federal, state, local or foreign law, ordinance or
regulation or (y) any order, judgement, injunction, award or decree or any other
requirement of any government or regulatory body, court or arbitrator
applicable to the business of the Owner Participant or the Facilities.
(j) The consummation of the transactions contemplated by the
Company Financing Documents and the fulfillment of the terms hereof and thereof
as they relate to the Owner Participant, will not violate any material provision
of existing law or regulation, order, judgment, decree or contravene any
provision of the organizational documents of the Owner Participant and
will not conflict with or result in any breach of any of the terms and
provisions of, or constitute a default under, or result in the creation or
imposition of any Owner Trustee Lien or any Lien upon any property of the Owner
Participant pursuant to the provisions of any indenture, mortgage, contract,
agreement or other instrument or documentation to which the Owner Participant is
a party or by which it or its assets are bound.
(k) There are no proceedings or investigations pending or
threatened, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality in any way relating to the Owner
Participant, its General or Limited Partners, or the consummation of the
transactions contemplated by the Company Financing Documents.
(l) The representations and warranties of the Owner
Participant in each of the other Company Financing Documents are true and
correct on the date of the execution and delivery of this Agreement and will
be true and correct on the Closing Date.
(m) No event has occurred and is continuing which is, or
after notice of lapse of time or both would become, a default or Event of
Default under this Agreement or any Company Financing Document.
5
9
2.3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
(a) The Purchaser represents that it is acquiring the Bonds for
its own account and not with a view to the distribution (as such term is used
under Section 2(11) of the Act) thereof; provided that the disposition of the
Purchaser's property shall at all times be and remain within its control.
(b) The Purchaser represents and warrants that no part of the
funds used to purchase the Bonds constitute assets allocated to any separate
account maintained by it in which any plan (or its related trust) has any
interest.
SECTION 3. CLOSING CONDITIONS.
The Purchaser's obligation to purchase the Bonds on the Closing Date
shall be subject to the performance by the Owner Participant and the Owner
Trustee of their respective agreements hereunder and under the other Company
Financing Documents which by the terms hereof or thereof are to be performed at
or prior to the time of delivery of the Bonds and to the following further
conditions precedent:
3.1. OWNER PARTICIPANT'S CLOSING CERTIFICATE. Concurrently with the
delivery of Bonds to the Purchaser on the Closing Date, the Purchaser shall
have received a certificate of the Owner Participant signed by the General
Partner of the Owner Participant in substantially the form of Exhibit A.
3.2. OWNER TRUSTEE'S CLOSING CERTIFICATE. Concurrently with the
delivery of the Bonds to the Purchaser on the Closing Date, the Purchaser shall
have received a certificate of the Owner Trustee signed by an authorized
officer of the Owner Trustee in substantially the form of Exhibit B.
3.3. INDENTURE TRUSTEE'S CLOSING CERTIFICATE. Concurrently with the
delivery of Bonds to the Purchaser on the Closing Date, the Purchaser shall
have received a certificate of the Indenture Trustee signed by an authorized
officer of the Indenture Trustee in substantially the form of Exhibit C.
6
10
3.4. LEGAL OPINIONS. Concurrently with the delivery of Bonds to the
Purchaser on the Closing Date, the Purchaser shall have received from Xxxxx
Xxxx, special counsel to the Owner Participant, Squire, Xxxxxxx & Xxxxxxx,
special counsel to XXXXXXXXXX, as placement agent, Day Xxxxx & Xxxxxx, special
counsel to the Owner Trustee, Xxxxx & Wood, special counsel to the Indenture
Trustee, Xxxxxxx X. Xxxxxxx, Executive Vice President, General Counsel of Kmart
Corporation, Xxxx, Xxxxx & Xxxxx, special counsel to the Owner Trustee in
Alaska, Xxxxx Xxxx, special counsel to the Owner Trustee in California, Xxxxx
and Xxxx, P.C., special counsel to the Owner Trustee in Connecticut, Pitney,
Xxxxxx, Xxxx & Xxxxx, special counsel to the Owner Trustee in New Jersey,
Cohan, Simpson, Xxxxxxxxx, Xxxxxx & Xxxxx, special counsel to the Owner Trustee
in Texas, and Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, special counsel to the
Purchasers, their respective favorable opinions, dated the Closing Date, in
form and substance satisfactory to the Purchaser.
3.5. RELATED TRANSACTIONS. Prior to or concurrently with the
issuance and sale of Bonds to the Purchaser on the Closing Date, each party
thereto shall have executed and delivered the Indenture, the Mortgages and all
other Company Financing Documents in form and substance satisfactory to the
Purchaser.
3.6. TITLE. The Owner Trustee shall have good and marketable,
indefeasible, fee simple title to the Facilities, free and clear of all liens
and encumbrances except Permitted Encumbrances.
3.7. FILING OF MORTGAGES AND FINANCING STATEMENTS. The Owner Trustee
shall have (i) caused the Mortgages and all required Uniform Commercial Code
financing statements and all other documents and instruments requested by the
Purchaser to be duly recorded or filed in the manner required by the laws of
relevant jurisdictions in which the Facilities are located and (ii) paid, or
caused to be paid, all filing fees and recording charges and mortgage taxes
incurred in connection therewith, and such recordings and filings shall be
satisfactory to the Purchaser and its special counsel.
3.8. TITLE INSURANCE. The Indenture Trustee shall have received
A.L.T.A. Standard Loan Policies of title insurance covering each of the
Facilities (or valid, binding unconditional commitments therefor), dated the
Closing Date,
7
11
in the 1970 A.L.T.A. form where available and including mechanics' and
materialmen's lien coverage, issued by a title insurance company satisfactory
to the Purchaser and with such reinsurance as may be required by the
Purchaser. Such policy shall (i) insure (a) the Mortgages described therein as
a first lien on the Facility described therein subject to no other liens or
encumbrances or restrictions except Permitted Encumbrances, which shall be
fully identified thereon, (b) that any restrictions or easements affecting such
Facility have not been violated and that a future violation thereof will not
result in a forfeiture or reversion of title, and (c) that all streets
adjoining such Facility have been completed, dedicated and accepted for public
maintenance and use by the appropriate governmental authorities, (ii) be in an
aggregate amount of not less than $100,505,000 and in individual amounts per
Facility not less than those set forth on Exhibit D [to the extent that
insurance coverage are available under State insurance regulation] and (iii) be
satisfactory in all other respects to the Purchaser. The Owner Trustee will
provide the Purchaser with such endorsements to the title insurance policies as
the Purchaser may reasonably request.
3.9. A.L.T.A. SURVEY. The Purchaser shall have received a copy of
a final A.L.T.A. as-built survey of each of the Facilities, certified not more
than 20 days before the Closing Date, each such survey to be satisfactory in
form and substance to the Purchaser, and to include (i) a metes and bounds
description (or an otherwise sufficient legal description) of such Facility,
(ii) all lot and street lines, (iii) a statement of whether such Facility is
located in a flood plain or zone as designated by any governmental authority
and (iv) the location of improvements, easements and rights of way (identified
by reference to the recorded instrument creating the same, if any) and
encroachments, if any, prepared and duly certified by the title company, the
Indenture Trustee under the Mortgages and the Purchaser as an accurate survey
by a surveyor duly licensed in the State in which such Facility is located.
3.10. INSURANCE. The Purchaser shall have received satisfactory
evidence of self insurance by Kmart as contemplated by the Leases and the
Indenture.
3.11. APPRAISAL OF FACILITIES. The Purchaser shall have received
an appraisal of each of the Facilities satisfactory to the Purchaser by an
appraisal company acceptable to the Purchaser and cost of which shall be paid
8
12
by the Owner Participant or Kmart indicating an aggregate market value of all
Facilities of not less then 106.4% of the aggregate principal amount of the
Bonds.
3.12. PHASE I ENVIRONMENTAL AUDIT REPORT. The Purchaser shall
have received, at the Owner Participant's expense, a Phase I environmental
audit report on each of the Facilities, by an environmental consulting company
acceptable to the Purchaser and such additional information as may be requested
with respect thereto, in each case satisfactory in form and substance to the
Purchaser.
3.13. GOVERNMENT LICENSES. The Purchaser shall have received a
copy of all certificates, permits and licenses of governmental authorities
or inspection organizations as are required or are customarily procured in
connection with the construction, use, occupancy and operation of each of the
Facilities, and each such certificate, permit and license shall be in full
force and effect as of the Closing Date.
3.14. LEGAL COMPLIANCE. The Purchaser shall have received
evidence satisfactory to it that there does not exist any material violation of
any law, regulation or order affecting any of the Facilities, including,
without limitation, laws, regulations and orders relating to (i) zoning,
subdivision and building restrictions and (ii) hazardous waste, asbestos or
other environmental conditions.
3.15. CONDITION OF FACILITIES. On the Closing Date, each of the
Facilities shall be (i) undamaged by fire or other causes and (ii) unaffected
by any pending or threatened condemnation proceeding.
3.16. ARCHITECTS CERTIFICATE. The Purchaser shall have received
one or more architect's certificates certifying, among other things, that the
Improvements have been constructed in a good and workmanlike manner and in
compliance with all applicable laws, that all roads, easements, utilities and
other services necessary for access to the Improvements and the full
utilization of the Improvements have been constructed, entered into or are
available.
3.17. TAX LOT CONSISTENT WITH MORTGAGES. The Purchaser shall have
received evidence satisfactory to it that the description of the tax lot or
lots covering each of
9
13
the Facilities does not include any lands or buildings other than those
described in the Mortgages.
3.18. CERTIFICATE EVIDENCING COST OF CONSTRUCTION. The
Purchaser shall have received a certificate in form and substance satisfactory
to it evidencing the cost to Kmart of construction of each Facility (including
the cost of the Facilities, the cost of constructing the Facilities and the
cost of any Improvements thereto).
3.19. RATINGS. The Bonds shall have a National Association of
Insurance Commissioner's ("NAIC") rating of "1" and the Purchaser shall have
received written evidence thereof.
3.20. PRIVATE PLACEMENT NUMBER APPLICATION. A private
placement number for the Bonds shall have been received from Standard & Poor's
Corporation.
3.21. LEGALITY. The Bonds shall qualify as a legal
investment for the Purchaser under the laws and regulations of the jurisdiction
to which the Purchaser is subject and the Purchaser shall have received such
information concerning the Owner Participant, Owner Trustee, the Trust, Kmart
and the Facilities as the Purchaser shall reasonably request to establish such
fact.
3.22. NO DEFAULT OF EVENT OF DEFAULT. On the Closing Date,
no event shall have theretofore occurred which is, or after notice or lapse of
time or both would become, a default or Event of Default under any Company
Financing Document.
3.23. SATISFACTORY PROCEEDINGS. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary for the consummation thereof, shall be satisfactory in form
and substance to the Purchaser and Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx,
and the Purchaser shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in connection with the
consummation of such transactions.
3.24. COSTS AND EXPENSES. The Owner Participant shall have
paid or provided for the payment of all expenses that the Owner Participant is
obligated to pay pursuant to Section 8.5. In addition, the Purchaser shall
have received reasonable assurance in writing that all other fees and
10
14
expenses incurred by any other Person in connection with the Owner Trustee's
acquisition of the Facilities and the transactions contemplated hereunder shall
have been paid on or prior to the Closing Date.
3.25. AUTHENTICATION REQUESTS. The Owner Trustee shall have
delivered to the Indenture Trustee a request in writing, dated as of the
Closing Date, authorizing and requesting the Indenture Trustee to authenticate
and, upon further instructions of the Owner Trustee (which may be oral
instructions), to deliver the Bonds in the principal amount of $100,505,000.
3.26. REPRESENTATIONS AND WARRANTIES IN COMPANY FINANCING
DOCUMENTS, ETC.
(a) All representations and warranties of the Owner
Participant, Owner Trustee, Indenture Trustee, Kmart and the Lessees set forth
(or incorporated) herein and in any of the other Company Financing Documents
shall have been true and correct in all material respects as of the time at
which such representations and warranties were made and shall be true and
correct in all respects on the Closing Date (except to the extent that such
representations and warranties expressly relate to an earlier date) as if such
representations and warranties were made on and as of such dates, and all
covenants herein and therein of the Owner Participant, Owner Trustee and each
other party thereto have been, and on the Closing Date will be, complied with in
all respects.
(b) If the Closing Date the Owner Trustee fails to
cause the Indenture Trustee to tender to any purchaser of Bonds to be issued on
such date pursuant to the other Bond Purchase Agreements entered into as of the
date hereof among the Owner Trustee, the Owner Participant and other purchasers
of Bonds or if the conditions specified in this Section 3 have not been
fulfilled, the Purchaser may thereupon elect to be relieved of all further
obligations under this Agreement and the other Company Financing Documents.
Without limiting the foregoing, if the conditions specified in this Section 3
have not been fulfilled, the Purchaser may waive compliance with any such
condition to such extent as the Purchaser may, in its sole discretion,
determine. Nothing herein shall operate to relieve the Owner Participant or
Owner Trustee of any of its obligations hereunder, including without limitation
the payment of any expenses pursuant to Section 8.5 or to waive any of the
11
15
Purchaser's rights against the Owner Participant or the Owner Trustee.
3.27. SALE OF BONDS TO EACH PURCHASER. On the Closing Date
each Other Purchaser shall have purchased the principal amount of Bonds set
forth opposite such Other Purchaser's name in Schedule I hereto.
SECTION 4. COVENANTS.
4.1. COVENANTS OF THE OWNER PARTICIPANT. The Owner
Participant hereby unconditionally covenants and agrees with each of the other
parties hereto as follows, on which the Purchaser relies in purchasing the
Bonds in accordance with this Agreement:
(a) The Owner Participant shall not directly or
indirectly create, incur, assume or suffer to exist any Owner Trustee Liens
attributable to it or any of its Affiliates (excluding for purposes hereof the
Owner Trustee in both its fiduciary and trust capacities) on or against any of
the Facilities, the Owner Trustee's interest in the Leases, the Mortgages or
any other interest in the Facilities, and the Owner Participant agrees that it
will, at its own cost and expense (without right to indemnity), take such
action as may be necessary to duly discharge and satisfy in full any such Owner
Trustee Lien, except for any Owner Trustee Lien attributable to the Lessee that
is being contested by the Lessee in good faith and by appropriate proceedings
diligently conducted, so long as such proceedings do not (i) involve any danger
of the sale, forfeiture or loss of any of the Facilities, (ii) interfere with
the use, possession or disposition of any of the Facilities, (iii) interfere
with the payment of Annual Rental or Additional Rent under (and as defined in)
any of the Leases, or (iv) impair the validity, perfection or priority of the
Lien of the Indenture or the Mortgages. After the indefeasible Payment in
full of all Bond Obligations, the Owner Participant may create, incur, assume
or suffer to exist any Owner Trustee Liens attributable to it or any of its
Affiliates on or against any of the Facilities. The Owner Participant agrees
to reimburse the Purchasers and the Indenture Trustee for all reasonable legal
fees and expenses that may be incurred by the Purchasers and the Indenture
Trustee as a result of the failure of the Owner Participant to discharge and
satisfy any such Owner Trustee Lien.
12
16
(b) The Owner Participant shall not take any action
to interrupt the Owner Trustee's, any Registered Owner's, or any Lessee's
peaceable possession, use and enjoyment of the Facilities.
(c) The Owner Participant shall comply with all of
the terms of the Trust Agreement applicable to it and, while any of the Bonds
are outstanding or any Bond Obligations remain unpaid or the Lien of the
Mortgages or the Indenture has not been satisfied and discharged, it shall not,
without the prior written consent of Registered Owners of Outstanding Bonds
representing 100% of the principal amount of Outstanding Bonds, take any action
to (i) adversely affect the validity, perfection or priority of the Lien of the
Indenture or the Mortgages, or any rights of the Indenture Trustee under the
Indenture or the Mortgages or (ii) terminate or revoke the Trust Agreement or
the trusts thereby created or cause, suffer or permit the Owner Trustee to
transfer any interest in the Facilities.
(d) The Owner Participant shall, at its expense,
cause to be promptly and duly taken, executed, acknowledged, delivered and
recorded all such further acts, documents and assurances as the Owner Trustee,
Indenture Trustee or the Required Bondowners from time to time may reasonably
request in order to carry out more effectively the intent and purposes of this
Agreement and the other Company Financing Documents and the transactions
contemplated hereby and thereby provided that any amounts payable under this
subsection (d) shall be limited to the amounts paid or payable to the Owner
Participant from the Trust Estate.
(e) The Owner Participant shall comply with all
laws, statutes, regulations, rules and orders and all restrictions imposed by
any governmental or regulatory body, in each case to which it is subject. The
Owner Participant shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent (i) all taxes, assessments and
governmental charges levied or imposed upon it or upon its income, profits or
property and (ii) all claims for labor, material and supplies which, if unpaid
might by law or otherwise become a Lien upon any of its property.
(f) Upon becoming aware of any event which is, or
with notice or lapse of time or both would become, a default or Event of
Default in the performance of any
13
17
covenant, agreement or condition contained in any Company Financing Document,
the Owner Participant shall promptly deliver an Officer's Certificate to the
Owner Trustee identifying the event, its status and what action the Owner
Participant is taking or proposes to take with respect thereto.
(g) Neither the Owner Participant nor any of its
General or Limited Partners, shall take any steps to procure or obtain the
commencement of any voluntary, involuntary bankruptcy or insolvency proceeding
against the Owner Trustee or the Trust.
(h) Without the prior consent of the Required
Bondowners, neither the Owner Participant, nor any of its General or Limited
Partners, shall be a party to, or acquiesce in, any amendment, supplement or
modification to any of the Company Financing Documents to which the Owner
Participant is a party.
4.2 COVENANTS OF THE OWNER TRUSTEE. Each of the covenants of
the Owner Trustee made or to be made by the Owner Trustee in the Indenture and
the other Company Financing Documents shall be incorporated herein as if set
forth in their entirety on which the Purchaser relies in purchasing the Bonds
in accordance with this Agreement.
SECTION 5. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
5.1. NOTICE TO HOLDERS. Whenever the Owner Trustee or Owner
Participant becomes aware that any event has occurred that is, or after notice
or lapse of time or both would become, a default or Event of Default under any
Company Financing Document, or if the Owner Trustee or Owner Participant is
aware that Kmart, any Lessee, the Indenture Trustee or any Bondholder has
either given any notice or taken any other action with respect to any such
event, or the Owner Trustee or Owner Participant receives written notice from a
third party concerning any such event, the Owner Trustee or Owner Participant,
as the case may be, will give notice (or forward such third party notice) to
the Indenture Trustee and all Registered Bondowners, no later than the earlier
of the day that such notice has been given or such other action has been taken
with respect to such event,
14
18
such notice to be in writing and sent in the manner provided in the Indenture.
5.2. REMEDIES. The Owner Trustee shall pay to the Registered
Owner or Owners of the Bonds all costs and expenses incurred by them in the
collection of any Bond upon any default or Event of Default hereunder or
thereon, including all fees, disbursements and other charges of each such
holder's or holders' attorneys for all services rendered in connection
therewith.
The rights and remedies expressly provided for in this
Agreement and the other Company Financing Documents are cumulative and not
exclusive of any rights or remedies which the Purchaser or any Bondholder would
have at law, in equity or otherwise, including, without limitation, the rights
and remedies provided for in the Indenture and the Mortgages.
SECTION 6. AMENDMENTS, WAIVERS AND CONSENTS
6.1. CONSENT REQUIRED. No term, covenant, agreement or
condition of this Agreement may be amended or compliance therewith waived
(either generally or in a particular instance and either retroactively or
prospectively), without consent in writing of the Required Bondowners, other
than with respect to provisions requiring the approval of the Bondholders of a
greater percentage of principal amount of Outstanding Bonds.
6.2. SOLICITATION OF HOLDERS. So long as there are any Bonds
outstanding, neither the Owner Participant nor Owner Trustee will, directly or
indirectly, solicit, request or negotiate for or with respect to any proposed
waiver or amendment of any of the provisions of this Agreement or the Bonds or
the other Company Financing Documents unless each Bondholder (irrespective of
the amount of Bonds then owned by it) shall be informed thereof by the Owner
Trustee, shall be afforded the opportunity to consider the same and shall be
supplied with sufficient information to enable it to make an informed decision
with respect thereto. Neither the Owner Participant nor the Owner Trustee
will, directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise, to any
Bondholder as consideration for or as an inducement to entering into by any
Bondholder of any waiver or amendment of any of the terms and provisions of
15
19
this Agreement or the Bonds or the other Company Financing Documents unless
such remuneration is concurrently offered, on the same terms, ratably to all
Registered Owners.
6.3. EFFECT OF AMENDMENT OR WAIVER. Any such amendment or
waiver shall apply equally to all of the Bondholders and shall be binding upon
them, upon each future Bondholder and upon the Owner Participant and the Owner
Trustee (and in the case of the Mortgages and the Indenture, the Indenture
Trustee), whether or not such Bond shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend to or affect any
obligation not expressly amended or waived or impair any right consequent
thereon.
SECTION 7. INTERPRETATION OF AGREEMENT; DEFINITIONS
Unless the context otherwise requires, the capitalized terms
hereinafter set forth when used herein shall have the following meanings and
the following definitions shall be equally applicable to both the singular and
plural forms of any of the terms herein defined. Capitalized terms used but
not otherwise defined herein shall have the respective meanings ascribed
thereto in the Indenture.
"ACT" means the Securities Act of 1933, as amended.
"AFFILIATES" shall have the meaning assigned thereto in the
Indenture.
"AGREEMENT" refers to this Bond Purchase Agreement among the
Purchaser, the Owner Trustee and the Owner Participant dated the date hereof,
as from time to time in effect.
"BONDHOLDER" means the Purchaser and each other Registered
Owner (as defined in the Indenture).
"CLOSING DATE" shall have the meaning assigned thereto in
Section 1.1.
"COMPANY FINANCING DOCUMENTS" means the Leases, the Lease
Guaranties, the Indenture, the Bonds, the Mortgages, the Assignments of Leases
and Rents, the Bond Put Agreement, the Real Estate Transfer Documents, this
16
20
Agreement, the Trust Agreement and all other documents delivered upon the
Closing Date and all amendments, modifications and supplements thereto and such
other documents and instruments as are entered into after the date hereof and
for the benefit of the Trustee or the Registered Owners.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed to also refer to any
successor sections.
"EVENT OF DEFAULT" means an Event of Default as defined in
Section 7.01 of the Indenture and/or Section 5.01 of the Mortgages.
"FACILITY" and "FACILITIES" shall have the meaning assigned
thereto in the Indenture.
"GENERAL PARTNER" means XXXXXXXXXX, a Michigan Corporation.
"IMPROVEMENTS" shall have the meaning assigned thereto in the
Mortgages.
"INDEMNIFIED LIABILITIES" shall have the meaning assigned
thereto in Section 8.5.
"INDEMNITEES" shall have the meaning assigned thereto in
Section 8.5.
"INDENTURE" shall have the meaning assigned thereto in the
WHEREAS clause.
"KMART" shall have the meaning assigned thereto in the
Indenture.
"LIMITED PARTNERS" means XXXXXXXXXX and XXXXXXXXXX.
"MORTGAGES" means, collectively, the mortgage/deed of trust,
security agreement, assignment of leases and rents and fixture filing relating
to each Facility, executed by the Owner Trustee and granting to the Indenture
Trustee a valid first priority lien on such Facility to secure, among other
things, the Bonds.
17
21
"OTHER PURCHASERS" shall have the meaning assigned thereto in
Section 1.2.
"OWNER PARTICIPANT" means XXXXXXXXXX, its successors and
assigns.
"OWNER TRUSTEE" means XXXXXXXXXX, not in its individual
capacity, except as otherwise specifically set forth herein, but solely as
trustee under the Trust Agreement.
"OWNER TRUSTEE LIEN" shall have the meaning assigned thereto
in the Indenture.
"PARTNERSHIP AGREEMENT" means the Agreement of Limited
Partnership dated as of December 1, 1992, between the Limited Partners and the
General Partner.
"PERMITTED ENCUMBRANCES" means those permitted encumbrances
listed on Exhibit B to the Mortgages.
"PERSON" means an individual, partnership, corporation, trust
or unincorporated organization, and a government or agency or political
subdivision thereof.
"PLAN" means any United States "employee benefit plan," as
defined in Section 3(3) of ERISA, or "plan," as defined in Section 4975 of the
Internal Revenue Code of 1986, as amended.
"PURCHASE PRICE" shall have the meaning assigned thereto in
Section 1.1.
"PURCHASER" shall have the meaning assigned thereto in the
first Paragraph hereof.
"REQUIRED BONDOWNERS" shall have the meaning assigned thereto
in the Indenture.
"TRANSACTIONS" means the transactions contemplated by the
Company Financing Documents.
"TRUST AGREEMENT" means that certain Trust Agreement, dated as
of the date hereof, between the Owner Participant and the Owner Trustee.
18
22
"TRUST ESTATE" shall have the meaning assigned thereto in the
Indenture.
SECTION 8. MISCELLANEOUS
8.1. REGISTERED BONDS. The Bonds are not transferable except
as provided in the Section 2.05 of the Indenture.
8.2. EXCHANGE OF BONDS. Bonds may be exchanged by the
Registered Owners thereof as provided in Section 2.06 of the Indenture.
8.3. LOSS, THEFT, ETC. OF BONDS. Mutilated, destroyed, lost
or stolen Bonds may be replaced as provided in Section 2.07 of the Indenture.
8.4. DIRECT PAYMENTS. Direct payments of the Bonds shall be
made in accordance with Section 2.03 of the Indenture.
8.5. EXPENSES, DEED TAX, TRANSFER TAX, MORTGAGE RECORDING TAX
AND STAMP TAX INDEMNITY. Whether or not the transactions herein contemplated
shall be consummated, the Owner Participant shall pay directly all of its and
the Purchaser's out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the other Company Financing
Documents, including but not limited to the fees, disbursements and other
charges of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, the Purchaser's special
counsel, duplicating and printing costs and charges for shipping the Bonds,
adequately insured to the Purchaser at the Purchaser's home office or at such
other place as the Purchaser may designate on the signature pages hereof. The
Owner Participant shall pay all of its out-of-pocket expenses in connection
with the preparation, execution and delivery of this Agreement and the other
Company Financing Documents, including but not limited to the fees and expenses
of Xxxxx Xxxx, XXXXXXXXXX and XXXXXXXXXX. The Owner Participant also shall
pay or cause to be paid all expenses relating to the performance of the
Transactions, any title insurance premiums, mortgage recording taxes, filing
or other recording fees, any action for the enforcement or collection of the
Bonds or this Agreement and any amendments, waivers or consents pursuant to
the provisions hereof (whether or not the same are actually executed and
delivered), including,
19
23
without limitation, any amendments, waivers or consents resulting from any
workout, restructuring or similar proceedings relating to the performance by
the Owner Participant and Owner Trustee of their obligations under this
Agreement, the Bonds and the other Company Financing Documents. The Owner
Participant shall pay, from amounts paid or payable to the Owner Participant
from the Trust Estate, all initial and ongoing fees and all out-of-pocket
expenses of the Owner Trustee, if any, and will pay and save the Purchaser
harmless against any and all liability with respect to stamp, deed, transfer,
mortgage recording and other similar taxes, if any, which may be payable or
which may be determined to be payable in connection with the Owner Trustee's
acquisition of the Facilities or the execution, delivery or enforcement of
this Agreement or the Bonds or any other Company Financing Documents,
whether or not any Bonds are then Outstanding. The Owner Participant shall
protect and indemnify the Purchaser against any liability for any and all
brokerage fees and commissions payable or claimed to be payable to any Person
in connection with the transactions contemplated by this Agreement,
provided that any amounts payable under this sentence shall be limited to
amounts paid or payable to the Owner Participant from the Trust Estate. Without
limiting the foregoing, the Owner Participant shall pay the cost of obtaining a
private placement number for the Bonds and authorizes the submission of such
information to Standard & Poor's Corporation as may be necessary for the
purpose of obtaining such number. In addition to the payment of expenses as
aforesaid, whether or not the Transactions shall be consummated, the Owner
Participant shall, to the fullest extent permitted by law, indemnify, pay and
hold the Purchaser, and the officers, directors, agents and Affiliates of the
Purchaser (collectively, the "Indemnitees") harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, all fees and disbursements of
counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnitee shall be designated a party thereto), which may be imposed on,
incurred by or asserted against that Indemnitee, in any manner relating to or
arising out of this Agreement, the Transactions, the Company Financing
Documents or any transactions contemplated hereby or thereby or the use or
intended use of the proceeds of any portion of the Bonds (including such as may
result from the occurrence of a
20
24
default or Event of Default) (all of the foregoing being collectively referred
to as the "Indemnified Liabilities") other than to the extent that such
Indemnified Liabilities are determined by a court of competent
jurisdiction by final and non-appealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee; provided, however,
that the "Indemnified Liabilities" shall not include a deficiency in the
payment of principal, interest or Make-Whole Premium, if any, on the Bonds (it
being agreed that the foregoing limitation shall not limit any rights of the
Indemnitees against the Trust Estate or amounts paid or payable to the Owner
Participant therefrom). To the extent that the undertaking to indemnify, pay
and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Owner Participant will
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, subject to the limitation provided for herein, to the payment
and satisfaction of all Indemnified Liabilities incurred by the Indemnitees or
any of them.
8.6. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE. No
delay or failure on the part of any Bondholder in the exercise of any power or
right shall operate as a waiver thereof; nor shall any single or partial
exercise of the same preclude any other or further exercise thereof, or the
exercise of any other power or right. The rights and remedies of the Purchaser
pursuant to this Agreement and the other Company Financing Documents are
cumulative to, and are not exclusive of, any rights or remedies any such
Purchaser would otherwise have, and no waiver or consent, given or extended
pursuant to Section 6, shall extend to or affect any obligation or right not
expressly waived or consented to.
8.7. NOTICES. All communications provided for hereunder
shall be given in accordance with the provisions of Sections 13.04 and 13.05 of
the Indenture and the instructions on the signature pages hereof.
8.8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Owner Participant and the Owner Trustee and their respective
successors and assigns and shall be binding upon and inure to the benefit of
the Purchaser and its successors and assigns, including each successive
Bondholder or Bondholders. Each such successive Bondholder or Bondholders
shall have all rights and privileges of the Purchaser hereunder.
21
25
8.9. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All
covenants, representations and warranties made by the Owner Participant or the
Owner Trustee herein and in any other Company Financing Document and in any
certificates delivered pursuant hereto or thereto, whether or not in connection
with the Closing Date, shall survive the closing and the delivery of this
Agreement and the Bonds.
8.10. SEVERABILITY. Should any provision or provisions of
this Agreement or any of the other Company Financing Documents for any reason
be declared unenforceable by a court of competent jurisdiction (sustained on
appeal, if any), such unenforceability shall not affect the enforceability of
any other provision hereof or thereof, all of which shall remain in full force
and effect as if this Agreement or such other Company Financing Document had
been executed with the unenforceable provision thereof eliminated. It is
hereby declared the intention of the parties hereto that they would have
executed the remaining provisions of this Agreement and such other Company
Financing Documents without including therein any such provision or provisions
which may, for any reason, be hereafter declared unenforceable; provided that,
if any provision of this Agreement or any of the other Company Financing
Documents shall be unenforceable by reason of a final judgment of a court of
competent jurisdiction based upon a court's ruling (sustained on appeal, if
any) that such provision is unenforceable because of the excessive degree or
magnitude of the obligation imposed thereby on the Owner Participant or Owner
Trustee, that unenforceable obligation shall be reduced in magnitude or degree
by the minimum degree or magnitude necessary in order to permit the provision
to be enforceable by any Purchaser. In the event that the provisions of the
immediately preceding sentence apply, the parties shall make appropriate
adjustment to the provisions of this Agreement and the other Company Financing
Documents to give effect to the benefits intended to be conferred upon the
parties hereby.
8.11. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, other than
conflicts of law principles
8.12. SUBMISSION TO JURISDICTION. The Owner Participant and
the Owner Trustee hereby consent to the jurisdiction of any state or federal
court located within the County of New York, State of New York, and irrevocably
agree that all actions or proceedings (except that actions
22
26
and proceedings for the enforcement of the Mortgages and other Real Estate
Transfer Documents may be brought in the jurisdiction in which the relevant
Facility is located) relating to this Agreement, the Bonds and other Company
Financing Documents may be litigated in such courts, and each of the
Owner Participant and the Owner Trustee waive any objection which either
such entity may have based on improper venue or forum non conveniens to
the conduct of any proceeding in any such court, and waive personal service of
any and all process upon it, and consent that all such service of process be
made by registered or certified mail (return receipt requested) or messenger
directed to it at its address set forth in the Indenture or to its agent
referred to below at such agent's address set forth below and that service
so made shall be deemed to be completed in accordance with Section 8.7
hereof. The Owner Participant and the Owner Trustee hereby irrevocably
appoint [The Prentice Hall Corporation System, Inc., with an office on the
date hereof at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or CT Corporation
System, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000], as the agent for the
purpose of accepting service of any process within the State of New York.
Nothing contained in this Section shall affect the right of any Bondholder to
serve legal process in any other manner permitted by law or to bring any
action or proceeding in the courts of any jurisdiction against the Owner
Participant or the Owner Trustee or to enforce a judgment obtained in the
courts of any other jurisdiction.
8.13 CAPTIONS. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only, and shall not affect the
meaning or construction of any of the provisions hereof.
8.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
23
27
Owner Trustee:
XXXXXXXXXX
By: /s/
--------------------------------
Name: XXXXXXXXXX
Title: ASSISTANT VICE PRESIDENT
28
Owner Participant:
XXXXXXXXXX
By: XXXXXXXXXX,
its General Partner
By: /s/
----------------------------
Name:
Title:
29
[PURCHASER SIGNATURE PAGES INTENTIONALLY OMITTED]
30
[EXHIBITS AND SCHEDULES INTENTIONALLY OMITTED]
