EXECUTION COPY
SECURITIES PLEDGE AGREEMENT
SECURITIES PLEDGE AGREEMENT, dated as of June 17, 1996,
made by each of the undersigned corporations (each, a "Pledgor"
and, collectively, the "Pledgors"), in favor of First Trust of
New York, National Association, a National Banking Association,
and Xxxx X. Xxxxxxx, not individually but solely as Trustees
under the Trust Agreement, dated as of June 17, 1996, as amended
(the "Trust Agreement"), among the Pledgors and the Trustees.
1. Defined Terms. (a) The capitalized terms used
herein which are defined in, or by reference in, the Trust
Agreement referred to above shall have the meanings specified
therein.
(b) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Securities Pledge
Agreement shall refer to this Securities Pledge Agreement as a
whole and not to any particular provision of this Securities
Pledge Agreement.
2. Pledge. (a) To secure the due and punctual
payment of all Senior Secured Obligations, howsoever created,
arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing or due or to become due, in
accordance with the terms thereof and to secure the due and
punctual performance of all of the obligations of each of the
Obligors contained in the Security Documents, the Senior Secured
Instruments and the Trust Agreement, each Pledgor hereby pledges
to the Trustees, and hereby grants to the Trustees a security
interest in, all of such Pledgor's right, title and interest in
and to the following:
(i) the shares of capital stock set forth on
Schedule A hereto and other shares of capital stock pledged
hereunder from time to time hereafter pursuant to Section
3(d) hereof (all such shares being herein collectively
called the "Pledged Stock");
(ii) all Investment Securities;
(iii) all Cash Equivalents (including, without
limitation, any Permitted Book-Entry Securities) and funds
held or on deposit from time to time in the Securities
Accounts; and
(iv) all Proceeds, except as provided for in Section 4
hereof, of any and all of the foregoing items described in
clauses (i) through (iii) above.
The items described in clauses (i) through (iv) above are herein
collectively called the "Pledged Securities".
(b) Each Pledgor hereby delivers to the Corporate
Trustee the stock certificates representing the Pledged Stock
pledged by it as set forth on Schedule A hereto, together with
related undated stock powers duly executed in blank. Each
Pledgor agrees to deliver to the Corporate Trustee related
undated stock powers or bond powers, as appropriate, duly
executed in blank for the Pledged Securities pledged by it
hereunder from time to time hereafter.
3. After-Acquired Pledged Securities. (a) If, after
the date hereof, any Pledgor shall become entitled to receive or
shall receive any Investment Securities, such Pledgor agrees to
accept the same as the Trustees' agent and to hold the same in
trust on behalf of and for the benefit of the Trustees and to
deliver the same (except for Instruments which such Pledgor is
not required to deliver under subsection 7.10 of the Kmart Credit
Agreement and Investment Securities not required to be delivered
pursuant to subsection 7.11(d) of the Kmart Credit Agreement)
forthwith to the Corporate Trustee in the exact form received,
with the appropriate undated powers as provided in Section 2(b)
hereof, to be held by the Corporate Trustee as Pledged
Securities, subject to the terms of this Securities Pledge
Agreement, as additional collateral security for the Senior
Secured Obligations.
(b) If, while this Securities Pledge Agreement is in
effect, any Pledgor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any
certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of
capital, or issued in connection with any reorganization), or any
instrument, certificate or other writing representing or
constituting an option or right to acquire securities, whether as
an addition to, in substitution of, or in exchange for, any
shares of any Pledged Stock, or otherwise (other than shares of
stock or instruments or other property of third parties delivered
to such Pledgor as collateral for the obligations of such third
parties), such Pledgor agrees to accept the same as the Trustees'
agent and to hold the same in trust on behalf of and for the
benefit of the Trustees and to deliver the same forthwith to the
Corporate Trustee in the exact form received, with appropriate
undated powers as provided in Section 2(b) hereof, to be held by
the Corporate Trustee as Pledged Securities, subject to the terms
of this Securities Pledge Agreement, as additional collateral
security for the Senior Secured Obligations, and the same shall
constitute "Pledged Stock" for all purposes of this Securities
Pledge Agreement.
(c) If, while this Securities Pledge Agreement is in
effect, any Pledgor shall become entitled to receive any note,
bond, debenture, instrument, stock certificate or any instrument,
certificate or other writing representing or constituting an
option or right to acquire securities (other than any of the
foregoing constituting property of third parties which is
delivered to such Pledgor as collateral for the obligations of
such third parties), whether as an addition to, in substitution
of, or in exchange for any Investment Securities, or in payment
of the principal of any Investment Securities, such Pledgor
agrees to accept the same on behalf of and for the benefit of the
Trustees and to deliver the same (except for Instruments which
such Pledgor is not required to deliver under subsection 7.10 of
the Kmart Credit Agreement and Investment Securities not required
to be delivered pursuant to subsection 7.11(d) of the Kmart
Credit Agreement) forthwith to the Corporate Trustee in the exact
form received, with appropriate undated powers as provided in
Section 2(b) hereof, to be held by the Corporate Trustee as
Pledged Securities, subject to the terms of this Securities
Pledge Agreement, as additional collateral security for the
Senior Secured Obligations, and the same shall constitute
"Investment Securities" for all purposes of this Securities
Pledge Agreement.
(d) If, after the Effective Date, any Pledgor shall
desire to pledge the shares of a Subsidiary which have not
previously been pledged hereunder, such Pledgor shall pledge such
shares to the Trustees and shall deliver to the Corporate Trustee
stock certificates representing all of such shares of capital
stock of such Subsidiary, together with appropriate undated
powers as provided in Section 2(b) hereof, to be held by the
Corporate Trustee as Pledged Securities, subject to the terms of
this Securities Pledge Agreement, as additional collateral
security for the Senior Secured Obligations.
(e) Notwithstanding anything to the contrary herein,
no Pledgor shall be required to pledge Temporary Cash Equivalent
Investments or stock or other equity securities issued by any
Person if the stock of such Person does not constitute Pledged
Stock on the Effective Date (except to the extent required by the
Kmart Credit Agreement) or if, in respect of a Foreign Subsidiary
or Foreign Holding Company (as such terms are defined in the
Kmart Credit Agreement), the aggregate portion of stock of such
Person that is Pledged Stock would exceed 65% of the outstanding
Capital Stock of such Person.
4. Cash Dividends; Exercise of Rights. (a) Unless a
Notice of Acceleration is in effect, each Pledgor shall be
entitled, except as provided in Section 6 hereof and in Section 9
hereof, to receive all distributions (including, without
limitation, dividends and interest payments), in respect of the
Pledged Securities and to vote the Pledged Securities and to
exercise any and all rights and options included in the Pledged
Securities and to give consents, waivers and ratifications in
respect of the Pledged Securities; provided, however, that no
vote shall be cast or consent, waiver or ratification given or
action taken which would materially impair the value of the
Pledged Securities or be inconsistent with or violate any
provision of this Securities Pledge Agreement or the Trust
Agreement.
(b) In order to permit each Pledgor to exercise the
powers of voting and/or consent retained by such Pledgor under
Section 4(a) hereof and to receive such payments as such Pledgor
is entitled to receive and retain under said Section, the
Trustees shall, if necessary, upon the written request of such
Pledgor, from time to time execute and deliver to such Pledgor
appropriate proxies and dividend or payment orders. The Trustees
shall have no responsibilities for the manner in which any such
proxy is exercised or any duty to see to the application of any
such payments. In order to permit the Trustees to receive all
distributions to which they are entitled under Section 3 hereof
and Section 6 hereof, each Pledgor shall, if necessary, from time
to time execute and deliver to the Corporate Trustee, upon its
request, appropriate dividend or payment orders. If any Pledgor
shall not have executed and delivered any such dividend or
payment order within three Business Days after it receives a
written request from the Corporate Trustee to do so, the
Corporate Trustee may execute the same on behalf of such Pledgor.
Each Pledgor hereby appoints the Corporate Trustee as its agent
and attorney to act for it as provided in the next preceding
sentence.
5. Rights of the Trustee and the Senior Creditors.
While a Notice of Acceleration is in effect, without notice to
any Pledgor, the Trustees may transfer or register or have
registered in the name of the Corporate Trustee or the Corporate
Trustees' nominee any and all of the Pledged Securities which are
in registerable form. If a Notice of Acceleration is in effect,
the Corporate Trustee or its nominee may thereafter, after
delivery of notice to the relevant Pledgor, exercise all voting
and corporate rights at any meeting of any corporation or other
entity issuing any of the Pledged Securities and any and all
rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any shares of the Pledged
Securities as if it were the absolute owner thereof, including,
without limitation, the rights to exchange at its discretion any
and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other readjustment of any
corporation or other entity issuing any of such shares or upon
the exercise by any such issuer or the Corporate Trustee or any
right, privilege or option pertaining to any of the Pledged
Securities, and in connection therewith, to deposit and deliver
any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as it may determine, all without
liability except to account for property actually received by it,
but the Trustees shall have no duty to exercise and neither the
Administrative Agent nor any Senior Creditor
shall have any duty to request the exercise of any of the
aforesaid rights, privileges or options, and neither the Trustees
nor the Administrative Agent nor any Senior Creditor shall be
responsible for any failure to do so or delay in so doing.
6. Remedies, Rights Upon Acceleration of Senior
Secured Obligations. (a) If a Notice of Acceleration is in
effect:
(i) The Trustees may at any time, without further
notice to any Pledgor, notify Persons whose obligations to
any Pledgor have been assigned hereunder that such
obligations have been assigned to the Trustees and that
payments thereunder or in respect thereof shall be made
directly to the Corporate Trustee. If requested by the
Trustees, the relevant Pledgor will (at such Pledgor's own
expense) so notify such Persons. The Trustees may in their
own names or in the name of others communicate with such
Persons.
(ii) All payments received by any Pledgor under or in
connection with any of the Pledged Securities shall be held
by such Pledgor in trust for the Trustees, shall be
segregated from other funds of such Pledgor and shall,
forthwith upon receipt by such Pledgor, be turned over to
the Corporate Trustee, in the same form as received by such
Pledgor (duly indorsed to the Trustees, if required) for
deposit in the Collateral Account.
(iii) Any and all such payments so received by the
Trustees (whether from any Pledgor or otherwise) shall be
deposited by the Trustees in the Collateral Account and
shall be held by the Trustees as part of the Trust Estate.
Any Proceeds which are Pledged Securities, when collected,
whether consisting of checks, notes, drafts, bills of
exchange, money orders, or commercial paper of any kind
whatsoever shall be held or deposited in the Collateral
Account and held as part of the Trust Estate subject to
withdrawal and distribution by the Corporate Trustee as
provided in the Trust Agreement.
(b) If a Notice of Acceleration is in effect, the
Trustees may exercise, in addition to all other rights and
remedies granted to them in this Securities Pledge Agreement, all
rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, each Pledgor expressly
agrees that in any such event the Trustees, without demand of
performance or other demand, advertisement or notice of any kind
(except the notice specified below of time and place of public or
private sale) to or upon any Pledgor or any other Person (all and
each of which demands, advertisements and/or notices are hereby
expressly waived), may forthwith collect, receive, appropriate
and realize upon the Pledged Securities, or any part thereof,
and/or may forthwith sell, assign, give option or options to
purchase, or sell or otherwise dispose of and deliver said
Pledged Securities (or contract to do so), or any part thereof,
in one or more parcels at public or private sale or sales, at any
exchange, broker's board or at any of the Corporate Trustee's
offices or elsewhere at such prices as they may deem best, for
cash or on credit or for future delivery without assumption of
any credit risk. The Trustees or any Senior Creditor shall have
the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Pledged Securities so sold,
free of any right or equity of redemption in any Pledgor, which
right or equity is hereby expressly waived and released. The
Trustees shall deposit the net proceeds of any such collection,
recovery, receipt, appropriation, realization or sale in the
Collateral Account pursuant to subsection 3.1 of the Trust
Agreement. To the extent permitted by applicable law, each
Pledgor waives all claims, damages and demands against the
Trustees, the Administrative Agent or any Senior Creditor arising
out of the repossession, retention or sale of the Pledged
Securities. Each Pledgor agrees that the Trustees need not give
any notice of any sale on a recognized public market or give more
than 10 Business Days' notice (which notification shall be deemed
given when mailed, postage prepaid, addressed to such Pledgor at
its address determined pursuant to Section 10 hereof) of the time
and place of any other public sale or of the time after which a
private sale may take place and that such notice is reasonable
notification of such matters.
7. Registration Rights. (a) If the Trustees shall
determine to exercise their right to sell any or all of the
Pledged Securities pursuant to Section 6 hereof, and if in the
opinion of counsel for the Corporate Trustee it is necessary, or
if in the reasonable opinion of the Corporate Trustee under
applicable law it is advisable, to have the Pledged Securities or
that portion thereof to be sold, registered under the provisions
of the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"), each
relevant Pledgor will use its best efforts to cause the issuers
of the Pledged Securities contemplated to be sold, to execute and
deliver, and cause the directors and officers of each thereof to
execute and deliver, all at such Pledgor's expense, all such
instruments and documents, and to do or cause to be done all such
other acts and things as may be necessary or, in the opinion of
the Corporate Trustee, advisable to register the Pledged
Securities or that portion thereof to be sold, under the
provisions of the Securities Act and to cause the registration
statement relating thereto to become effective and to remain
effective for such period as the Corporate Trustee may deem
appropriate to facilitate the sale or other disposition of such
Pledged Securities from the date of the first public offering of
the Pledged Securities or that portion thereof to be sold, and to
make all amendments thereto and/or to the related prospectus
which, in the opinion of the Corporate Trustee, are necessary or
advisable, all in conformity with the requirements of the
Securities Act. Each relevant Pledgor agrees to use its best
efforts to cause each such issuer to comply with the provisions
of the securities or "Blue Sky" laws of any jurisdiction which
the Corporate Trustee shall designate and to cause each such
issuer to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited)
which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) Each Pledgor recognizes that the Trustees may be
unable to effect a public sale of any or all the Pledged
Securities by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws, but may be
compelled to resort to one or more private sales thereof to a
restricted group of purchasers who will be obliged to agree,
among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or
resale thereof. Each Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private
sale shall not for such reason alone be deemed to have been made
in a commercially unreasonable manner. Neither the Trustees nor
the Senior Creditors shall be under any obligation to delay a
sale of any of the Pledged Securities for the period of time
necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act, or
under applicable state securities laws, even if the issuer would
agree to do so.
(c) Each Pledgor further agrees to use its best
efforts to do or cause to be done all such other acts and things
as may be necessary to make such sale or resales of any portion
or all of the Pledged Securities valid and binding and in
compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees or awards of any and all courts,
arbitrators or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or resales, all
at such Pledgor's expense.
(d) If the Trustees determine to exercise their right
to sell all or any of the Pledged Securities, upon written
request, each Pledgor shall from time to time furnish to the
Corporate Trustee all such information as the Corporate Trustee
may request in order to determine the Pledged Securities which
may be sold by such Pledgor as exempt transactions under the
Securities Act.
(e) At the request of the Corporate Trustee, each
Pledgor agrees to indemnify and hold harmless, and each relevant
Pledgor agrees to use its best efforts to cause the issuer or
issuers whose stock or securities are to be sold pursuant to
Section 6 hereof to agree to indemnify and hold harmless, the
Trustees, the Administrative Agent and each Senior Creditor (and
any Person controlling any thereof) from and against any loss,
liability, claim, damage and reasonable expense (and reasonable
counsel fees incurred in connection therewith) under the
Securities Act or otherwise insofar as such loss, liability,
claim, damage or expense arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement, prospectus or offering
memorandum or in any preliminary prospectus or preliminary
offering memorandum or any amendment or supplement to any
thereof, or arises out of or is based upon any omission or
alleged omission to state therein a material fact required to be
stated or necessary to make the statements therein not
misleading, such indemnification to remain operative regardless
of any investigation made by or on behalf of the Trustees, the
Administrative Agent or any Senior Creditor (or any Person
controlling any thereof); provided that such Pledgor and any such
issuer shall not be liable in any case to the extent that any
such loss, liability, claim, damage or expense arises out of or
is based on an untrue statement or alleged untrue statement or an
omission or an alleged omission made by, or in reliance upon and
in conformity with written information furnished by, the
Trustees, the Administrative Agent, any Senior Creditor or any
other Person not under the control of such Pledgor.
8. Possession of Pledged Securities. Subject to the
specific requirements of subsection 3(a) and (c) hereof with
respect to Instruments, Section 9 hereof with respect to Cash
Equivalents and Section 5 of the Trust Agreement, the Corporate
Trustee shall hold in its possession all Pledged Securities
pledged, assigned or transferred hereunder and from time to time
constituting a portion of the Collateral, except for any
documents or instruments which from time to time are certified by
the relevant Pledgor to be required for recordation or for the
purpose of enforcing or realizing upon any right or value thereby
represented or for the purpose of substituting new Pledged
Securities evidencing Pledged Securities then in possession of
the Corporate Trustee or as may be required in the administration
of a Pledgor's business in the ordinary course (subject to such
requirements as the Trustees or any custodian shall reasonably
request) and except as otherwise permitted by the Kmart Credit
Agreement or the Trust Agreement. The Corporate Trustee may,
from time to time, in its sole discretion, appoint one or more
agents or nominees (which in no case shall be a Pledgor or an
affiliate, employee or agent of a Pledgor) to hold physical
custody, for the account of the Corporate Trustee, of any or all
Pledged Securities.
9. Cash Equivalents. (a) On or before the Effective
Date and at any time thereafter, the Corporate Trustee shall
establish, in the Trustees' name, one or more accounts
(individually, a "Securities Account") which may be maintained
with the Corporate Trustee or any agent thereof in accordance
with Section 9(e) hereof. So long as no Notice of Acceleration
is in effect and except as otherwise permitted by the Kmart
Credit Agreement or the Trust Agreement, all Pledged Securities
which are Cash Equivalents shall be held by the Corporate Trustee
or a custodian or other agent of the Corporate Trustee in a
Securities Account subject to release upon request by the
relevant Pledgor strictly in accordance with Section 9(c) hereof.
Upon receipt of a Notice of Acceleration and thereafter so long
as such Notice of Acceleration is in effect, the Corporate
Trustee shall, at the direction of the Administrative Agent,
transfer or cause to be transferred for deposit in the Collateral
Account all Cash Equivalents and all funds in the Securities
Accounts.
(b) Unless a Notice of Acceleration is in effect, the
purchase, sale or presentation for payment of Cash Equivalents in
the Securities Accounts, the receipt by any Pledgor of the
proceeds of the sale or collection thereof and any interest paid
thereon and the release upon request by any Pledgor of funds or
Cash Equivalents on deposit therein shall all occur as provided
below in this Section 9(b) and Section 9(c) hereof. To initiate
the purchase of Cash Equivalents with funds from time to time on
deposit in the Securities Accounts under the control of the
Corporate Trustee or a custodian or other agent of the Corporate
Trustee, the relevant Pledgor will instruct the Corporate Trustee
or such custodian or agent, as the case may be, as to the
particulars of such purchase. The Corporate Trustee or such
custodian or agent will make arrangements (either directly or
through one or more agents) for the purchase of such Cash
Equivalents, including the payment of the purchase price thereof
in accordance with such instructions. Except as otherwise
permitted by the Kmart Credit Agreement, all Cash Equivalents
(other than Permitted Book-Entry Securities) purchased by the
Corporate Trustee or such custodian or agent, as the case may be,
as aforesaid (and all securities (other than Permitted Book-Entry
Securities) subject to, together with all confirmations relating
to, repurchase agreements) will be delivered to (or, in the case
of eurodollar deposits, made in the name of) the Corporate
Trustee or such custodian or agent and, subject to the following
sentence, held in the Securities Accounts. To initiate the sale
or presentation for payment of Cash Equivalents, the relevant
Pledgor will instruct the Corporate Trustee or such custodian or
agent as to the particulars of such sale or presentation,
whereupon the Corporate Trustee or such custodian or agent will
make arrangements (either directly or through the appropriate
agents) for the sale or presentation of such Cash Equivalents in
accordance with such instructions. Funds received by the
Corporate Trustee or such custodian or agent on the sale or
collection of Cash Equivalents (including interest payable in
respect thereof) which are not released pursuant to a request by
a Pledgor in accordance with Section 9(c) hereof shall be
reinvested by the Corporate Trustee or such custodian or agent in
Cash Equivalents in accordance with the instructions of the
relevant Pledgor. While a Notice of Acceleration is in effect,
no Pledgor shall have the right to give instructions to the
Corporate Trustee or such custodian or agent pursuant to this
Section 9(b). Instructions to the Corporate Trustee or such
custodian or agent pursuant to this Section 9(b) may be given in
writing, by facsimile, by computer transmission or orally
(confirmed in writing).
(c) So long as no Notice of Acceleration is in effect,
each Pledgor may obtain the release to it or its order of funds
in any Securities Account on the following terms and conditions:
(i) Each request by such Pledgor for a release of such
funds shall be made to the Corporate Trustee or applicable
custodian or agent and the Corporate Trustee or such
custodian or agent shall immediately cause such funds to be
delivered to the Pledgor.
(ii) Such Pledgor covenants and agrees that it will not
use any funds as to which it requests release for any
purpose prohibited under the terms of the Kmart Credit
Agreement.
(iii) The Trustees shall have no duty to monitor or
investigate the use of proceeds released to such Pledgor
pursuant to this Section 9(c).
(d) Any written or oral request or instructions by any
Pledgor pursuant to clause (i) of this Section 9(c) or pursuant
to Section 9(b) hereof shall be full authority for and direction
to the Corporate Trustee or applicable custodian or agent of the
Corporate Trustee to make the requested release or investment, as
the case may be, and the Corporate Trustee or applicable
custodian or agent of the Corporate Trustee shall promptly do so.
The Trustees and their custodians and agents in so doing shall
have no liability to any Person.
(e) The Corporate Trustee shall from time to time
appoint, as its agent or agents, one or more Persons (which in no
case shall be a Pledgor or an affiliate, employee or agent of a
Pledgor) designated by a Pledgor and reasonably acceptable to the
Corporate Trustee, located in New York (or such other
jurisdictions within the United States as may be designated by a
Pledgor) with whom a Securities Account shall be established and
maintained. Prior to establishing such a Securities Account, the
Person so appointed shall deliver to the Corporate Trustee a
writing acknowledging that (i) in opening such Securities
Accounts and holding Cash Equivalents therein, such Person is
acting as agent of the Corporate Trustee and will conduct
transactions in Cash Equivalents in such account in the name of
the Corporate Trustee (with any confirmations of such
transactions sent by such Person to reflect that fact), and (ii)
such Person shall in no event deliver any Cash Equivalents held
in such Securities Account to any Pledgor or any affiliate,
employee or agent of any Pledgor. The provisions of clause (ii)
of this Section 9(e) shall also apply to any Securities Account
maintained with the Corporate Trustee.
(f) Upon the sale or disposition of any Cash
Equivalents pursuant to this Section 9, the Trustees' security
interest therein (but not in the Proceeds arising from such sale
or disposition) shall, without any further action on the part of
the Trustees, be released.
10. Notices. All notices or other communications
hereunder shall be given in the manner and to the addresses
determined under subsection 7.1 of the Trust Agreement. Where
customary and appropriate, communications hereunder relating to
the Securities Account may be made by computer transmission.
11. Severability. Any provision of this Securities
Pledge Agreement which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
12. No Waiver; Cumulative Remedies. Neither the
Trustees nor the Senior Creditors shall by any act, delay,
omission or otherwise be deemed to have waived any of its or
their rights or remedies hereunder and no waiver shall be valid
unless in writing, signed by the Trustees, and then only to the
extent therein set forth. A waiver by the Trustees of any right
or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Trustees or the Senior
Creditors would otherwise have had on any future occasion. No
failure to exercise nor any delay in exercising on the part of
the Trustees, any right, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies hereunder
provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights and remedies
provided by law.
13. Waivers; Amendments; Conflicts. None of the terms
and provisions of this Securities Pledge Agreement may be waived,
altered, modified or amended except by an instrument in writing
executed by the parties hereto in accordance with subsection 7.3
of the Trust Agreement. In case of any conflict between the
terms of this Securities Pledge Agreement and the Trust
Agreement, the terms of the Trust Agreement shall control.
14. Limitation by Law; Limitation by Contract. (a)
All rights, remedies and powers provided by this Securities
Pledge Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of
law, and all the provisions of this Securities Pledge Agreement
are intended to be subject to all applicable mandatory provisions
of law which may be controlling and (subject to Section 11
hereof) to be limited to the extent necessary so that they will
not render this Securities Pledge Agreement invalid,
unenforceable in whole or in part or not entitled to be recorded,
registered, or filed under the provisions of any applicable law.
In addition, and without limiting the generality of the
foregoing, (x) if any applicable law restricts the pledging or
granting of a security interest in any property or asset of a
Pledgor unless one or more consents have been obtained or one or
more conditions have been satisfied, then such property or asset
shall not be subject to a security interest hereunder and shall
not constitute Pledged Securities unless such consents have been
obtained and such conditions have been satisfied, and (y) if any
applicable law restricts the sale, assignment or other transfer
of any interest of a Pledgor in any Pledged Securities unless one
or more consents have been obtained or one or more conditions
have been satisfied, then no such sale, assignment or other
transfer of such interest shall be made hereunder or in
connection herewith unless such consents have been obtained and
such conditions have been satisfied.
(b) The security interest granted hereunder shall not
extend to any property or asset of any Pledgor to the extent, and
only for so long as, such property is subject to another lien or
security interest which restricts the granting of additional
liens or security interests on such property and such property
shall not constitute Pledged Securities; provided that (i) such
lien or security interest is permitted pursuant to subsection
8.4(f), (g), (i), (j) or (l) of the Kmart Credit Agreement and
(ii) the restriction on the granting of additional liens or
security interests extends only to the property subject to such
lien or security interest and the proceeds thereof.
(c) If any contract expressly prohibits the granting
of a security interest in such contract without consent, then
unless such consent has been obtained, such contract shall not be
subject to a security interest hereunder and shall not constitute
Pledged Securities.
15. Successors and Assigns. This Securities Pledge
Agreement shall be binding upon and inure to the benefit of the
parties hereto and shall inure to the benefit of the Senior
Creditors and their respective successors and assigns and nothing
herein or in the Trust Agreement or any other Security Document
is intended or shall be construed to give any other Person any
right, remedy or claim under, to or in respect of this Securities
Pledge Agreement, the Trust Agreement, any other Security
Document or any Collateral.
16. Termination of Securities Pledge Agreement. This
Securities Pledge Agreement, and all of the obligations of each
Pledgor hereunder, shall terminate simultaneously with the
reversion of the Trust Estate to the Obligors in accordance with
subsection 7.10(a) of the Trust Agreement.
17. Right to Sell. It is agreed that, to the extent
permitted by subsections 5.1 and 7.10 of the Trust Agreement with
respect to Pledged Securities generally or Section 9 hereof with
regard to Cash Equivalents, each Pledgor shall have the right to
sell or otherwise dispose of, free and clear of the security
interest created hereby, any of the Pledged Securities.
18. Applicable Law. This Securities Pledge Agreement
shall be governed by, and be construed and interpreted in
accordance with, the law of the State of New York, except as
required by mandatory provisions of law.
19. VTA. VTA, Inc., a Delaware corporation, shall be
party to this Securities Pledge Agreement solely for the purpose
of pledging the items referred to in subsection 7.10(d) of the
Kmart Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Securities Pledge Agreement to be executed and delivered (by
their duly authorized officers in the case of corporate parties)
as of the date first set forth above.
KMART CORPORATION
By: ____________________________
Name:
Title:
BUILDERS SQUARE, INC.
By: ____________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President and
Chief Financial Officer
KMART APPAREL SERVICE OF ATLANTA CORP.
By: ____________________________
Name:
Title:
KMART APPAREL SERVICE OF DES PLAINES CORP.
By: ____________________________
Name:
Title:
K-MART APPAREL OF PUERTO RICO CORP.
By: ____________________________
Name:
Title:
KMART HOLDINGS, INC.
By: ____________________________
Name:
Title:
KMART PROPERTIES, INC.
By: ____________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
PMB, INC.
By: ____________________________
Name:
Title:
SOURCING AND TECHNICAL SERVICES, INC.
By: ____________________________
Name:
Title:
KMART OVERSEAS CORPORATION
By: ____________________________
Name:
Title:
JAF, INC.
By: ____________________________
Name:
Title:
VTA, INC.
By: ____________________________
Name:
Title:
FIRST TRUST OF NEW YORK, NATIONAL
ASSOCIATION, as Corporate Trustee
By: ___________________________
Name:
Title:
___________________________________
XXXX X. XXXXXXX, as Individual
Trustee
Schedule A To
Securities Pledge Agreement
Pledged Shares
