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EXHIBIT 99.2
EXECUTION COPY
WAREHOUSE FACILITY CREDIT AGREEMENT
DATED AS OF OCTOBER 7, 1994
among
KMART CORPORATION AND THE OTHER BORROWERS HEREUNDER,
BANKERS TRUST COMPANY,
As Documentation Agent,
and
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
$500,000,000
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 1.3 Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE II
LOAN PROVISIONS . . . . . . . . . . . . . . . . . . . . . 24
Section 2.1 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.2 Obligations; Notes; Loan Register; Waiver;
Application of Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.3 Allocation of Total Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.4 Terms of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.5 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 2.6 Conversion and Continuation Elections for
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.7 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.8 Computation of Fees and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.9 Mandatory Reduction of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 2.10 Voluntary Reduction of the Total Commitment . . . . . . . . . . . . . . . . . . . . . . 40
Section 2.11 Voluntary Prepayments of the Loan Obligations . . . . . . . . . . . . . . . . . . . . . 40
Section 2.12 Mandatory Prepayment of the Loan Obligations . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.13 Other Provisions With Respect to Prepayments . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.14 Order of Prepayments and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 2.15 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 2.16 Responsibility for Making Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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Section 2.17 Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 2.18 Payments by the Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 2.19 Payments by the Banks to the Documentation
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY . . . . . . . . . 46
Section 3.1 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 3.2 Inability to Determine Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 3.3 Increased Costs; Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 3.4 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 3.5 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 3.6 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE IV
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 52
Section 4.1 Representations and Warranties of the
Non-Kmart Borrowers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE V
COVENANTS . . . . . . . . . . . . . . . . . . . 58
Section 5.1 Affirmative Covenants of each Non-Kmart
Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 5.2 Negative Covenants of each Non-Kmart Borrower . . . . . . . . . . . . . . . . . . . 61
Section 5.3 Affirmative Covenants of the Kmart Borrower . . . . . . . . . . . . . . . . . . . . 61
Section 5.4 Negative Covenants of the Kmart Borrower . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE VI
CONDITIONS OF CREDIT . . . . . . . . . . . . . . . . . . . . . 66
Section 6.1 Conditions Precedent to Occurrence of the
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Closing Date and Effectiveness of Agreement . . . . . . . . . . . . . . . . . . . . . . 66
Section 6.2 Conditions Precedent to Effectiveness of
Agreement as to any Non-Kmart Borrower . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 6.3 Conditions Precedent to any Project Borrowing . . . . . . . . . . . . . . . . . . . . . 70
Section 6.4 Conditions Precedent to All Borrowings (other
than a Roll-over Borrowing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 6.5 Conditions Precedent to All Roll-Over
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE VII
EVENTS OF DEFAULT . . . . . . . . . . . . . . . 71
Section 7.1 Guarantor Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 7.2 Borrower Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE VIII
THE DOCUMENTATION AGENT. . . . . . . . . . . . . 77
Section 8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 8.2 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.3 Rights, Exculpation, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 8.4 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.6 The Documentation Agent Individually . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 8.7 Resignation by the Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE IX
MISCELLANEOUS . . . . . . . . . . . . . . . . . 81
Section 9.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 9.2 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
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Section 9.4 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 9.5 Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 9.6 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 9.7 Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.9 Assignments, Participations, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 9.10 Confirmations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.11 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.14 No Third Parties Benefited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.15 Governing Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 9.16 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.17 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.18 Borrower Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.19 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.20 Termination of Existing Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Exhibits
Exhibit A - Form of Additional Borrower Agreement
Exhibit B - Form of Assignment
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Note
Exhibit F - Form of Allocation Request
Exhibit G - Form of Notice of Swingline Borrowing
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Schedules
Schedule 1.1(a) - Existing Facilities
Schedule 1.1(b) - Commitments; Lending Offices
Schedule 4.2(c) - Consents and Approvals
Schedule 5.4(c) - Liens
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WAREHOUSE FACILITY CREDIT AGREEMENT
This WAREHOUSE FACILITY CREDIT AGREEMENT, dated as of October 7, 1994,
among the Borrowers (as hereinafter defined), the undersigned financial
institutions, including Bankers Trust Company, in their capacities as lenders
hereunder (collectively, the "Banks," and each individually, a "Bank") and
Bankers Trust Company, as Documentation Agent.
W I T N E S S E T H
WHEREAS, the Borrowers have requested the Banks to make loans to one or
more of the Borrowers in an aggregate principal amount not to exceed Five
Hundred Million Dollars ($500,000,000) to be used to refinance construction
loans used to acquire real estate and construct buildings and other improvements
thereto, and, in addition, the Kmart Borrower (as hereinafter defined) has
requested the Banks to make loans for other corporate purposes; and
WHEREAS, the Banks are willing to extend commitments to make loans to
the Borrowers for the purposes specified above and on the terms and subject to
the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein and in the Guaranty (as hereinafter defined), the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.1 Definitions. As used herein, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Additional Borrower Agreement" means an Additional Borrower Agreement
in the form of Exhibit A hereto.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. In no
event shall any Bank be deemed an "Affiliate" of any Borrower.
"Agent-Related Persons" means BT and any successor agent under Section
8.7, together with their respective Affiliates and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
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"Agreement" means this Warehouse Facility Credit Agreement, as amended,
restated, supplemented or modified from time to time.
"Allocation Request" has the meaning assigned to that term in Section
2.3.
"APUC" means a written agreement to purchase a Project upon
completion between an Eligible Borrower and Kmart Corporation.
"Arrangers" means BT and BA Securities, Inc.
"Assignee" has the meaning specified in Section 9.9(a).
"Assignment" means a written assignment agreement in favor of the
Documentation Agent for the benefit of the Banks, and in substantially the form
of Exhibit B hereto duly completed, of a Borrower's interest in (a) the APUC
which relates to a Project, and (b) all rents and profits with respect to
such Project.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the reasonable
allocated cost of internal legal services and all reasonable disbursements of
internal counsel.
"Average One-Month LIBOR" means the rate of interest per annum
determined by the Documentation Agent to be equal to the sum of the one month
LIBOR in effect on each day of the calendar month then ended divided by the
number of days of such calendar month.
"Bank" and "Banks" means any or all, as the case may be, of the banks
listed in Schedule 1.1(b) hereof and any entity which becomes a Bank pursuant
to Section 9.9.
"Bank Affiliate" means a Person engaged primarily in the business of
commercial banking that is an Affiliate of a Bank and (i) is organized under
the laws of the United States, or any state thereof, or (ii) is organized under
the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, and is acting through a branch or agency located in the United States.
"Board" means the Board of Governors of the Federal Reserve System.
"Borrower" means the Kmart Borrower and any Eligible Borrower as to
which an Additional Borrower Agreement shall, after the date of this Agreement,
have been delivered to the Documentation Agent, duly executed by such Eligible
Borrower, the Guarantor and the Documentation Agent on behalf of the Banks and
shall have become effective in accordance with its terms, until such time, if
any, as such Borrower shall have satisfied the conditions set forth in Section
9.18, and "Borrowers" means all of the foregoing.
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"Borrower Event of Default" has the meaning assigned to that
term in Section 7.2.
"Borrower Termination Agreement" means an agreement by and between the
Documentation Agent and a Borrower on terms satisfactory to the Documentation
Agent to be executed and delivered following the payment in full of all
Obligations of such Borrower.
"Borrowing" means a borrowing hereunder, consisting of Loans of the
same Type made to a Borrower on the same day by the Banks pursuant to Article
I.
"Borrowing Date" means a date on which a Borrowing is made hereunder.
"Bridge Agreements" has the meaning assigned to that term in Section
2.2(e).
"Bridge Borrowers" has the meaning assigned to that term in Section
2.2(e).
"Bridge Notes" has the meaning assigned to that term in Section 2.2(e).
"BT" means Bankers Trust Company, a New York banking corporation.
"Business Day" means a day on which the Documentation Agent is open in
New York, New York at its address specified in or for the purposes of this
Agreement for the purpose of conducting commercial banking business, and, if the
applicable Business Day relates to any LIBOR Loan, means such a day on which
dealings in Dollars are carried on in the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any Bank.
"CD Rate" means the arithmetic average (rounded upward to the nearest
1/100th of 1%) of the consensus bid rates determined by each Reference Bank as
the sum of (x) the bid rates per annum, at 10:00 a.m. (New York City time) on
the first day of the Interest Period to be applicable, of two or more New York
or Chicago, as the case may be, certificate of deposit dealers of recognized
standing selected by such Reference Bank in New York or Chicago, as the case
may be, for certificates of deposit of such Reference Bank in an amount
approximately comparable to the principal amount of the CD Rate Loan for such
Reference Bank and with a maturity equal to the Interest Period applicable to
such CD Rate Loan, provided that if any Reference Bank fails to provide the
Documentation Agent with
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its aforesaid rate then the CD Rate shall equal the arithmetic average of the
rates provided to the Documentation Agent by the other Reference Bank or Banks,
such average rate to be grossed up in accordance herewith for the maximum cost
of reserves applicable to certificates of deposit under Regulation D of the
Federal Reserve Board by dividing the same by a percentage equal to 100% minus
the maximum rate of all reserve requirements (expressed as a percentage) as
specified in Regulation D (including any marginal, emergency, supplemental,
special or other reserves) that for the date the CD Rate is being determined
would be applicable during the Interest Period to a negotiable certificate of
deposit of such Reference Bank in excess of $100,000 and with maturity period
equal to such Interest period, plus (y) the then daily net annual assessment
payable to the Federal Deposit Insurance Corporation for insuring such
Certificate of Deposit by a member of the Bank Insurance Fund that is
classified as adequately capitalized and within supervisory sub-group "A" (or a
comparable successor assessment risk classification within the meaning of 12
C.F.R. Section 327.3(d)).
"CD Rate Loan" means any Loan that bears interest at a rate
determined with reference to the CD Rate.
"Closing Date" means the date on which all conditions precedent set
forth in Sections 6.1 are satisfied or waived by all Banks.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.
"Commitment" means, with respect to any Bank, such Bank's aggregate
commitment to make Loans to the Borrowers hereunder in the principal amount set
forth opposite such Bank's name in Schedule 1.1(b) (or any supplement thereto)
under the caption "Amount of Commitment".
"Consolidated Net Worth" means as of the date of any determination
thereof, the consolidated net worth of Kmart Corporation, determined in
accordance with GAAP; provided, however, that any gains or losses from the
disposition of any Specialty Retail Subsidiary and any changes after the
Closing Date in the foreign currency translation adjustment account as
presented in Kmart Corporation's financial statements (and in accordance with
GAAP) shall be excluded from the determination of Consolidated Net Worth.
"Contaminant" means any waste, pollutant (as that term is defined in
42 U.S.C. 9601(33) or in 33 U.S.C. 1362(13)), hazardous substance (as that term
is defined in 42 U.S.C. 9601(14)), hazardous chemical (as that term is defined
by 29 CFR Section 1910.1200(c)), toxic substance, hazardous waste (as that term
is defined in 42 U.S.C. 6901), radioactive material, special waste,
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petroleum, including crude oil or any petroleum-derived substance, waste, or
breakdown or decomposition product thereof, or any constituent of any such
substance or waste, including but not limited to polychlorinated biphenyls and
asbestos.
"Continuation Date" has the meaning set forth in Section 2.6.
"Contract Documents" has the meaning specified in Section 9.6.
"Controlled Group" means the Kmart Borrower and all Persons (whether
or not incorporated) under common control or treated as a single employer with
the Kmart Borrower pursuant to Sections 414(b), (c), (m) or (o) of the Code.
"Conversion Date" means any date on which Kmart Corporation, (which the
Borrowers hereby jointly and severally irrevocably designate as their collective
agent for such purpose) acting as agent for the Borrowers hereunder, elects to
convert one Type of Loan to another Type of Loan.
"Credit Exposure" has the meaning assigned to that term in
Section 9.9 (c).
"Debt Rating" means the rating assigned to the Guarantor's senior
unsecured debt as publicly announced by Xxxxx'x or S&P, as the case may be.
"Default Rate" has the meaning assigned to such term in
Section 2.7(f).
"Deposited Monies" has the meaning assigned to that term in Section
2.13.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Documentation Agent" means BT in its capacity as documentation agent
for the Banks hereunder, and any successor agent in such capacity.
"EBITDAR" means, for any applicable period, for Kmart Corporation the
aggregate of the following, without duplication: (a) consolidated net income
for such period, plus (b) consolidated interest expense (net of any interest
income) for such period, plus (c) consolidated provision for taxes for such
period, plus (d) consolidated depreciation expense for such period, plus (e)
consolidated amortization expense for such period, plus (f) consolidated
Rent Expenses for such period, minus (or plus, as applicable) (g) on a
consolidated basis any extraordinary gains (or plus extraordinary losses) for
such period, minus (or plus, as applicable) (h) any gains (or plus any losses)
attributable to the Specialty Retail Subsidiaries for such period other than
results of
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operations in the ordinary course of business, plus (i) solely with respect to
the four fiscal quarter period ending in October, 1994, the $1.348 billion
restructuring charge recorded in the fourth fiscal quarter of Kmart
Corporation's fiscal year ending January 26, 1994.
"Eligible Assignee" means (i) a commercial bank or other financial
institution organized under the laws of the United States, or any state
thereof, and having a combined capital and surplus of at least One Hundred
Million Dollars ($100,000,000); (ii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country,
and having a combined capital and surplus of at least One Hundred Million
Dollars ($100,000,000), provided that such bank is acting through a branch or
agency located in the United States; and (iii) any Bank Affiliate.
"Eligible Borrower" means any of (a) Kmart Corporation, and (b) any
other Person which (i) has been designated as an Eligible Borrower in a
writing executed by the Guarantor and delivered to the Documentation Agent,
(ii) has executed an APUC with the Guarantor with respect to a Project in form
and substance reasonably satisfactory to the Documentation Agent, and (iii) owns
the real estate and improvements thereon comprising the Project which is
subject to such APUC.
"Environmental Lien" means a Lien in favor of any governmental
authority for (a) any liability under federal or state environmental laws or
regulations, or (b) damages arising from, or costs incurred by such
governmental authority in response to, a Release or threatened Release of a
Contaminant into the environment.
"ERISA" means the Employee Retirement income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"Existing Facilities" means the bilateral lines of credit with the
institutions and in the amounts set forth on Schedule 1.1(a).
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the preceding Business Day) in the
weekly statistical release designated as H.15 (519), or any successor
publication, by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average of the quotations
for such day on such transactions received by the Documentation Agent from
three (3)
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Federal funds brokers of recognized standing selected by the Documentation
Agent.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be in general use by significant segments of the U.S.
accounting profession, which are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
"Guarantor" means Kmart Corporation, a Michigan corporation.
"Guarantor Event of Default" has the meaning assigned to that term in
Section 7.1.
"Guaranty" means that certain Guaranty Agreement dated the date hereof
made by Guarantor in favor of Documentation Agent and the Banks.
"Guaranty Obligation" means, as applied to any Person, any obligation,
direct or indirect, of that Person guaranteeing any Indebtedness of any other
Person, and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person:
(i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness (whether arising by
agreement to keep-well, to purchase assets, goods, securities or
services, to take-or-pay, or to maintain financial statement
conditions or otherwise); or
(ii) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part);
provided, that the term Guaranty Obligation shall not include:
(a) endorsements for collection or deposit in the ordinary
course of business;
(b) obligations that are not required in accordance with
GAAP to be included in the financial statements of such Person or the
footnotes thereto; or
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(c) "unconditional purchase obligations" (including
take-or-pay contracts) as defined in and as required to be disclosed
pursuant to Statement of Financial Accounting Standards No. 47 and the
related interpretations, as the same may be amended from time to time.
"Indebtedness" of any Person means at any date without duplication,
(a) all obligations of such Person for borrowed money;
(b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
(c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable
and other expenses and accounts payable arising in the ordinary course
of business;
(d) all reimbursement obligations with respect to letters of
credit (other than "Letters of Credit" and "LC Obligations" under the
credit agreement described in clause (c) of the definition of Other
Credit Facilities) and bankers I acceptances except ordinary trade
credits;
(e) all Indebtedness of others secured by a Lien on any asset
of such Person whether or not such Indebtedness is assumed by such
Person;
(f) all obligations (to the extent capitalized for accounting
purposes) of such Person as lessee under any lease of any property by
that Person as lessee which, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of that Person; and
(g) all Guaranty Obligations of such Person.
"Indemnified Person" has the meaning specified in Section 9.6.
"Initial Borrowing" means the first Borrowing by any Borrower under this
Agreement.
"Initial Borrowing Date" means the date of the Initial Borrowing.
"Initial Loan" means the first Loan made by the Banks under this
Agreement.
"Initial Note" has the meaning assigned to that term in Section 2.2(b).
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"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in each case (a) and (b) undertaken under U.S. Federal, State or
foreign law.
"Interest Payment Date" means, with respect to any LIBOR Loan or CD
Rate Loan, the last day of each Interest Period applicable to such Loan, with
respect to any Reference Rate Loan, the last Business Day of each calendar
quarter and the Termination Date, and with respect to any Swingline Loan, the
last day of each calendar month and the Termination Date; provided, that if any
Interest Period for a LIBOR Loan exceeds three months, the date which falls
three months after the beginning of such Interest Period shall also be an
Interest Payment Date.
"Interest Period" means: (a) with respect to any LIBOR Loan, the
period commencing on the Business Day the LIBOR Loan is disbursed or continued
(or on the Conversion Date on which any Loan is converted to a LIBOR Loan) and
ending on the date one, two, three or six months thereafter, as selected by the
Kmart Borrower with respect to any Notice of Borrowing or Notice of
Conversion/Continuation; and (b) with respect to any CD Rate Loan, the period
commencing on the Business Day the CD Rate Loan is disbursed or continued (or
on the Conversion Date on which any Loan is converted to a CD Rate Loan) and
ending 30, 60 or 90 days thereafter, as selected by the Kmart Borrower with
respect to any Notice of Borrowing or Notice of Conversion/Continuation;
provided, that:
(i) if any Interest Period would otherwise end on a day
which is not a Business Day, that Interest Period shall be extended to
the next succeeding Business Day unless, in the case of a LIBOR Loan,
the result of such extension would be to carry such Interest Period
into another calendar month, in which event such Interest Period shall
end on the immediately preceding Business Day;
(ii) any Interest Period pertaining to a LIBOR Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month which is one, two, three or six months, as the
case may be, after the calendar month in which such Interest Period
began; and
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(iii) no Interest Period for any Loan shall extend beyond the
Termination Date.
"Interim Maturity Date" means the last day of any Interest Period.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Investment" means, with respect to any Person (such Person being
referred to in this definition as the "Investor"):
(a) any amount paid by the Investor, directly or indirectly,
or any transfer of property, directly or indirectly, by the Investor to
any other Person for capital stock of, or as a capital contribution
to, or any amount which the Investor has advanced, directly or
indirectly to, any other Person;
(b) the equity interest of the Investor in any Person;
(c) any indebtedness of any Person which is owed to the
Investor and which has been acquired for value by the Investor; and
(d) any Guaranty Obligation in respect of any Indebtedness
of any other Person.
"Kmart Borrower" shall mean Kmart Corporation in its capacity as a
Borrower under this Agreement, as distinct from its capacity as Guarantor of
the obligations of Non-Kmart Borrowers under this Agreement and the Notes.
"Lending Office" means, with respect to each Bank, the office of that
Bank designated as such in Schedule 1.1(b) hereto or such other office of the
Bank as it may from time to time specify to the Kmart Borrower and the
Documentation Agent in accordance with this Agreement.
"Level I Status" exists at any date if, at such date (i) the Debt
Rating is either A2 (or the equivalent) or higher by Moody's or A (or the
equivalent) or higher by S&P and (ii) the Debt Rating is not lower than Baa3 (or
the equivalent) by Moody's or BBB- (or the equivalent) by S&P.
"Level II Status" exists at any date if, at such date (i) the Debt
Rating is either Baa1 (or the equivalent) or higher by Moody's or BBB+ (or the
equivalent) or higher by S&P, (ii) the Debt Rating is not lower than Baa3 (or
the equivalent) by Moody's or BBB- (or the equivalent) by S&P and (iii) Level I
Status does not exist.
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"Level III Status" exists at any date if, at such date (i) the Debt
Rating is either Baa3 (or the equivalent) or higher by Moody's or BBB- (or the
equivalent) or higher by S&P, (ii) the Debt Rating is not lower than Baa3 (or
the equivalent) by Moody's or BBB- (or the equivalent) by S&P and (iii) Level I
Status and Level II Status do not exist.
"Level IV Status" exists at any date if, at such date (i) the Debt
Rating is lower than Baa3 (or the equivalent) by Moody's or lower than BBB- (or
the equivalent) by S&P, or (ii) the Kmart Borrower's senior unsecured
indebtedness is unrated by either S&P or Moody's.
"LIBOR" means, with respect to any Interest Period, the rate of
interest per annum determined by the Documentation Agent to be equal to:
(a) the rate of interest per annum for deposits in U.S.
Dollars for a period equal to the relevant interest period quoted on
Telerate, page 3750 (or its successor if such page number changes) at
or about 11:00 a.m. (London time) on the second business day before
the commencement of such Interest Period,
divided (and rounded to the nearest 1/16 of 1%) by
(b) a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve
System in respect of eurocurrency funding or liabilities as defined in
Regulation D of the Federal Reserve Board.
If no quotation is available on Telerate, the rate of interest under clause (a)
above for any Interest Period shall be determined by the Documentation Agent to
be the arithmetic mean (rounded upward to the nearest 1/16 of 1%) of the rates
of interest per annum notified to the Documentation Agent by each Reference
Bank as the rate of interest (rounded upward to the nearest 1/16th of 1%) at
which deposits in an amount approximately equal to the aggregate amount of the
LIBOR Loans requested to be borrowed, and having a maturity equal to such
Interest Period, are offered to major banks in the London interbank market at
or about 11:00 a.m. (London time) on the second Business Day before the
commencement of such Interest Period.
"LIBOR Loan" means any Loan, other than a Swingline Loan, that bears
interest at a rate determined with reference to LIBOR.
"Lien" means any mortgage, deed of trust, pledge, charge, encumbrance,
lien (statutory or other) or security interest of any
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nature whatsoever (including those created by, arising under or evidenced by
any conditional sale or other title retention agreement), and any assignment or
deposit arrangement intended as or having the effect of security.
"Loan" means a Loan under Section 2.1, and may be a LIBOR Loan, a CD
Rate Loan, a Swingline Loan or a Reference Rate Loan, and, with respect to any
Borrower, means the loans by each of the Banks to such Borrower under Section
2.1 and, with respect to any Bank, the loans made by such Bank to a Borrower or
all the Borrowers, as the context may require, and "Loans" means all of such
Loans to all Borrowers collectively.
"Loan Documents" means, collectively, this Agreement, each Note, the
Guaranty, any Additional Borrower Agreement, any Assignment and all other
agreements, instruments and documents executed and delivered by or on behalf of
any Borrower or the Guarantor in connection with this Agreement.
"Loan Obligations" means, with respect to each Borrower, the
obligations of such Borrower to repay principal of, and to pay interest on the
Loans made to such Borrower pursuant to Section 2.1.
"Loss" has the meaning specified in Section 3.5.
"Material Adverse Effect" means a material adverse change in, or a
material adverse effect upon, the assets, liabilities, business, operations or
condition of the Guarantor and its Subsidiaries taken as a whole.
"Moody's" means Xxxxx'x Investors Services, Inc., or any successor to
the rating agency business thereof.
"Net Proceeds" means, with respect to any Project Sale by any
Non-Kmart Borrower, at any date of determination, cash proceeds (including any
cash received by way of deferred payment pursuant to a note receivable or
otherwise, but only as and when so received) through that date from such
Project Sale by a Non-Kmart Borrower or any of its Subsidiaries, net of the
expenses of such Project Sale and net of income taxes payable in respect of
such Project Sale.
"Non-Kmart Borrower" means any Borrower which is not Kmart Corporation.
"Non-Project Loan" means a Loan made to the Kmart Borrower for
purposes other than with respect to a Project.
"Non-Project Commitment" means, with respect to a Borrowing by the
Kmart Borrower which is not made with respect to a Project, for all Banks, the
portion of the Total Commitment allocated to said Borrowing pursuant to Section
2.3 hereof; and for each Bank with
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respect to any such requested Borrowing by the Kmart Borrower, such Bank's Pro
Rata Share of the portion of the Total Commitment allocated to such Borrowing,
in each case, as such amount may be reduced or increased from time to time
pursuant to the terms hereof.
"Note" means any Initial Note and any note issued in replacement of,
exchange for, or amendment or restatement of, any thereof, and "Notes" means
all such notes, collectively.
"Notice of Borrowing" means a notice given by a Borrower to the
Documentation Agent pursuant to Section 2.5 in substantially the form of Exhibit
C.
"Notice of Conversion/Continuation" means a notice given by the Kmart
Borrower, as agent for all Borrowers hereunder, to the Documentation Agent
pursuant to Section 2.6 in substantially the form of Exhibit D.
"Obligations" means, with respect to any Borrower at any time, the
aggregate of such Borrower's Loan Obligations at such time and all other
obligations and liabilities of such Borrower under the Loan Documents at such
time.
"Organizational Documents" means, with respect to any Borrower, the
partnership or joint venture agreement or, if applicable, the certificate of
incorporation and bylaws of such Borrower.
"Other Credit Facilities" means, collectively: (a) the revolving
credit facility evidenced by that certain 364 Day Credit Agreement dated as of
the date hereof among the Kmart Borrower, Bank of America National Trust and
Savings Association ("BofA") as documentation agent and the financial
institutions signatory thereto, as amended, restated, supplemented or modified
from time to time; (b) the revolving credit facility evidenced by that certain
Seasonal Credit Agreement dated as of the date hereof among the Kmart Borrower,
BofA as documentation agent and the financial institutions signatory thereto,
as amended, restated, supplemented or modified from time to time; and (c) the
revolving credit and letter of credit facilities evidenced by that certain
Three Year Credit Agreement dated as of the date hereof among the Kmart
Borrower, BofA, as documentation agent thereunder, and the financial
institutions signatory thereto, as amended, restated, supplemented or modified
from time to time.
"Other Taxes" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Document.
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"Participants" has the meaning assigned to that term in Section 9.9(c).
"Partner" means, with respect to any Borrower organized as a
partnership or joint venture, any general partner or joint venturer of such
Borrower.
"Payment Office" means the address for payments set forth on the
signature page hereto in relation to the Documentation Agent, or such other
address as the Documentation Agent may from time to time specify in accordance
with Section 2.5(c).
"Payoff Letter" means, with respect to any Project, a letter addressed
to and otherwise in form and substance satisfactory to the Documentation Agent
from each Person which is an existing lender with respect to such Project,
stating the amount of principal and interest owed to such lender as of the date
of such letter and a per diem interest amount which will accrue thereafter
through the proposed Project Borrowing Date for funding of the Project Loan the
proceeds of which are to be used to repay principal and interest of such
existing indebtedness, and affirming that such existing lender will release all
liens and security interests securing such indebtedness upon repayment thereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
Permitted Investments" means (a) any evidence of indebtedness,
maturing not more than one year after the date of issue, issued by the United
States of America or any instrumentality or agency thereof the principal,
interest and premium, if any, of which is guaranteed fully by, or backed with
the full faith and credit of, the United States of America, (b) any certificate
of deposit, maturing not more than 90 days after the date of purchase, issued
by the Documentation Agent, or by another commercial banking institution which
is a member of the Federal Reserve System, has a combined capital and surplus
and undivided profits of not less than $200,000,000 and at the time has a
credit rating of AA or better from Standard & Poor's Ratings Group or Aa or
better from Xxxxx'x Investors Service, Inc., (c) commercial paper, maturing not
more than 90 days after the date of purchase, issued by a corporation (other
than Guarantor, any Borrower or any Subsidiary of any Borrower or any of their
respective Affiliates) organized and existing under the laws of any state
within the United States of America with a rating, at the time as of which any
determination thereof is to be made, of "P-1" (or higher) according to Xxxxx'x
Investors Service, Inc. or "A-1" (or higher) according to Standard & Poor's
Ratings Group, (d) shares or other evidences of participation in any mutual
fund which invests exclusively in one or more of the foregoing, and (e) demand
deposits with any bank or trust company, not exceeding, with respect to any
Non-Kmart Borrower (unless waived by the Guarantor) $100,000.
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"Permitted Liens" means:
(a) Liens for taxes not yet due and payable or
which are being contested in good faith by appropriate
proceedings diligently pursued, provided that (i) if any
proceedings shall have been commenced for the enforcement of
such Liens, no adverse judgment or order of foreclosure or
other similar order, writ or relief shall have been granted or
issued, the effect of which is to permit such Lien to be
foreclosed or otherwise satisfied; and (ii) full provision for
the payment of all such taxes known to such Person has been
made on the books of such Person to the extent required by
GAAP;
(b) mechanics', materialmen's, carriers',
warehousemen's and similar Liens arising by operation of law
and arising in the ordinary course of business and securing
obligations of such Person that are not overdue for a period
of more than 30 days or are being contested in good faith by
appropriate proceedings diligently pursued, provided that in
the case of any such contest (i) if any proceedings shall have
been commenced for the enforcement of such Liens, no adverse
judgment or order of foreclosure or other similar order, writ
or relief shall have been granted or issued, the effect of
which is to permit such Lien to be foreclosed or otherwise
satisfied; and (ii) full provision for the payment of such
Liens has been made on the books of such Person to the extent
required by GAAP;
(c) Liens arising in connection with worker's
compensation, unemployment insurance, old age pensions and
social security benefits which are not overdue or are being
contested in good faith by appropriate proceedings diligently
pursued, provided that in the case of any such contest (i) any
proceedings commenced for the enforcement of such Liens shall
have been duly suspended; and (ii) full provision for the
payment of such Liens has been made on the books of such
Person to the extent required by GAAP;
(d) (i) Liens incurred or deposits made in the
ordinary course of business to secure the performance of bids,
tenders, statutory obligations, fee and expense arrangements
with trustees and fiscal agents (exclusive of obligations
incurred in connection with the borrowing of money or the
payment of the deferred purchase price of property) and (ii)
Liens securing surety, indemnity, performance, appeal and
release bonds, in the case of either clause (i) or clause
(ii), securing such bonds in an amount not to exceed
individually or in the aggregate $250,000 at any time
outstanding, provided that full provision for the payment of
all such obligations has been made on the books of such
Person to the extent required by GAAP;
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(e) Permitted Mortgage Liens;
(f) Permitted Third Party Mortgage Liens, if at
the time such Lien is incurred, no Guarantor Event of Default
or Unmatured Guarantor Event of Default exists; and
(g) such other imperfections of title, covenants,
restrictions, easements and other encumbrances on real
property which in each case do not arise out of the incurrence
of any Indebtedness and which do not interfere with or impair
in any material respect the utility, operation, value or
marketability of the real property on which such Lien is
imposed; and
provided, however, to the extent that the amount of obligations of a
Borrower arising from claims being contested in good faith secured by
such Liens referred to in clauses (a), (b), (c) and (d) above exceeds
$1,000,000 in the aggregate, such Borrower shall have set aside full
cash reserves in the amount of the excess over $1,000,000 of such
obligations.
"Permitted Mortgage Lien" means a mortgage or deed of trust
created by a Non-Kmart Borrower in favor of Guarantor which encumbers
such Non-Kmart Borrower's ownership interest in a Project solely for
the purposes of securing such Non-Kmart Borrower's reimbursement
obligations to Guarantor with respect to any amounts actually paid by
Guarantor under the Guaranty; provided, however, that such mortgage
instrument shall expressly provide that:
(a) Guarantor shall have no right to foreclose
such mortgage, or to enforce any other rights thereunder
which conflict with or are inconsistent with Documentation
Agent's and the Banks' rights under this Agreement
(including, without limitation, any rights to collect
insurance proceeds), without Documentation Agent's prior
written consent unless:
(i) no Guarantor Event of Default has
occurred and is continuing and such foreclosure or
other exercise of rights is solely for the purpose
of, and does in fact have the effect of, causing
title to the relevant Project to be vested in
Guarantor or another Borrower hereunder and
concurrently therewith Guarantor or such other
Borrower assumes all of the transferring Borrower's
Obligations with respect to all Project Loans
outstanding with respect to such Project, or
(ii) all Project Loans with respect to
such Project have been paid in full and the
applicable Project Commitments have been terminated;
(b) the mortgage Lien, and all rights of Guarantor
under such mortgage, shall be subordinate to any Lien with
respect
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to such Project at any time created in favor of Documentation
Agent or the Banks (including, without limitation, any
judgment Lien); and
(c) Guarantor shall have no rights with respect
to the rental income from such Project prior to foreclosure of
such mortgage.
"Permitted Third Party Mortgage Lien" means a mortgage or deed
of trust created by a Borrower in favor of any Person other than
Guarantor which encumbers such Borrower's ownership interest in a
Project for the purpose of refinancing all or a portion of the Project
Loans with respect to such Project, provided, that (a) all proceeds of
such refinancing (net of costs of such refinancing) are applied by
such Borrower to the prepayment of such Project Loans, and (b) the
Guarantor shall have given its prior written consent to such mortgage.
"Person" means any of an individual, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or an
agency or political subdivision thereof) or other entity of any kind.
"Plan" means an employee benefit plan (as defined in Section 3
(3) of ERISA) which the Kmart Borrower or any member of the Controlled
Group sponsors or maintains or to which the Kmart Borrower or any
member of the Controlled Group makes, is making or is obligated to
make contributions.
"Project" means a newly constructed Super Kmart Center, Kmart
store or Kmart distribution center or other facility to be used by
Kmart Corporation or a Subsidiary of Kmart Corporation and in any case
located in the United States or a territory thereof and subject to an
APUC obligating Kmart Corporation to purchase such store or other
facility and for which the Documentation Agent has established a
Project Commitment.
"Project Borrowing" means, with respect to any Project, the
Project Loan made to a Borrower for such Project.
"Project Borrowing Date" means, with respect to any Project,
the date of the Project Borrowing.
"Project Commitment" means, with respect to any Project, for
all Banks, the portion of the Total Commitment allocated to said
Project pursuant to Section 2.3 hereof; and for each Bank with respect
to any Project, such Bank's Pro Rata Share of the portion of the Total
Commitment allocated to such Project, in each case, as such amount may
be reduced or increased from time to time pursuant to the terms
hereof.
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"Project Loan" means with respect to any Project, at any time,
the aggregate amount of all Loans made with respect to such Project.
"Project Sale" means the sale, lease (other than leases of
space in a Project) or other disposition (including, without
limitation, any sale and leaseback transaction) to any Person (other
than to an Affiliate of the affected Borrower): (a) by any Non-Kmart
Borrower of all or substantially all of the assets of such Non-Kmart
Borrower; or (b) by any Non-Kmart Borrower of all or substantially all
of any Project.
"Pro Rata Share" means, when used with reference to any Bank
and any described aggregate or total amount, an amount equal to the
result obtained by multiplying such described aggregate or total
amount by a fraction the numerator of which shall be such Bank's
Commitment at such time and the denominator of which shall be the
Total Commitment at such time.
"Reference Banks" means BT and Bank of America National Trust
and Savings Association.
"Reference Rate" means, for any day, the higher of:
(a) 0.5% per annum above the latest Federal Funds Rate
for such day; and
(b) the rate of interest publicly announced from
time to time by BT in New York, New York, as its reference
rate or base rate for such day.
Any change in the Reference Rate announced by BT shall take effect at
the opening of business on the day specified in the public
announcement of such change. The "reference rate" is a rate set by BT
based upon various factors, including BT's costs and desired return,
general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above
or below such announced rate.
"Reference Rate Loan" means a Loan that bears interest based
on the Reference Rate.
"Regulation D" means Regulation D of the Board as from time to
time in effect and any successor to all or a portion thereof
establishing reserve requirements.
"Related Person" means, with respect to any Person, any trade
or business (whether or not incorporated) which, together with such
Person, is under common control as described in Section 414(c) of the
Code or is a member of a controlled group, as defined in Section
414(b) of the Code, which includes such Person.
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"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any
Project, including the movement of Contaminants through or in the air,
soil, surface water, groundwater or property of such Project.
"Remedial Action" means actions required to (a) clean up,
remove, treat or in any other way address Contaminants in the indoor
or outdoor environment; (b) prevent the Release or threat of Release
or minimize the further Release of Contaminants so they do not migrate
or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Rent Expenses" means, for any period, consolidated rent
expense of the Kmart Borrower for such period determined in accordance
with GAAP, less consolidated rental income for such period.
"Reportable Event" means, as to any Plan, (a) any of the
events set forth in Section 4043(b) of ERISA or the regulations
thereunder, other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations issued by the
PBGC, (b) a withdrawal from a Plan described in Section 4063 of ERISA,
or (c) a cessation of operations described in Section 4062(e) of
ERISA.
"Required Banks" means at any time Banks holding at least 51%
of the aggregate of (a) the then Total Commitment (or, if the
Commitments shall have then been terminated in full, the then
aggregate unpaid principal amount of the Loans) plus (b) the then
aggregate commitments under the Other Credit Facilities (or, if the
commitments under any of such facilities shall have then been
terminated in full, then with respect to such terminated facilities
the then aggregate unpaid principal amount of all loans and letter of
credit obligations outstanding under such terminated facilities).
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
a court or of a Governmental Authority, in each case applicable to or
binding upon the Person or any of its property or to which the Person
or any of its property is subject.
"Responsible Officer" means, as to any Borrower at the
relevant time, any of the Chairman of the Board of Directors,
President, Executive Vice President, Treasurer or Chief Financial
Officer of such Borrower or, if such Borrower is a partnership, of a
Partner of such Borrower.
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"Roll-Over Borrowing" means a Loan to a Borrower which, after
giving effect to such Loan and the application of the proceeds
thereof, does not increase the aggregate amount of outstanding Loans
to such Borrower. Roll-Over Borrowings do not constitute either new
borrowings or disbursements by the Banks of additional monies, the
term "Roll-Over Borrowing" being used merely for convenience of
definition and to denote changes in interest rates.
"S&P" means Standard & Poor's Ratings Group or any successor
to the rating agency business thereof.
"Solvent" shall mean, when used with respect to any Borrower,
that (a) after giving effect to the Borrowings which will be permitted
by such Borrower hereunder, it is able to pay its debts or obligations
in the ordinary course as they mature; and (b) such Borrower has
capital sufficient to carry on its business and all business in which
it is about to engage.
"Specialty Retail Subsidiary" means any of the following
Subsidiaries of the Kmart Borrower (or the continuing investment of
the Kmart Borrower in any such entity): Builders Square, Inc.;
Borders, Inc.; Coles Xxxx Ltd.; OfficeMax, Inc.; PACE Membership
Warehouse, Inc.; PayLess Drug Stores Northwest, Inc.; The Sports
Authority, Inc.; and Xxxxxx Book Company, Inc.
"Swingline Commitment" has the meaning assigned to that term
in Section 2.1(c).
"Swingline Interest Rate" means:
(a) with respect to each Swingline Loan which is
a Project Loan, (i) for each day during the period from and
including December 15th of each year through but excluding the
immediately following January 1st, a rate equal to the higher
of (i) Average One Month LIBOR plus the applicable margin set
forth below for such period, or (ii) the Federal Funds Rate
plus the applicable margin set forth below for such period:
Debt Rating Applicable Margin
----------- -----------------
Level I Status .275%
Level II Status .3125%
Level III Status .3625%
Level IV Status .55%;
and (ii) at all other times, a rate equal to the Average One
Month LIBOR plus the applicable margin set forth in this clause (a)
above for such period;
and
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(b) with respect to each Swingline Loan which is
not a Project Loan, (i) for each day during the period from and
including December 15th of each year through but excluding the
immediately following January 1st, a rate equal to the higher of
(i) Average One Month LIBOR plus the applicable margin set forth
below for such period, or (ii) the Federal Funds Rate plus the
applicable margin set forth below for such period:
Debt Rating Applicable Margin
----------- -----------------
Level I Status .225%
Level II Status .2625%
Level III Status .3125%
Level IV Status .50%;
and (ii) at all other times, a rate equal to the Average One
Month LIBOR plus the applicable margin set forth in this clause (b)
above for such period;
"Swingline Lender" means the Documentation Agent acting in the
capacity of a Bank with respect to the Swingline Commitment and the
Swingline Loans.
"Swingline Loans" means the Loans to the Borrowers made by the
Swingline Lender pursuant to Section 2.1(c).
"Swingline Notice of Borrowing" means a notice given by a
Borrower to the Swingline Lender and Documentation Agent pursuant to
Section 2.1(c) in substantially the form of Exhibit G.
"Swingline Rate Loans" means Loans bearing interest at the
Swingline Interest Rate.
"Swingline Register" has the meaning assigned to that term in
Section 2.1(c) (x).
"Subsidiary" means any corporation of which stock having by
the terms thereof ordinary voting power to elect at least a majority
of the board of directors of said corporation is at the time directly
or indirectly owned by the Kmart Borrower or by the Kmart Borrower and
one or more Subsidiaries or by one or more Subsidiaries.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Bank and the
Documentation Agent, such taxes (including income taxes and franchise
taxes) as are imposed on or measured by each Bank's or the
Documentation Agent's net income.
"Termination Date" means the earlier to occur of
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(a) October 6, 1997; and
(b) the date on which the Commitments shall
terminate in accordance with the provisions of this Agreement.
"Total Commitment" means, at the time any determination
thereof is to be made, the sum of the respective Commitments of the
Banks (which will initially be in the total amount of Five Hundred
Million Dollars ($500,000,000)), as such amount may be reduced from
time to time pursuant to this Agreement.
"Total Project Commitments" means, at any time any
determination thereof is to be made, the sum of the respective
Project Commitments for all Projects at such time.
"Total Unused Commitment" means, at the time any determination
thereof is to be made, the sum of the respective Unused Commitments of
the Banks at such time.
"Transferee" has the meaning specified in Section 9.9(d).
"Type" means, with respect to any Loan, its nature as a
Reference Rate Loan, a CD Rate Loan or a LIBOR Loan.
"Unallocated Total Commitment" means, at any time, the lesser
of (a) the Total Commitment less the total principal amount of all
Loans then outstanding or (b) the Total Unused Commitment.
"Unmatured Borrower Event of Default" means an event of
default or event, act or occurrence which with the giving of notice or
the lapse of time (or both) would become a Borrower Event of
Default.
"Umatured Guarantor Event of Default" means an event of
default or event, act or occurrence which with the giving of notice or
the lapse of time (or both) would become a Guarantor Event of Default.
"Unused Commitment" means, when used with reference to any
Bank at the time any determination thereof is to be made, the excess,
if any, of (a) such Bank's Commitment at such time over (b) such
Bank's Utilized Commitment at such time.
"United States" and "U.S." each means the United States of
America.
"Utilized Commitment" means, when used with reference to any
Bank at the time any determination thereof is to be made, the then
outstanding principal amount of all Loans made by such Bank pursuant
to this Agreement and its Pro Rata Share of any Swingline Loans
outstanding.
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The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms. The words "herein,"
"hereof" and words of similar import as used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision
in the Agreement.
Section 1.2 Other Definitional Provisions.
(a) Defined Terms. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have such defined
meanings when used in any certificate or other document made or
delivered pursuant hereto. The meaning of defined terms shall be
equally applicable to the singular and plural forms of the defined
terms.
(b) The Agreement. The words "hereof", "herein",
"hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; and section, schedule and exhibit
references are to this Agreement unless otherwise specified.
(c) Certain Common Terms.
The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures,
notices and other writings, however evidenced.
The term "including" is not limiting and means
"including without limitation."
(d) Performance; Time. Subject to the definition of
"Interest Period" in Section 1.1, whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due
or required to be satisfied on a day other than a Business Day, such
performance shall be made or satisfied on the next succeeding Business
Day. In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including";
the words "to" and "until" each mean "to but excluding"; and the word
"through" means "to and including". If any provision of this
Agreement refers to any action taken or to be taken by any Person,
or which such Person is prohibited from taking, such provision shall
be interpreted to encompass any and all means, direct or indirect, of
taking, or not taking, such action.
(e) Contracts. Unless otherwise expressly provided
herein, references to agreements and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and
other modifications are not prohibited by the terms of any Loan
Document.
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(f) Laws. References to any statute or
regulation are to be construed as including all statutory and
regulatory provisions consolidating, amending or replacing the statute
or regulation.
(g) Captions. The captions and headings of this
Agreement are for convenience of reference only and shall not affect
the construction of this Agreement.
Section 1.3 Accounting Principles.
(a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this
Agreement shall be made, in accordance with GAAP, consistently
applied.
(b) References herein to "fiscal year" and
"fiscal quarter" refer to such fiscal periods of the applicable
Borrower, or, if no Borrower is specified, the Kmart Borrower.
ARTICLE II
LOAN PROVISIONS
Section 2.1 Loans.
(a) Banks' Commitments. Each Bank, severally and
for itself alone, hereby agrees, on the terms and subject to the
conditions hereinafter set forth, to make loans to one or more of the
Borrowers, on the date requested from time to time from and after the
date of this Agreement to, but not including, the Termination Date, in
the Pro Rata Share of such Bank of such amounts as a Borrower may
request with Guarantor's written approval, but not exceeding: (i) in
the aggregate at any one time outstanding, the Commitment of such
Bank; or (ii) with respect to any Project, such Bank's Project
Commitment for such Project; or (iii) with respect to any Non-Project
Commitment, such Bank's Pro Rata Share of such Non-Project Commitment.
(b) Project Borrowings to Initially be Made as
Swingline Loans. Notwithstanding the Provisions of Section 2.1(a),
unless otherwise required by the Documentation Agent, each Project
Borrowing under this Agreement shall initially be made as a Swingline
Loan pursuant to Section 2.1(c).
(c) Swingline Commitment.
(i) Subject to the terms and conditions
of this Agreement and in reliance upon the
representations and warranties of the Borrowers set
forth herein and in the other Loan Documents,
Swingline Lender hereby agrees to make a portion of
the Total
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Commitments of the Banks available to the Borrowers for Project Loans
at any time and from time to time on and after the date hereof and
prior to the Termination Date, upon notice as set forth in Section
2.1(c)(v) below, in an aggregate principal amount of up to $100
million by making Swingline Loans, notwithstanding the fact that the
amount of such Swingline Loans, when aggregated with Swingline
Lender's outstanding Loans and its Pro Rata Share of the Unused
Commitments, may exceed Swingline Lender's Commitment in effect from
time to time. Swingline Lender's commitment to make Swingline Loans
pursuant to this Section 2.1(c) is herein called its "Swingline
Commitment." Swingline Lender's Swingline Commitment shall expire on
the Termination Date and all Swingline Loans shall be paid in full no
later than the Termination Date.
(ii) In no event shall the aggregate principal amount of
Swingline Loans outstanding at any time exceed the Swingline
Commitment and in no event shall the sum of the aggregate principal
amount of Loans (including Swingline Loans) and the aggregate Total
Unused Commitment outstanding at any one time exceed the Total
Commitments of all the Banks. In no event shall the Swingline
Commitment exceed the Total Commitments of all the Banks, and any
reduction of the Total Commitments which reduces the Total Commitments
below the then current amount of the Swingline Commitment shall result
in an automatic corresponding reduction of the Swingline Commitment to
the amount of the Total Commitments as so reduced, without any
further action on the part of Swingline Lender.
(iii) Amounts borrowed under this Section 2.1(c) may be repaid
and reborrowed, provided that no amounts may be reborrowed on or after
the Termination Date, and provided further than amounts borrowed and
repaid hereunder shall not be available to be reborrowed hereunder in
respect of the same Project.
(iv) All Swingline Loans shall bear interest at the Swingline
Interest Rate.
(v) Subject to Section 2.1(a), whenever a Borrower desires to
borrow under this Section 2.1(c), it shall deliver to the Swingline
Lender and the Documentation Agent a Swingline Notice of Borrowing no
later than 11:00 a.m. (New York City time) one Business Day prior to
the proposed Borrowing date (which shall be a Business Day). The
Swingline Notice of Borrowing shall specify the amount of the proposed
Swingline Loan. In lieu of delivering the above-described Swingline
Notice of Borrowing, a Borrower may give the Agent telephonic notice
by the required time of any proposed Borrowing under this Section
2.1(c), provided, that such notice shall be promptly confirmed in
writing by delivery of
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a Swingline Notice of Borrowing to the Documentation Agent on or prior
to the proposed Borrowing Date of the requested Swingline Loan.
(vi) Swingline Lender shall not incur any liability to any
Borrower in acting upon any telephonic notice referred to above which
Swingline Lender believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of
a Borrower or for otherwise acting in good faith under this Section
2.1(c) and, upon the making of a Swingline Loan by Swingline Lender in
accordance with this Agreement pursuant to any telephonic notice, the
applicable Borrower shall be deemed to have borrowed such Swingline
Loan hereunder.
(vii) Each Swingline Notice of Borrowing given pursuant to
this Section 2.1(c) shall be deemed a representation that the Closing
Date shall have occurred and that all conditions to such Borrowing set
forth in Sections 6.2 and 6.3 (if applicable) and 6.4 of this
Agreement have been complied with.
(viii) Promptly after receipt of a Swingline Notice of
Borrowing pursuant to Section 2.1(c)(v) (or telephonic notice in
lieu thereof), and upon satisfaction or waiver by the Banks, the
Required Banks or the Documentation Agent, as applicable, of the
conditions precedent specified in Sections 6.2 and 6.3 (if applicable)
and 6.4, the Swingline Lender shall make the proceeds of such
Swingline Loan available to the applicable Borrower on such Borrowing
date by crediting the same to the account of the Borrower at the
Payment Office of the Documentation Agent.
(ix) Swingline Lender, at any time in its sole and absolute
discretion may, and not less often than once each month shall, on
three (3) Business Days' notice, require each Bank, including
Swingline Lender, either (A) to make a Loan to such Borrower (which,
provided that no Unmatured Guarantor Event of Default or Guarantor
Event of Default shall have occurred and be continuing, shall be of a
Type selected by Kmart Corporation, acting as agent for the applicable
Borrower), for which the applicable Borrower(s) shall be deemed to
have given a Notice of Borrowing pursuant to Section 2.5, in an amount
equal to such Bank's Pro Rata Share of such Swingline Loan, the
proceeds of which Loan shall be applied to repay such Swingline Loan,
or (B) if for any reason such Bank shall fail to make, or shall be
prevented from making, such Loan, to purchase from Swingline Lender a
participation in such Swingline Loan, and any such Bank hereby agrees
to and shall be deemed to have irrevocably purchased from Swingline
Lender, such participation in an amount equal to such Bank's Pro Rata
Share of the amount of such Swingline Loan; provided, however, that in
no event shall any Bank be required to make
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a Loan to refinance a Swingline Loan or to purchase a participation in
a Swingline Loan if such Bank's Loan or its Pro Rata Share of the
amount of such Swingline Loan plus its outstanding Loans (including
its Pro Rata Share of any other Swingline Loans outstanding) and its
Pro Rata Share of the Total Unused Commitment outstanding would exceed
such Bank's Commitment. In the event that such refinancing Loans or
such purchases of participations are made by Banks other than
Swingline Lender under the two immediately preceding sentences, each
such Bank shall make available to Swingline Lender an amount equal to
its respective Loan or participation in same day funds, at the office
of Swingline Lender located at One Bankers Trust Plaza, New York, New
York, not later than 1:00 P.M. (New York City time) on the Business
Day after the date notified by Swingline Lender. Each Bank which
purchases such a participation shall be deemed to have the same rights
of set-off and obligation to share pursuant to Section 9.11 hereof as
it would have had if it were an assignee of Swingline Lender
hereunder. In the event that any Bank fails to make available to
Swingline Lender the amount of such Bank's Loan to refinance or
participation in such Swingline Loan as provided in this Section
2.1(c)(ix) , Swingline Lender shall be entitled to recover such amount
on demand from such Bank together with interest for each day after the
date when such funds were required to be made available hereunder at
the Federal Funds Rate. Each Borrower authorizes the Documentation
Agent to, upon one Business Day's prior written or telephone notice,
charge such Borrower's account with the Documentation Agent (up to the
amount available in each such account) in order immediately to pay
Swingline Lender the amount of such Swingline Loans to the extent
amounts received from the Banks are not sufficient to repay in full
or purchase participations in the full amount of such Swingline Loans.
Each Bank's obligation to make the refinancing Loan or to purchase the
participation referred to in this Section 2.1(c)(ix) shall be absolute
and unconditional and shall not be affected by any circumstance,
including, without limitation:
(1) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against Swingline Lender,
the applicable Borrower(s) or any other Person for any reason
whatsoever;
(2) the occurrence or continuance of an Unmatured
Borrower Event of Default or a Borrower Event of Default with
respect to any Swingline Borrower;
(3) the occurrence or continuance of an Unmatured
Guarantor Event of Default or a Guarantor Event of Default;
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(4) any adverse change in the condition (financial or
otherwise) of the applicable Borrower or any of its
Subsidiaries or the condition of Guarantor;
(5) any breach of this Agreement by the applicable
Borrower or any other Bank;
(6) the failure to satisfy any of the conditions set
forth in Sections 6.1, 6.2, 6.3 or 6.4, as applicable; or
(7) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregone.
A copy of each notice given by Swingline Lender to the Banks
in respect of any Swingline Loan pursuant to this Section 2.1(c)(ix)
shall be promptly delivered by Swingline Lender to applicable
Borrower, with a copy to Guarantor.
(x) The Swingline Lender shall record in a register (the
"Swingline Lender") the Swingline Commitment from time to time of
Swingline Lender, the Swingline Loans made by Swingline Lender and
each repayment with respect to the principal amount of the Swingline
Loans of Swingline Lender. Any such recordation shall be conclusive,
absent manifest error.
(d) Project Borrowings. All Loans made with respect to a Project made
hereunder (other than Roll-Over Borrowings) shall be made in a single drawing
on the Borrowing Date for such Borrowing and no Borrower shall have any right
hereunder to borrow more than once with respect to any particular Project.
Amounts borrowed and repaid hereunder shall not be available to be reborrowed
hereunder in respect of the same Project but, during the period prior to the
Termination Date and subject to the other terms and conditions hereof, may be
reborrowed with respect to a different Project.
Section 2.2 Obligations; Notes; Loan Register; Waiver; Application of
Initial Loans.
(a) Loan Obligations. Each Borrower hereby severally and not jointly
agrees to repay to each Bank the principal amount of, and to pay to each Bank
interest on, such Bank's Loans to such Borrower (with payments hereunder to be
made to Documentation Agent for the benefit of the Banks as set forth in
Section 2.18 hereof). To secure such payment by each Non-Kmart Borrower, each
Non-Kmart Borrower hereby assigns to the Documentation Agent for the benefit of
the Banks all rents which may be payable by the Guarantor to such Borrower
under any lease of the Project or Projects which are the subject of such
Borrower's Borrowings hereunder and all payments which such Borrower may be
entitled to receive from the Guarantor pursuant to any related APUC(s) and
authorizes and
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directs the Guarantor to make all such payments of rent and other amounts
directly to the Documentation Agent for the benefit of the Banks. Each
Borrower shall pay interest on the principal balance of its Loans from time to
time outstanding as provided in this Agreement. Subject to Section 2.6 and to
the earlier acceleration or prepayment of the Loans as permitted or required by
this Agreement, each Borrower shall repay the principal of its Loans in full on
the Termination Date with respect to Reference Rate Loans and Swingline Loans
and on the earlier of the Termination Date or each relevant Interim Maturity
Date with respect to LIBOR Loans and CD Rate Loans.
(b) Notes. Each Borrower's obligation to pay the principal of, and
interest on, each Bank's Loans to such Borrower hereunder shall be evidenced by
a master promissory note of such Borrower payable to the Documentation Agent
for the benefit of all the Banks in accordance with their respective Pro Rata
Shares of such Loan (each an "Initial Note") duly executed and delivered by
such Borrower to the Documentation Agent at the time when the Loan pursuant to
which such Initial Note is issued as requested by the applicable Borrower.
Each Initial Note shall:
(i) be payable to the order of the Documentation Agent for the
benefit of the Banks in accordance with their respective Pro Rata
Shares of the Loans evidenced thereby;
(ii) be dated the date of the Loan pursuant to which such Note
is issued;
(iii) if the Loan pursuant to which such Note is issued is
with respect to a Project, be in original principal amount equal to
the Project Commitment in effect with respect to the Project to which
such Note relates, and if the Loan pursuant to which such Note is
issued is not with respect to a Project, be in an original principal
amount equal to such Loan; and
(iv) otherwise be in substantially the form of Exhibit E
hereto, duly completed.
Notwithstanding the stated principal amount of each Note, such Note shall be
enforceable with respect to the applicable Borrower's obligation to pay the
principal amount thereof only to the extent of the Loans evidenced thereby, and
such Note shall bear interest from time to time only on the unpaid principal
amount of the Loan evidenced thereby.
(c) Loan Register. The Documentation Agent shall maintain a register
(the "Loan Register") on which it will record the Commitment of each Bank, the
Loans from time to time made by each Bank to each Borrower, the Borrowings made
by each Borrower from each Bank and each repayment in respect of any Loan made
to each Bank. Any such recordation by the Documentation Agent on the Loan
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Register shall constitute prima facie evidence of the accuracy of the
information so recorded, absent manifest error. The Documentation Agent may
also record such information an the schedule attached to each Note for such
purpose, which recordation shall constitute prima facie evidence of the
accuracy of the information so recorded, absent manifest error.
Notwithstanding the foregoing, the failure to make a notation in the Loan
Register or such internal records or upon the schedule attached to any Note
with respect to any Borrowing or principal payment, or any error with respect
to any such notation, shall not limit or otherwise affect the obligation of any
Borrower hereunder or under any Note with respect to the Loans, and payments of
principal by any Borrower shall not be affected by the failure to make a
notation thereof or by an error in such notation, nor shall such failure or
error affect any rights of any Borrower hereunder or under applicable law.
(d) Waiver of Presentment, etc. Each Borrower waives presentment,
demand, protest and notice of dishonor in connection with the payment of its
Obligations.
(e) Application of Certain Project Loans. Borrowers acknowledge that:
(i) LAFGA Star Associates, L.P. (the "March 1994 Bridge
Borrower") is party to that certain loan agreement dated as of March
31, 1994 (the "March 1994 Bridge Agreement") and that certain
promissory note dated as of March 31, 1994 payable to BT (the "March
1994 Bridge Note") , pursuant to which the March 1994 Bridge Borrower
borrowed funds from BT with respect to the Project consisting of a
Kmart department store located at Lafayette, Georgia (the "Lafayette
Georgia Project");
(ii) Kmart Corporation (the "May 1994 Bridge Borrower") is
party to that certain loan agreement dated as of May 9, 1994 (the "May
1994 Bridge Agreement") and that certain promissory note dated as of
May 9, 1994 payable to BT (the "May 1994 Bridge Note"), pursuant to
which the May 1994 Bridge Borrower borrowed funds from BT with respect
to the Project consisting of a Kmart department store located at
Sherman, Texas (the "Xxxxxxx Project");
(iii) Xxxxxxx and Associates, Inc. (the "June 1994 Bridge
Borrower") is party to that certain loan agreement dated as of June
22, 1994 (the "June 1994 Bridge Agreement") and that certain
promissory note dated as of June 22, 1994 payable to BT (the "June
1994 Bridge Note"), pursuant to which the June 1994 Bridge Borrower
borrowed funds from BT with respect to the Project consisting of a
Kmart department store located a Hattiesburg, Mississippi (the
"Hattiesburg Project");
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(iv) Lafayette Group Associates, L.P. (the "August 8, 1994
Bridge Borrower") is party to that certain loan agreement dated as of
August 8, 1994 (the "August 8, 1994 Bridge Agreement") and that
certain promissory note dated as of August 8, 1994 payable to BT (the
"August 8, 1994 Bridge Note"), pursuant to which the August 8, 1994
Bridge Borrower borrowed funds from BT with respect to the Project
consisting of a Kmart department store located at Lafayette, Louisiana
(the "Lafayette Louisiana Project");
(v) National Realty & Development Corp. (the "August 11, 1994
Bridge Borrower") is party to that certain loan agreement dated as of
August 11, 1994 (the "August 11, 1994 Bridge Agreement") and that
certain promissory note dated as of August 11, 1994 payable to BT (the
"August 11, 1994 Bridge Note"), pursuant to which the August 11, 1994
Bridge Borrower borrowed funds from BT with respect to the Project
consisting of a Kmart department store located at Xxxxxx, New York
(the "Xxxxxx Project");
(vi) Waco Star Associates, Ltd. (the "September 21, 1994 Bridge
Borrower") is party to that certain loan agreement dated as of
September 21, 1994 (the "September 21, 1994 Bridge Agreement") and
that certain promissory note dated as of September 21, 1994 payable to
BT (the "September 21, 1994 Bridge Note"), pursuant to which the
September 21, 1994 Bridge Borrower borrowed funds from BT with respect
to the Project consisting of a Kmart department store located at Waco,
Texas (the "Waco Project"); and
(vii) Continental 37 Fund Limited Partnership (the "October 0,
0000 Xxxxxx Xxxxxxxx" and, together with the March 1994 Bridge
Borrower, the May 1994 Bridge Borrower, the June 1994 Bridge Borrower,
the August 8, 1994 Bridge Borrower, the August 11, 1994 Bridge
Borrower and the September 21, 1994 Bridge Borrower, the "Bridge
Borrowers") is party to that certain loan agreement dated as of
October 5, 1994 (the "October 5, 1994 Bridge Agreement" and, together
with the March 1994 Bridge Agreement, the May 1994 Bridge Agreement,
the June 1994 Bridge Agreement, the August 8, 1994 Bridge Agreement,
the August 11, 1994 Bridge Agreement and the September 21, 1994 Bridge
Agreement, the "Bridge Agreements") and that certain promissory note
dated as of October 5, 1994 payable to BT (the "October 5, 1994 Bridge
Note" and, together with the March 1994 Bridge Note, the May 1994
Bridge Note, the June 1994 Bridge Note, the August 8, 1994 Bridge
Note, the August 11, 1994 Bridge Note and the September 21, 1994
Bridge Note, the "Bridge Notes"), pursuant to which the October 5,
1994 Bridge Borrower borrowed funds from BT with respect to the
Project consisting of a Kmart department store located at Mankato,
Minnesota (the "Mankato Project" and, together with the Lafayette
Georgia Project, the Xxxxxxx Project, the
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Hattiesburg Project, the Lafayette Louisiana Project, the
Xxxxxx Project and the Waco Project, the "Bridged Projects").
The Banks and the Documentation Agent hereby agree with the Borrowers that the
Indebtedness of the Bridge Borrowers to BT under the Bridge Agreements and the
Bridge Notes shall be refinanced under this Agreement and further agree that
the proceeds of the Project Loans made to the Bridge Borrowers hereunder with
respect to the Bridged Projects shall be applied to repayment of the Bridge
Notes to BT, and that no Loans shall be made to the Bridge Borrowers hereunder
for any other purpose until all Indebtedness of the Bridge Borrowers to BT
under the Bridge Agreements and the Bridge Notes shall be repaid in full.
Section 2.3 Allocation of Total Commitment.
(a) Each Borrower hereunder shall, on the date of the Notice of
Borrowing with respect to such Borrowing, submit to the Documentation Agent a
written request (an "Allocation Request") to establish a Project Commitment
(or, if such Borrowing is by the Kmart Borrower for other purposes, to
establish a Non-Project Commitment). Each Allocation Request shall:
(i) be in substantially the form of Exhibit F hereto, duly
completed to reflect the circumstances;
(ii) be approved in writing by Guarantor;
(iii) specify the aggregate amount of the then Unallocated
Total Commitment which such Borrower desires to be allocated pursuant
to such Allocation Request;
(iv) if made with respect to a Project, be accompanied by
Payoff Letters from all existing lenders with respect to such Project
and a title report with respect to such Project, in form and substance
(including recentness) satisfactory to the Documentation Agent,
confirming that no Person other than such existing lenders have liens
of record against such Project, and
(vi) be accompanied by the Initial Note to evidence such
Borrowing, duly executed by such Borrower.
(b) The Documentation Agent shall consider Allocation Requests in the
order received or if received on the same day, in the order so directed by
Guarantor or, if no such direction is given, in the Documentation Agent's sole
discretion. Subject to the foregoing, the Documentation Agent, within five (5)
Business Days, either shall establish a Project Commitment or Non-Project
Commitment (as applicable) in the amount set forth in the Allocation Request
or, if the Unallocated Total Commitment at such time is insufficient or the
conditions precedent to the Borrowing
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requested in connection with such request are not otherwise satisfied (or
waived), shall notify the applicable Borrower, Guarantor and the Banks that
such commitment cannot be established.
Section 2.4 Terms of Borrowing. The Loans shall, except as otherwise
provided in this Agreement, be Swingline Rate Loans, Reference Rate Loans, CD
Rate Loans or LIBOR Loans. As to any LIBOR Loan, any Bank may, if it so
elects, fulfill its commitment by causing a foreign branch or Affiliate to make
or continue such Loan, provided that in such event that Bank's Loan shall, for
the purposes of this Agreement, be considered to have been made by that Bank
and the obligation of the applicable Borrower to repay that Bank's Loan shall
nevertheless be to that Bank and shall be deemed held by that Bank, for the
account of such branch or affiliate.
Section 2.5 Notice of Borrowing.
(a) Subject to Section 2.1 hereof, each Borrowing other than a
Swingline Borrowing shall be made upon the irrevocable request of the
applicable Borrower by a facsimile to the Documentation Agent (which shall be
confirmed promptly by a telephone call) in the form of a Notice of Borrowing,
appropriately completed, which specifies the Project for which such Borrowing
will be used, if any, or if such Borrowing is requested by the Kmart Borrower
for other purposes shall so state, which facsimile must be received by the
Documentation Agent prior to 11:00 a.m. (New York City time) (i) three (3)
Business Days prior to the requested borrowing date, in the case of LIBOR
Loan, (ii) two Business Days prior to the requested borrowing date, in the
case of CD Rate Loans and (iii) on the requested borrowing date, in the case of
Reference Rate Loans, and shall specify:
(i) the amount of the Borrowing, which shall be in an
aggregate minimum principal amount of Five Million Dollars
($5,000,000) or any amount in excess thereof for any Project Loan, and
shall be in an aggregate minimum principal amount of Ten Million
Dollars ($10,000,000) or any multiple of Five Million Dollars
($5,000,000) in excess thereof for any Loan for other purposes;
(ii) the requested Borrowing Date, which shall be a Business
Day;
(iii) whether the Borrowing is to be comprised of LIBOR Loans,
CD Rate Loans or Reference Rate Loans; and
(iv) if the Borrowing is to be comprised of LIBOR Loans or CD
Rate Loans, the duration of the initial Interest Period applicable to
such Loans. If the Notice of Borrowing shall fail to specify the
duration of the initial Interest Period for any LIBOR Loans or CD Rate
Loans, the applicable Xxxxxxxx
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xxxxx xx deemed to have elected an Interest Period of one month or 30
days, respectively;
provided, however, that with respect to any Borrowing to be made on the Closing
Date, a Notice of Borrowing shall be delivered to the Documentation Agent not
later than 11:00 a.m. (New York City time) on the Closing Date (such Borrowing
will consist of Swingline Rate Loans only).
(b) Upon receipt of the Notice of Borrowing, the Documentation Agent
shall promptly notify each Bank thereof and of the amount of such Bank's share
of the requested Borrowing based on such Bank's Pro Rata Share thereof.
(c) Each Bank will make its share of each Borrowing available to the
Documentation Agent for the account of the applicable Borrower at the
Documentation Agent's Payment Office specified on the signature page hereto or
at such other address as the Documentation Agent shall hereafter specify to the
Banks by 2:00 p.m. (New York City time) on the borrowing date requested by the
applicable Borrower by payment in Dollars and in funds immediately available to
the Documentation Agent. Unless any applicable condition specified in Sections
6.2 and 5.2 (if applicable) and Section 6.4 has not been satisfied, the
proceeds of all such Loans will then be made available to the applicable
Borrower by the Documentation Agent at such office by crediting the account of
such Borrower with the aggregate of the amounts made available to the
Documentation Agent by the Banks and in like funds as received by the
Documentation Agent.
(d) After giving effect to any Borrowing, unless consented to by the
Documentation Agent in its sole discretion, there shall not be more than six
(6) different Interest Periods in effect in respect of all LIBOR Loans then
outstanding, and not more than twelve (12) Interest Periods in respect of all
Loans then outstanding.
Section 2.6 Conversion and Continuation Elections for Borrowings.
(a) The Kmart Borrower (and Kmart Corporation, as agent for each
Non-Kmart Borrower) may, upon notice to the Documentation Agent in accordance
with Section 2.6(b):
(i) elect to convert, on any Business Day, any Reference Rate
Loans (or any part thereof) in an aggregate amount not less than Five
Million Dollars ($5,000,000), into LIBOR Loans or CD Rate Loans; or
(ii) elect to convert, as of the last day of any Interest
Period, any LIBOR Loans maturing on such day (or any part thereof in
an aggregate amount not less than Five Million
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Dollars ($5,000,000) into Reference Rate Loans or CD Rate Loans; or
(iii) elect to convert, as of the last day end of
any Interest Period, any CD Rate Loans maturing on such day (or any
part thereof in an aggregate amount not less than Five Million
Dollars ($5,000,000) into Reference Rate Loans or LIBOR Loans; or
(iv) elect to continue as of the last day of any
Interest Period (a "Continuation Data") any LIBOR Loans or CD Rate
Loans maturing on such day (or any part thereof in an aggregate
amount not less than Five Million Dollars ($5,000,000);
provided, that if the aggregate amount of all LIBOR Loans or CD Rate
Loans comprised in any Borrowing shall have been or would be reduced, by
payment, prepayment, or conversion of part thereof to an amount less
than Five Million Dollars ($5,000,000), such LIBOR Loans or CD Rate Loans
shall automatically convert into Reference Rate Loans, on and as of the
end of the applicable Interest Period.
(b) If Kmart Corporation, as each Borrower's agent, desires to
convert or continue any Loan pursuant to Section 2.6(a), it shall
irrevocably request a conversion or continuation by a facsimile
(confirmed promptly by telephone) of a Notice of Conversion/Continuation
to be received by the Documentation Agent not later than 11:00 a.m. (New
York City time) at least (i) three (3) Business Days in advance of the
Conversion Date or Continuation Date, if the Loans are to be converted
into or continued as LIBOR Loans, (ii) two (2) Business Days in advance
of the Conversion Date or Continuation Date, if the Loans are to be
converted into or continued as CD Rate Loans and (iii) on the same
Business Day as the Conversion Date, if the Loans are to be converted
into Reference Rate Loans, specifying:
(A) the proposed Conversion Date or Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the nature of the proposed conversion or continuation;
and
(D) the duration of the requested Interest Period, if the
Loans are to be converted into or continued as LIBOR Loans or CD
Rate Loans.
(c) If prior to the time set forth in Section 2.6(b),
Kmart Corporation, as agent for each Borrower, has failed to (i) give
a timely Notice of Conversion/Continuation with respect to such LIBOR
Loans or CD Rate Loans or (ii) select a new Interest Period to be
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applicable to such LIBOR Loans or CD Rate Loans, such Borrower shall
be deemed to have elected to convert such Loans into LIBOR Loans with
an Interest Period of one month effective as of the expiration of the
applicable interest Period.
(d) During the existence of an Unmatured Guarantor Event
of Default or a Guarantor Event of Default (or, with respect to a
particular Borrower, an Unmatured Borrower Event of Default or a
Borrower Event of Default), unless the Required Banks agree otherwise,
the affected Borrower(s) (or Kmart Corporation (which the Borrowers
hereby jointly and severally irrevocably designate as their collective
agent for such purpose), acting as their agent) may not elect to have
a Loan be converted into or continued as a LIBOR Loan or a CD Rate
Loan.
(e) Upon receipt of a Notice of Conversion/ Continuation,
the Documentation Agent will promptly notify each Bank thereof, or, if
no timely notice is provided, the Documentation Agent will promptly
notify each Bank of the details of any automatic conversion or
continuation. All conversions and continuations pursuant to this
Section 2.6 shall be made pro rata according to the respective
outstanding principal amounts of the Loans being converted or continued
held by each Bank.
Section 2.7 Interest.
(a) Subject to Sections 2.7(f) and (g) , each Project
Loan (other than Swingline Loans) shall bear interest on the
outstanding principal amount thereof from the date when made until
paid in full, at the option of the applicable Borrower or Kmart
Corporation (as agent for the Borrowers) as set forth in the
applicable Notice of Borrowing or Notice of Conversion/Continuation:
(i) if such Loan is a Reference Rate Loan, at a
rate per annum equal to the Reference Rate;
(ii) if such Loan is a LIBOR Loan, at a rate per
annum equal to the sum of LIBOR plus the applicable margin set
forth below:
Debt Rating Applicable Margin
Level I Status .275%
Level II Status .3125%
Level III Status .3625%
Level IV Status .55%
and
(iii) if such Loan is a CD Rate Loan, at a rate per
annum equal to the sum of the CD Rate plus the applicable
margin set forth below:
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Debt Rating Applicable Margin
Level I Status .40%
Level II Status .4375%
Level III Status .4875%
Level IV Status .6750%
(b) Subject to Sections 2.7(f) and (g), each Loan, other than
Project Loans and Swingline Loans, shall bear interest on the
outstanding principal amount thereof from the date when made until paid
in full, at the option of the Kmart Borrower as set forth in the
applicable Notice of Borrowing or Notice of Conversion/Continuation:
(i) if such Loan is a Reference Rate Loan, at a rate per
annum equal to the Reference Rate;
(ii) if such Loan is a LIBOR Loan, at a rate per annum equal
to the sum of LIBOR plus the applicable margin set forth below:
Debt Rating Applicable Margin
Level I Status .225%
Level II Status .2625%
Level III Status .3125%
Level IV Status .50%
and
(iii) if such Loan is a CD Rate Loan, at a rate per
annum equal to the sum of the CD Rate plus the applicable margin set
forth below:
Debt Rating Applicable Margin
Level I Status .35%
Level II Status .3875%
Level III Status .4375%
Level IV Status .625%
(c) Any change in the Debt Rating shall be effective as of the
date on which such change is first publicly announced by Xxxxx'x or S&P.
Any change in the applicable margin due to a change in the applicable
Debt Rating shall be effective on the effective date of such change in
the Debt Rating and shall apply to all Loans that are outstanding at any
time during the period commencing on the effective date of such change in
the Debt Rating and ending on the date immediately preceding the
effective date of the next such change in the Debt Rating which results
in a change in the applicable margin.
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(d) Subject to Sections 2.7(f) and (g), each Swingline Loan shall
bear interest on the outstanding principal amount thereof from the date
when made until paid in full at the Swingline Interest Rate.
(e) Interest on each Loan shall be payable in arrears an each
applicable Interest Payment Date. Interest shall also be payable on the
date of any prepayment of any LIBOR Loans or CD Rate Loans for the
portion of the Loans so prepaid, and, in the case of conversion of any
Reference Rate Loan, on the date of conversion thereof into a LIBOR Loan
or a CD Rate Loan.
(f) After acceleration, and after as well as before any entry of
judgment thereon, and at the election of the Documentation Agent or the
Required Banks during any period while a Guarantor Event of Default or,
with respect to a particular Borrower, a Borrower Event of Default as to
such Borrower, is continuing, each Borrower affected shall pay interest
(after as well as before judgment to the extent permitted by law) on the
principal amount of all Loans made to it which are due and unpaid, at a
rate per annum which is determined by increasing the rate(s) of interest
then in effect by 2% per annum; provided, however, that, if a Guarantor
Event of Default (or, with respect to such Borrower, a Borrower Event of
Default) has occurred and is continuing and the Documentation Agent or
the Required Banks have so elected, on and after the expiration of the
Interest Period applicable to any LIBOR Loan or CD Rate Loan outstanding
on the date of occurrence of such Event of Default or acceleration, the
principal amount of such Loan shall, during the continuation of such
Event of Default, bear interest at a fluctuating rate per annum equal to
the Reference Rate plus 2% (the "Default Rate").
(g) Anything herein to the contrary notwithstanding, the
obligations of the Borrowers hereunder shall be subject to the limitation
that payments of interest shall not be required, for any period for which
interest is computed hereunder, to the extent (but only to the extent)
that contracting for or receiving such payment by the respective Bank
would be contrary to the provisions of any law applicable to such Bank
limiting the highest rate of interest which may be lawfully contracted
for, charged or received by such Bank, and in such event the applicable
Borrower(s) shall pay such Bank interest at the highest rate permitted by
applicable law.
Section 2.8 Computation of Fees and Interest.
(a) All computation of fees and interest under this Agreement
shall be made on the basis of a 360-day year and actual days elapsed.
Interest and fees shall accrue during each period during which interest
or such fees are computed from and including the first day thereof to but
excluding the last day thereof. Any interest or fees not paid when due
after any applicable grace period shall bear interest at the Default
Rate.
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(b) The Documentation Agent will, with reasonable promptness,
notify the Borrowers, Guarantor and the Banks of each determination of
LIBOR, the CD Rate and the Reference Rate; provided that any failure to
do so shall not relieve the Borrowers of any liability hereunder. The
Documentation Agent will, with reasonable promptness, notify the
Borrowers, Guarantor and the Banks of the effective date and the amount
of any change in the Debt Rating resulting in a change in the
applicable rate of interest or fees, provided, that any failure to do
so shall not relieve the Borrowers of any liability hereunder.
(c) Each determination of an interest rate by the Documentation
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Banks in the absence of manifest error.
The Documentation Agent, at the request of any Borrower or any Bank, will
deliver to such Borrower or such Bank, as the case may be, a statement
showing the quotations used by the Documentation Agent in determining any
interest rate.
(d) If any Reference Bank's Commitment shall terminate (otherwise
than on termination of the Total Commitment), or for any reason
whatsoever either Reference Bank shall cease to be a Bank hereunder, then
such Reference Bank shall thereupon cease to be a Reference Bank, and,
when necessary (until such Reference Bank shall have been replaced
pursuant to Section 2.8(e), LIBOR and the CD Rate shall be determined on
the basis of the rates as notified by the remaining Reference Bank.
(e) Each Reference Bank shall use its best efforts to furnish
quotations of rates to the Documentation Agent as contemplated hereby.
If either Reference Bank shall be unable or otherwise fail to supply such
rates to the Documentation Agent upon its request, the rate of interest
shall be determined on the basis of the quotations of the remaining
Reference Bank. Guarantor and the Documentation Agent may select a new
Reference Bank to replace any Reference Bank that shall cease to be a
Bank hereunder or that fails to supply rates as required hereunder.
Section 2.9 Mandatory, Reduction of the Commitments. If at any time
for any Project, the principal amount of a Loan by any Bank for such
Project exceeds the Project Commitment of such Bank then in effect with
respect to such Project, the applicable Borrower shall immediately prepay
the Loan Obligations incurred with respect to such Project, and the Note
evidencing such Loan Obligations, in a principal amount equal to such
excess. If any Guarantor Event of Default shall have occurred and the
Documentation Agent shall have notified the Borrowers of the election of
the Required Banks to take any action specified in Section 7.1, the
Commitment and each Project Commitment and Non-Project Commitment of each
Bank shall be automatically reduced to $0 without any action on the part
of or the giving of notice to any
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Borrower by the Documentation Agent or any Bank. If a Borrower
Event of Default shall have occurred and the Documentation Agent
shall have notified the relevant Borrower of the election of the
Required Banks to take any action specified in Section 7.2, the
Project Commitment of each Bank for all Projects of such Borrower
shall be automatically reduced to $0 without any action on the part
of or the giving of notice to such Borrower by the Documentation
Agent or any Bank.
Section 2.10 Voluntary Reduction of the Total Commitment. After the
Initial Borrowing Date, Kmart Corporation (which the Borrowers hereby
jointly and severally irrevocably designate as their collective agent for
such purpose) shall have the right, upon at least five (5) Business Days,
prior written notice to the Documentation Agent, without premium or
penalty, to permanently reduce or terminate the unutilized portion of the
Unallocated Total Commitment of the Banks, in whole at any time or in
part from time to time, in a minimum amount of $10 million (unless the
amount of such Unallocated Total Commitment at such time is less than $10
million, in which case, in an amount equal to the amount of such
Unallocated Total Commitment at such time) and, if such reduction is
greater than $10 million, in an integral multiple of $5 million, provided
that any such reduction shall apply proportionately to the Commitment of
each of the Banks. The Total Commitment shall not be so reduced below
the aggregate principal amount of outstanding Loans nor shall the Total
Commitment be reduced below the amount of the aggregate of the Total
Project Commitment and the aggregate of all Non-Project Commitments at
such time.
Section 2.11 Voluntary Prepayments of the Loan Obligations. Any
Borrower may, as hereinafter provided, prepay the Loan Obligations of
such Borrower, and the Notes evidencing the same, in whole at any time or
in part from time to time as provided herein, without premium or penalty,
but subject to the provisions of Article III. Any partial prepayment
of the Loan Obligations of such Borrower pursuant to this Section 2.11
shall be in a minimum aggregate amount of not less than $1 million. The
relevant Borrower shall irrevocably give notice (by telegram or
telecopier, or by telephone (confirmed in writing promptly thereafter))
to the Documentation Agent (which shall promptly advise each other Bank)
of each proposed prepayment hereunder, prior to 10:00 a.m., New York City
time, on the second Business Day prior to the proposed prepayment date,
which notice shall specify the proposed prepayment date (which shall be a
Business Day) and the aggregate principal amount of the proposed
prepayment and the Project or Projects (and the Notes) to which such
prepayment applies. Upon giving of such irrevocable notice, the amount
specified to be prepaid shall become due and payable in full on the date
specified in such notice. Neither the Total Commitment nor the
Commitment of any Bank shall be reduced pursuant to any such prepayment,
unless the Borrowers shall have requested such a reduction in compliance
with the provisions of Section 2.10.
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Section 2.12 Mandatory Prepayment of the Loan Obligations.
(a) If any Non-Kmart Borrower receives any Net Proceeds with
respect to any Project (whether in cash or securities), then such
Borrower shall prepay any outstanding Loans relating to such Project, and
the Notes evidencing the same, promptly (but in any event within five (5)
Business Days) to the extent of such proceeds for the ratable benefit of
the Banks;
(b) If any Borrower receives any proceeds of a refinancing
incurred in connection with a Permitted Third Party Mortgage Lien, then
such Borrower shall immediately prepay any outstanding Loans relating to
the Project encumbered by such Permitted Third Party Mortgage, and the
Notes evidencing such Loans, to the extent of such proceeds (net of the
cost of such refinancing) and, in the event such proceeds are not
sufficient to pay in full all of the Project Loans (and Notes evidencing
such Loans) for such Project, then such Borrower shall, not later than
six (6) months after the date such Permitted Third Party Mortgage is
incurred (or at such earlier date as required by this Agreement, if
applicable), pay in full the unpaid principal balance of the Project
Loans for such Project and the Notes evidencing such Loans, together with
accrued interest thereon, and any Project Commitment with respect to such
Project shall thereupon terminate.
(c) Prepayments made pursuant to this Section 2.12 shall be
treated according to Section 2.13 to the extent that they are to be
applied to LIBOR Loans or CD Rate Loans for which the relevant Interest
Period has not expired at the time of prepayment. Prepayments made
pursuant to this Section 2.12 shall be treated according to Section 2.14
for determining the order of application of prepayments to the Loans.
Section 2.13 Other Provisions With Respect to Prepayments. Except
as otherwise provided herein, any repayment of a LIBOR Loan or a CD Rate
Loan which shall be made prior to the end of the applicable Interest
Period for such Loan shall be subject to the provisions of Article III
hereof. Subject to the obligations of the Documentation Agent provided
for in this Section 2.13, at the option of Kmart Corporation (as agent
for the affected Borrower), any monies otherwise required to be used to
repay such LIBOR Loan or CD Rate Loan may be so applied provided that
such Borrower concurrently pays any amount due under Article III hereof
in respect of such prepayment; otherwise if the relevant Interest Period
for such LIBOR Loan or CD Rate Loan has not expired such funds (the
"Deposited Monies") shall, until the end of the applicable Interest
Period when the Deposited Monies shall be applied to make such
prepayment, be held in trust by the Documentation Agent (or, at the
Documentation Agent's option, as cash collateral) for the Banks in a
non-interest bearing account and the relevant Borrower shall have no
right to or interest in such funds and such funds shall be used to prepay
such LIBOR Loan
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or CD Rate Loan at the end of the applicable Interest Period;
provided, however, that any funds held in such account shall be
invested by the Documentation Agent (to the extent the Documentation
Agent is able to do so) on behalf of the relevant Borrower at the
direction of such Borrower in Permitted Investments selected by such
Borrower and having a maturity not exceeding the Business Day prior
to the end of the relevant Interest Period. Interest on the
applicable Project Loan Obligations shall continue to accrue until
the Deposited Monies are applied to the prepayment thereof. Any
such investments shall be held by the Documentation Agent or under
the control of the Documentation Agent. The interest accruing on
such investments and any profits realized from such investments
shall be, after giving effect to such repayment of such Loans and
any interest thereon with the Deposited Monies, paid to the relevant
Borrower; provided that any loss resulting from such investments
shall be charged to and be immediately payable by such Borrower upon
demand of the Documentation Agent. A prepayment so made by the
Documentation Agent from such Deposited Monies shall be treated as a
prepayment, by such Borrower pursuant to Section 2.12 (except that
such prepayment shall not be subject to the minimum prepayment amount
requirements of Section 2.12) and shall be otherwise governed by
such Section.
Section 2.14 Order of Prepayments and Payments.
(a) All prepayments of principal made by any Borrower pursuant to
Sections 2.12 and 2.13 shall be applied to the payment of the outstanding
balance of any applicable Project Loan and the Note evidencing the same
as directed by such Borrower with respect to breakage of Interest
Periods, provided that no Guarantor Event of Default has occurred and is
then continuing and no Borrower Event of Default as to such Borrower has
occurred and is then continuing. Any prepayment of principal made after
the occurrence and during the continuance of a Guarantor Event of Default
or a Borrower Event of Default as to the applicable Borrower shall be
applied against the Loan Obligations of such Borrower and the Notes
evidencing the same as the Documentation Agent shall, in its sole
discretion, determine.
(b) Any prepayments of a Loan pursuant to Sections 2.12 and 2.13
shall permanently reduce by a like amount the pro rata Project Commitment
of each of the Banks corresponding to the Project Loan so prepaid.
Section 2.15 Fees.
(a) From and after the date hereof the Borrowers shall pay in
Dollars to the Documentation Agent for the pro rata distribution to each
Bank a facility fee in an amount equal to the Total Commitments in effect
for each day (regardless of utilization), at a rate per annum, as
follows: (1) .125% if Level I Status exists on such day, (2) .1375% if
Level II Status exists on such day, (3)
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.1875% if Level III Status exists on such day, and (4) .2500% if Level IV
Status exists on such day. Such facility fee shall accrue from the
Closing Date to the Termination Date and shall be computed for each
calendar quarter and be payable quarterly in arrears on each January 15,
April 15, July 15 and October 15 (and on the Termination Date),
commencing with January 15, 1995, and ending on the Termination Date.
Such fee shall be allocated among the Borrowers as follows: (i) if no
Guarantor Event of Default has occurred and is continuing, in such manner
as Guarantor shall designate from time to time or, if no designation is
made, pro rata to each Borrower in proportion to its aggregate Project
Commitments and Non-Project Commitments outstanding as of the date such
fee is payable; and (ii) if a Guarantor Event of Default shall have
occurred and be continuing, then pro rata to each Borrower, in proportion
to its respective Project Commitments and Non-Project Commitments as of
the date such fee is payable or, if no Project Commitments and
Non-Project Commitments are then outstanding, equally to each Borrower.
(b) Syndication Fees. Guarantor shall pay in Dollars to the
Arrangers on the Closing Date fees in the amount set forth in a letter
agreement between Guarantor and BT and BofA dated August 29, 1994.
(c) Administration Fees. Guarantor shall pay to the Documentation
Agent administration and transaction fees in Dollars in the amounts and
at the times set forth in a letter agreement between Guarantor and BT and
BofA dated August 29, 1994.
Section 2.16 Responsibility for Making Loans. No Bank shall be
responsible for any default by any other Bank in its obligation to make
Loans hereunder and each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any
other Bank to fulfill its Commitment hereunder.
Section 2.17 Withholding Tax Exemption. At least five (5) Business
Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated
under the laws of the United States of America, or a state thereof,
agrees that it will deliver to the Documentation Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Bank is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes. Each Bank which so delivers a
Form 1001 or 4224 further undertakes to deliver to the Documentation
Agent two additional copies of such form (or a successor form) on or
before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or
becomes obsolete or after the occurrence of any event requiring a change
in the most recent forms so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be
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reasonably requested by the Documentation Agent, in each case certifying
that such Bank is entitled to receive payments under this Agreement and
the Notes without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank advises the
Documentation Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
Section 2.18 Payments by the Borrowers.
(a) All payments (including prepayments) to be made by the
Borrowers on account of principal, interest, fees and other amounts
required hereunder shall be made without set-off or counterclaim and
shall, except as otherwise expressly provided herein, be made to the
Documentation Agent at its Payment Office for the ratable account of the
Banks in Dollars and in immediately available funds, no later than
(unless otherwise waived by the Documentation Agent with respect to a
payment) 2:00 p.m. (New York City time) on the date specified herein.
The Documentation Agent will promptly distribute to each Bank its Pro
Rata Share (or other applicable share as expressly provided herein) of
such principal, interest, fees or other amounts, in like funds as
received. Any payment which is received by the Documentation Agent later
than 2:00 p.m. (New York City time) shall be deemed to have been received
on the immediately succeeding Business Day and any applicable interest or
fee shall continue to accrue until such payment is deemed to have been
received.
(b) Except as otherwise set forth in the definition of Interest
Period, whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.
(c) Unless the Agent shall have received notice from a Borrower
prior to the date on which any payment is due to the Banks hereunder that
such borrower will not make such payment in full, the Documentation Agent
may assume that the Borrower has made such payment in full to the
Documentation Agent as required hereunder on such date and the
Documentation Agent may (but shall not be so required), in reliance upon
such assumption, cause to be distributed to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent such
Borrower shall not have made such payment in full to the Documentation
Agent, each Bank shall repay to the Documentation Agent on demand such
amount distributed to such Bank, together with interest
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thereon for each day from the date such amount was distributed to such Bank
until the date such Bank repays such amount to the Documentation Agent at the
Federal Funds Rate.
Section 2.19 Payments by the Banks to the Documentation Agent.
(a) Unless the Documentation Agent shall have received notice from
a Bank on the Closing Date or, with respect to each Borrowing after the Closing
Date, at least one (1) Business Day prior to the date of the proposed
Borrowing, that such Bank will not make available to the Documentation Agent
for the account of the applicable Borrower the amount of that Bank's share of
Loans included in the Borrowing, the Documentation Agent may assume that each
Bank has made such amount available to the Documentation Agent as required
hereunder on the borrowing date and the Documentation Agent may (but shall not
be so required), in reliance upon such assumption, make available to the
applicable Borrower on such date a corresponding amount. If and to the extent
any Bank shall not have made its full amount available to the Documentation
Agent and the Documentation Agent in such circumstances has made available to
the applicable Borrower such amount, that Bank shall on the next Business Day
following the date of such Borrowing make such amount available to the
Documentation Agent, together with interest at the Federal Funds Rate, in each
case as in effect for each such day. A certificate of the Documentation Agent
submitted to any Bank with respect to amounts owing under this Section 2.19(a)
shall be conclusive, absent manifest error. If such amount is so made
available, such payment to the Documentation Agent shall constitute such Bank's
Loan on the date of Borrowing for all purposes of this Agreement. If such
amount is not made available to the Documentation Agent on the next Business
Day following the date of such Borrowing, the Documentation Agent shall notify
the applicable Borrower of such failure to fund and, upon demand by the
Documentation Agent, such Borrower shall pay such amount to the Documentation
Agent for the Documentation Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the Loans comprising such
Borrowing without making or being responsible for any payment under Article
III.
(b) The failure of any Bank to make any Loan on any date of
Borrowing shall not relieve any other Bank of any obligation hereunder to make
a Loan on the date of such Borrowing, but no Bank shall be responsible for
the failure of any other Bank to make the Loan to be made by such other Bank
on the date of any Borrowing.
Section 2.20 Sharing of Payments, Etc.
(a) If, other than as expressly set forth elsewhere herein, any
Bank shall obtain on account of the Loans made by it any
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payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share of payments on account
of the Loans obtained by all the Banks, such Bank shall forthwith (x) notify
the Documentation Agent of such fact, and (y) purchase from the other Banks
such participations in the Loans made by them as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid thereto together with an amount equal to such paying Bank's
Pro Rata Share (according to the proportion of (i) the amount of such paying
Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
Purchasing Bank in respect of the total amount so recovered. The Documentation
Agent will keep records (which shall be conclusive and binding in the absence
of manifest error) , of participations purchased pursuant to this Section
2.20(a) and will in each case notify the Banks and the Borrowers following any
such purchases.
(b) Each Borrower agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.20 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 9.7) with respect to such
participation as fully as if such Bank were the direct creditor of such
Borrower in the amount of such participation.
(c) Nothing herein shall require any Bank to exercise any right of
set-off or similar rights or shall affect the right of any Bank to exercise,
and retain the benefits of exercising any such right with respect to any other
indebtedness or obligation of any Borrower.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.
(a) All payments of principal of and interest on the Loans (other
than Reference Rate Loans) shall be made by the applicable Borrower(s) without
set-off or counterclaim for or on account of, and free and clear of, and
without deduction or withholding for, or on account of, any Taxes. In
addition, the Borrowers shall pay all Other Taxes.
(b) Each Borrower agrees to indemnify and hold harmless each Bank
and the Documentation Agent for the full amount of Taxes or
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Other Taxes imposed by any jurisdiction on amounts payable under this Section
3.1 paid by such Bank or the Documentation Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within
thirty (30) days after the date any Bank or the Documentation Agent makes
written demand therefor.
(c) If any Borrower shall be required by law to deduct or withhold
any Taxes or Other Taxes from or in respect of any sum payable hereunder to any
Bank or the Documentation Agent, then:
(i) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable
under this Section 3.1) such Bank or the Documentation Agent, as the
case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made;
(ii) such Borrower shall make such deductions and
withholdings;
(iii) such Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) such Borrower shall also pay to each Bank or the
Documentation Agent for the account of such Bank or the Documentation
Agent, at the time interest is paid, all additional amounts which the
respective Bank or the Documentation Agent specifies as necessary to
preserve the after-tax yield such Bank or the Documentation Agent
would have received if such Taxes or Other Taxes had not been imposed.
(d) Within thirty (30) days after its receipt thereof, such
Borrower shall furnish the Documentation Agent the original or a certified
copy of a receipt evidencing payment of such Taxes or Other Taxes, or other
evidence of payment satisfactory to the Documentation Agent.
(e) Each Bank which is a foreign person (i.e., a person other than
a United States person for United States Federal income tax purposes) agrees
that it will comply with the requirements of Section 2.17 hereof and further
agrees that if such Bank claims or is entitled to claim exemption from
withholding tax under a United States tax treaty by providing a Form 1001 and
such Bank sells or grants a participation of all or part of its rights under
this Agreement, such Bank shall notify the Documentation Agent of the
percentage amount in which it is no longer the beneficial owner
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under this Agreement. To the extent of this percentage amount, each Borrower
or the Documentation Agent shall treat such Bank's Form 1001 as no longer in
compliance with this Section 3.1(e). In the event a Bank claiming exemption
from United States withholding tax by filing Form 4224 with the Borrowers or
the Documentation Agent sells or grants a participation in its rights under
this Agreement, such Bank agrees to undertake sole responsibility for complying
with the withholding tax requirements imposed by Sections 1441 and 1442 of the
Code.
(f) Notwithstanding anything herein to the contrary, no Borrower
will be required to pay any additional amounts in respect of Taxes described
below:
(i) if such Bank shall have delivered to the Borrowers
and the Documentation Agent a Form 4224 or a Form 1001 in respect of
its Lending Office and such Bank shall not at any time be entitled to
exemption from deduction or withholding of United States Federal
income tax in respect of payments by such Borrower hereunder for the
account of such Lending Office for any reason other than a change in
United States law or regulations or in the official interpretation of
such law or regulations by any governmental authority charged with the
interpretation or administration thereof (whether or not having the
force of law) after the date of delivery of such Form 4224 or Form
1001, as applicable;
(ii) taxes that are imposed as a result of any sale,
assignment, transfer or other disposition (whether voluntary or
involuntary) by such Bank of any interest in such Bank's Commitment,
Loans or the Loan Documents, unless such sale, assignment, transfer or
disposition by such Bank takes place while a Borrower Event of Default
or Guarantor Event of Default has occurred and is continuing or
pursuant to Section 3.3(c);
(iii) taxes to the extent resulting from (A) the gross
negligence, fraud or willful misconduct of a Bank or the Documentation
Agent, (B) any act or omission of a Bank or the Documentation Agent
that is in violation of any of the terms of the Loan Documents, or (C)
the inaccuracy or breach of any representation, warranty or covenant
by a Bank or the Documentation Agent in any document required to be
furnished thereby.
(g) If any Borrower is required to pay additional amounts to any
Bank pursuant to this Section 3.1, then such Bank shall use its reasonable best
efforts (consistent with legal and regulatory restrictions) to change the
jurisdiction of its Lending Office so as to eliminate any such additional
payment by such Borrower which may thereafter accrue if such change in the
judgment of such Bank is not otherwise materially disadvantageous to such
Bank.
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(h) If any Bank or the Documentation Agent receives a written
notification from a taxing authority of proposed taxes for which an amount may
be payable by any Borrower in accordance with this Section 3.1, such Bank or
the Documentation Agent shall notify such Borrower promptly after receipt of
such notification and shall furnish such Borrower with such related information
as such Borrower may reasonably request. If requested by any Borrower in
writing, such Bank or the Documentation Agent shall in good faith diligently
contest (including pursuing all judicial appeals as of right, if any) the
validity, applicability and amount of such Taxes or Other Taxes; provided, that
(x) prior to taking such action such Borrower shall have agreed to indemnify
such Bank or the Documentation Agent for all reasonable out of pocket costs and
expenses that such indemnitee may incur in connection with contest such claim
and (y) the amount of such claim, when aggregated with all amounts owing to
such Bank under comparable provisions of the Other Credit Facilities to which
such Bank is a party, shall exceed $5,000.
(i) Each bank receiving a receipt or other evidence of payment
pursuant to Section 3.1(d) shall reimburse the applicable Borrower for the
amount of any credit or other economic benefit available to such Bank by reason
or on account of such payment by such Borrower or such Bank's possession of
such receipt or other evidence of payment under any tax, levy, impost, duty,
fee, assessment or other charge of any nature imposed by any Governmental
Authority applicable to such Bank. The amount of such reimbursement calculated
by such Bank shall be conclusive and binding absent manifest error in
computation.
3.2 Inability to Determine Rates. If and to the extent that
market or other conditions existing in the domestic money market relevant to CD
Rate Loans or in the London inter-bank market relevant to LIBOR Loans make it
impossible or impracticable for the Banks to make such Loans, then the
obligations of the Banks to make CD Rate Loans or LIBOR Loans, as applicable,
and the right of any Borrower to originate, continue or convert any Loan as or
to a CD Rate Loan or a LIBOR Loan shall be suspended until the circumstances
giving rise to such suspension shall no longer exist.
Upon receipt from the Documentation Agent of a notice of the Banks'
inability to make, convert or continue the requested Loan due to any of the
reasons referred to above, notwithstanding anything in this Agreement to the
contrary, any Borrower may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If such Borrower does not revoke
such notice relating to a LIBOR Loan or CD Rate Loan, the Banks shall, with
respect to such LIBOR Loan or CD Rate Loan only, make or convert such Loan in
the amount specified in the applicable notice submitted by such Borrower, but
such Loan shall be made as or converted into a Reference Rate Committed Loan
instead of a LIBOR Loan or a CD Rate Loan. Except as provided in the
immediately
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preceding sentence, if, notwithstanding the provisions of this Section 3.2, any
Bank has made available to any Borrower its Commitment Percentage of any such
proposed Loan, then such Borrower shall immediately repay the amount so made
available to it by such Bank, together with accrued interest thereon, if any.
3.3 Increased Costs; Capital Adequacy.
(a) If, after the Closing Date, a Bank shall reasonably determine
that any change in applicable laws, rules or regulations or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law):
(i) shall change the basis of taxation to such Bank of
any amounts payable by any Borrower under this Agreement (other than
taxes imposed on or measured by the overall income of such Bank in the
jurisdiction in which such Bank has its principal office), or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, such Bank with
respect to this Agreement or any Note, or
(iii) shall impose any other condition with respect to this
Agreement or any Note,
and the result of any of the foregoing is to increase the cost to such Bank or
to reduce the amount of any sum receivable by such Bank with respect to making
or maintaining any CD Rate Loan or LIBOR Loan by an amount reasonably deemed by
such Bank to be material, then such Borrower shall from time to time, upon
written demand by such Bank, pay to such Bank additional amounts sufficient to
compensate such Bank for any such increased cost or reduced sum receivable to
the extent resulting from outstanding CD Rate Loans or LIBOR Loans and not
compensated in connection with the computation of the CD Rate or LIBOR (as
applicable).
(b) If any Bank shall have determined that (i) the introduction of
any Capital Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by such Bank (or
its Lending Office) with any such change in Capital Adequacy Regulations,
affects or would affect the amount of capital required or expected to be
maintained by such Bank and (taking into consideration such Bank's policies
with respect to capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased by an amount deemed
material by such Bank as a consequence of its Commitment, Loans (other than
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Reference Rate Loans) or other obligations under this Agreement, then, upon
demand of such Bank to such Borrower through the Agent, such Borrower shall pay
to such Bank, from time to time as specified by such Bank, additional amounts
sufficient to compensate for such increase.
(c) Upon receipt of notice from any Bank of a claim for
compensation under this Section 3.3, the applicable Borrower(s) shall be
afforded ninety (90) days to find a replacement financial institution
reasonably acceptable to the Documentation Agent and, if an acceptable
replacement financial institution is available such replacement institution
will purchase such Bank's Loans and Commitment and other interests under the
Loan Documents in accordance with Section 9.9 or such Bank will withdraw such
request for payment.
(d) A detailed statement as to the amount of such increased cost
or reduced sum receivable, along with documentation supporting the payment of
such amount under this subsection, shall be prepared by such Bank and submitted
to the applicable Borrower(s) (with a copy to the Documentation Agent) with
such Bank's written demand. Such Bank's statement of such increased cost or
reduced sum receivable shall be prima facie evidence of such increased cost or
reduced sum absent manifest error.
3.4 Illegality. If any Bank shall determine that, after the date
hereof, (i) the introduction of any Requirement of Law or any change in or in
the interpretation or administration thereof has made it unlawful, or (ii) any
central bank or other Governmental Authority has asserted that it is unlawful,
for such Bank or its Lending Office to make any Loan of the Type requested by a
Borrower, then, on notice thereof by such Bank to the applicable Borrower(s)
through the Documentation Agent, the obligation of such Bank to make any such
Loans shall be suspended until such Bank shall have notified the Documentation
Agent and such Borrower(s) that the circumstances giving rise to such
determination no longer exists.
If a Bank shall determine that it is unlawful to maintain any Loan
then outstanding, then, on notice thereof by such Bank to the applicable
Borrower(s) through the Documentation Agent, such Borrowers shall prepay in
full all such Loans of such Bank then outstanding, together with interest
accrued thereon, either on the last day of the Interest Period thereof if such
Bank may lawfully continue to maintain such Loans to such day, or immediately,
if such Bank may not lawfully continue to maintain such Loans.
If any Borrower is required to prepay any LIBOR Loan or CD Rate Loan
as provided in the preceding paragraph of this Section 3.4, then
concurrently with such prepayment, such Borrower shall borrow from the affected
Bank, in the amount of such repayment, a Reference Rate Loan.
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3.5 Funding Losses. Each Borrower agrees to reimburse each Bank
and to hold each Bank harmless from any loss, cost or expense which such Bank
may sustain or incur as a consequence of:
(a) any failure by such Borrower to borrow, or to
continue or convert a Loan (other than a Reference Rate Loan) after it
has given (or is deemed to have given) a Notice of Borrowing or a
Notice of Conversion/Continuation, as the case may be;
(b) any payment by it of a LIBOR Loan or a CD Rate Loan
on a day which is not the last day of the Interest Period with respect
thereto; or
(c) the conversion of a LIBOR Loan or a CD Rate Loan to a
Reference Rate Loan on a day that is not the last day of the
respective Interest Period;
by paying to each Bank, on demand by such Bank, an additional amount equal to
the amount of any interest which such Bank would have earned for the remainder
of the Interest Period in question reduced by the amount of income earned by
such Bank during such Interest Period with respect to the amount prepaid or not
borrowed (the "Loss"). A detailed statement as to the amount of such Loss,
prepared by the Bank incurring the same, shall be prima facie evidence of such
Loss absent manifest error.
3.6 Survival. The agreements and obligations of each Borrower in
this Article III shall survive the payment of all of such Borrower's Loan
Obligations.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of the Non-Kmart
Borrowers. Each Non-Kmart Borrower represents and warrants to the
Documentation Agent and to each Bank with respect to itself and its partners
or joint venturers, as follows:
(a) Organization, Standing, etc. Such Non-Kmart Borrower
is a corporation or partnership duly organized, validly existing and in good
standing under the laws of the state of its organization. Such Non-Kmart
Borrower has all requisite corporate or partnership power and authority to own
and operate the Projects which are the subject of Loans made to such Borrower
hereunder and to execute, deliver and perform its obligations under each of the
Loan Documents to which it is a party and all other agreements and instruments
executed and delivered by it pursuant to or in connection with any Loan
Document to which it is a party.
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(b) Organizational Documents. A complete and correct copy of each
of the Organizational Documents of such Non-Kmart Borrower in effect on the
date of such Borrower's initial Borrowing has been delivered to the
Documentation Agent.
(c) Conflicting Agreements and Other Matters. The execution,
delivery and performance by such Non-Kmart Borrower of each of the Loan
Documents to which it is a party and all other agreements and instruments to be
executed and delivered by such Borrower pursuant thereto or in connection
herewith or therewith do not and will not:
(i) violate any provisions of any law, rule, regulation,
order, writ, judgment, decree, determination or award presently
in effect having applicability to such Borrower;
(ii) conflict with or result in a breach of or constitute
a tortious interference with or constitute a default under the
Organizational Documents of such Borrower or any indenture or loan or
credit agreement, or any other agreement or instrument, to which such
Borrower is a party or by which such Borrower or any of its properties
may be bound or affected, or any governmental permit, license or
order;
(iii) result in (except for Permitted Liens) or require the
creation or imposition of any Lien of any nature upon or with respect
to any of the properties now owned or hereafter acquired by such
Borrower; or
(iv) require any approval or consent of any Person, except
for such approvals or consents which will have been obtained before
the date hereof.
Such Non-Kmart Borrower is not in default under or in violation of any such
law, rule, regulation, license, order, permit, writ, judgment, decree,
determination, award, indenture, agreement or instrument described above or
under its organizational documents the consequences of which default or
violation would materially and adversely affect the condition (financial or
otherwise), properties, business, prospects or results of operations of such
Borrower.
(d) Due Execution, etc. The execution, delivery and performance
of each of the Loan Documents to which such Non-Kmart Borrower is a party and
the consummation of the transactions on its part contemplated thereby, have
been duly authorized by all necessary corporate or partnership proceedings and
no other proceedings on the part of such Borrower are necessary to authorize
each of the Loan Documents to which such Borrower is a party. Each of the Loan
Documents to which it is a party and each other agreement or instrument
executed and delivered by such Borrower pursuant hereto or thereto or in
connection herewith or therewith has been duly executed and delivered by such
Borrower and
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constitutes or will constitute a legal, valid and binding obligation of such
Borrower, enforceable against such Borrower in accordance with its respective
terms (subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other similar laws affecting the enforcement of creditors, rights
generally and general equitable principles which may limit the right to obtain
the remedy of specific performance of executory covenants and other equitable
remedies). Each of the Loan Documents to which such Borrower is a party is in
full force and effect and no term or condition thereof has been amended,
modified or waived from the terms and conditions of the Loan Documents
delivered to the Documentation Agent pursuant to Section 6.1 or 6.2 hereof
without the prior written consent of the Required Banks or all the Banks, as
applicable, and such Borrower has performed and complied in all material
respects with all the terms, provisions, agreements and conditions set forth
therein and required to be performed or complied with by such parties on or
before the Borrowing Date, and no default by such Borrower or any of the other
parties thereto exists thereunder.
(e) Title to and Condition of Properties. Such Non-Kmart Borrower
is the owner of fee simple title to each Project, or, with respect to the real
estate on which a Project is located, the lessee under a valid ground lease
having an unexpired term of not less than twenty-five (25) years, which is the
subject of any Loans hereunder, subject only to Permitted Liens, rights of
Kmart Corporation under the related APUC and as lessee under the related
lease(s) of such Project(s) and rights of existing lenders in respect of such
Project(s) securing indebtedness owed to such lenders.
(f) Litigation, Proceedings, Licenses, Permits; etc.
There are no actions, suits, proceedings or investigations pending or, to the
knowledge of such Non-Kmart Borrower after due inquiry, threatened against or
affecting it or any of its Subsidiaries or any of its or their respective
properties before any court, governmental agency or regulatory authority
(foreign, Federal, state or local), which, if determined adversely to such
Borrower or any of its Subsidiaries, (i) would enjoin or otherwise materially
interfere with any Project or the transactions contemplated by the Loan
Documents, or (ii) would (individually or in the aggregate) materially impair
such Borrower's or any of its Subsidiaries' ability to perform fully any
obligations on a timely basis which any of them has under or in connection with
any Loan Document. Neither such Borrower nor any of its Subsidiaries, (i) is
in default with respect to any order of any court, arbitrator or governmental
body or is subject to or party to any order of any court or governmental
authority arising out of any action, suit or proceeding against it under any
statute or other law respecting antitrust, monopoly, restraint of trade, unfair
competition or similar matters, or (ii) has violated or is in violation of any
statute, rule or regulation of any governmental authority in each
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case where such violation or default would materially and adversely affect any
Project or the transactions contemplated by the Loan Documents. Such Borrower
and each of its Subsidiaries have been and are current and in good standing
with respect to all governmental approvals, permits, certificates, licenses,
inspections, consents and franchises necessary to continue to own or lease and
operate any Project.
(g) Governmental Consents, etc. Except as already received by such
Non-Kmart Borrower as of the date hereof, no authorization, consent, approval,
license, qualification or formal exemption from, nor any filing, declaration or
registration with, any court, governmental agency or regulatory authority or
any securities exchange or any other Person is required in connection with
the execution, delivery and performance by such Borrower of this Agreement or
any Loan Document to which it is or is to be a party.
(h) Governmental Regulation. Neither such Non-Kmart Borrower nor any
of its respective Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, the Investment Company Act of 1940 or any other federal or state
statute or regulation such that its ability to incur indebtedness is limited or
its ability to consummate the transactions contemplated hereby is materially
impaired.
(i) Federal Reserve Regulations. Neither such Non-Kmart Borrower nor
any of its respective Subsidiaries is engaged, directly or indirectly,
principally, or as one of its important activities, in the business of
extending, or arranging for the extension of, credit for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation G, T,
U or X of the Board.
(j) Disclosure. The Loan Documents and any other document,
certificate or statement furnished or to be furnished to the Documentation
Agent or any Bank by or on behalf of such Non-Kmart Borrower or any of its
Subsidiaries in connection herewith or therewith do not and will not contain
any untrue statement of a material fact and do not and will not omit to state a
material fact necessary in order to make statements made by such Non-Kmart
Borrower or any of its Subsidiaries contained herein and therein not misleading
in light of the circumstances in which made.
(k) Solvency. Such Non-Kmart Borrower is Solvent and will continue
to be Solvent after giving effect to the transactions contemplated by the Loan
Documents to be executed by it.
(l) Survival of Warranties. All representations and warranties of
such Non-Kmart Borrower contained in this Agreement shall survive the execution
and delivery of this Agreement and the termination hereof. Any modifications
or supplements to the
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disclosures contained in this Agreement and provided by such Non-Kmart Borrower
after the date hereof shall not be deemed a part of the Agreement until
accepted in writing by the Banks or the Required Banks, as applicable.
Section 4.2 Representations and Warranties of the Kmart Borrower. The
Kmart Borrower represents and warrants to the Documentation Agent and to each
Bank with respect to itself, as follows:
(a) Organization and Good Standing. The Kmart Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and is duly qualified to do
business and is in good standing in each additional jurisdiction where failure
to so qualify would have an effect which, when taken together with the
simultaneous effect of failure to qualify in any other jurisdictions, would in
the aggregate have a Material Adverse Effect.
(b) Authorization; No Contravention. The execution, delivery and
performance of this Agreement and the issuance of the Notes by the Kmart
Borrower are within its corporate powers, have been duly authorized by all
necessary corporate action, and are not in contravention of any Requirement of
Law or of the terms of the Kmart Borrower's Articles of Incorporation or
by-laws, or of any agreement, undertaking, contract or other obligation to
which the Kmart Borrower is a party or by which it is bound.
(c) Consents and Approvals. No consent, waiver, approval,
notification of, or registration or filing with, any Governmental Authority or
any non-governmental Person is required in connection with the execution and
delivery by the Kmart Borrower of this Agreement or the Notes or the borrowing
by the Kmart Borrower hereunder or in connection with the consummation of any
transaction contemplated hereby, except those disclosed in Schedule 4.2(c) and
which the Kmart Borrower has obtained or made.
(d) Binding Effect. This Agreement is, and each Note when issued
will be, valid, binding and enforceable against the Kmart Borrower in
accordance with the terms thereof (subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting the enforcement of creditors' rights and general
equitable principles which may limit the right to obtain the remedy of specific
performance of executory covenants and other equitable remedies).
(e) Litigation. No litigation or governmental proceeding is pending
or, to the knowledge of the Kmart Borrower, threatened, against the Kmart
Borrower for which sufficient provision has not been made in the financial
statements of the Kmart Borrower and which could have a material adverse effect
on the Kmart Borrower's
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condition or business, financial or otherwise, or which purport to affect or
pertain to this Agreement or any of the transactions contemplated hereby.
(f) Financial Statements. The balance sheet as of January 26, 1994
and the related statements of income and stockholders' equity and cash flows,
of the Kmart Borrower and its Subsidiaries contained in the most recent annual
report of the Kmart Borrower to its stockholders have been audited and
certified by Price Waterhouse, independent certified public accountants, and
are complete and accurate in all material respects and present fairly the
financial condition of the Kmart Borrower and its Subsidiaries as of the dates
of such statements and the results of their operations for the periods covered
thereby, in accordance with GAAP, consistently applied. The balance sheet as
of July 27, 1994 and the related statements of income, stockholders' equity and
cash flows, of the Kmart Borrower and its Subsidiaries contained in the most
recent quarterly report of the Kmart Borrower filed with the U.S. Securities
and Exchange Commission (the "SEC") on Form 10-Q are complete and accurate
in all material respects and present fairly the financial condition of the
Kmart Borrower and its Subsidiaries as of the dates of such statements and the
results of their operations for the periods covered thereby, in accordance with
GAAP, consistently applied.
(g) Use of Proceeds; Margin Regulations. After applying the proceeds
of any borrowings hereunder, not more than 25% of the value of the assets of
the Kmart Borrower and its Subsidiaries will consist of "margin stock" as such
term is defined in Regulation G, T, U or X of the Federal Reserve Board. The
Kmart Borrower is not generally engaged in the business of purchasing or
selling margin stock or extending credit for the purpose of purchasing or
carrying margin stock.
(h) No Default. No Unmatured Guarantor Event of Default or Guarantor
Event of Default exists or would result from the incurring of any Obligations
by it.
(i) Taxes. The Kmart Borrower has filed all Federal and other
material tax returns and reports required to be filed, and has paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed up it or its properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against the Kmart Borrower that
could, if made, have a Material Adverse Effect.
(j) Insurance. The properties and business of the Kmart Borrower are
insured in such amounts, with such deductibles and covering such risks as are
customarily carried by similar companies
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of comparable size engaged in similar businesses and owning or operating
similar properties in localities where the Kmart Borrower operates.
(k) Compliance With Laws. The Kmart Borrower is in compliance with
all applicable laws, rules and regulation (including environmental laws, rules
and regulations and the Employee Retirement Income Security Act of 1976, as
amended, and all regulations thereunder) except where the failure to be in such
compliance could not reasonably be expected to have a Material Adverse Effect.
Section 4.3 Representations and Warranties of the Bridge Borrowers.
Each Bridge Borrower represents and warrants to the Documentation Agent and to
each Bank with respect to itself and not with respect to the other Bridge
Borrowers that, as of the date of this Agreement, no "Event of Default" or
"Unmatured Event of Default" (as such terms are defined in the respective
Bridge Agreements) exists under the Bridge Note or the Bridge Agreement to
which such Bridge Borrower is a party.
ARTICLE V
COVENANTS
Section 5.1 Affirmative Covenants of each Non-Kmart Borrower. Each
Non-Kmart Borrower covenants and agrees that, so long as any Bank shall have
any Commitment hereunder, or any Loan or other Obligation shall remain unpaid
or unsatisfied, such Non-Kmart Borrower will:
(a) Furnish to Kmart Corporation, and to the Documentation Agent, for
distribution to each Bank:
(i ) Within three (3) days after such Borrower shall have
obtained knowledge of the occurrence of a Borrower Event of Default
with respect to itself or of a Guarantor Event of Default, the written
statement of a Responsible Officer of such Borrower setting forth the
details of each such Event of Default which has occurred and is
continuing and the action which such Borrower proposes to take with
respect thereto.
(ii) Copies of any annual or interim financial statements
required to be provided by such Borrower to its equity holders or
partners by law or under its Organizational Documents, or to the
Guarantor under any agreements between such Borrower and the
Guarantor, as and when the same are provided to such equity holders or
partners or the Guarantor.
(iii) Unless waived by the Guarantor, promptly following such
Borrower's receipt thereof, copies of all financial or
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other reports or statements submitted to such Borrower by independent
public accountants relating to any annual or interim audit of the
books of such Borrower.
(iv) Promptly upon obtaining knowledge thereof, notice of any
action, suit, proceeding or investigation pending or threatened
against or affecting such Borrower or any of its properties before any
court, governmental agency or regulatory authority (foreign, Federal,
state or local), which, if determined adversely to such Borrower could
materially impair such Borrower's ability to perform its obligations
under the Loan Documents to which it is a party or could have a
material adverse effect on any of its Projects.
(v) Such other information respecting the properties,
business affairs, financial condition and/or operations of such
Borrower as the Documentation Agent or any Bank may from time to time
reasonably request.
(b) Preserve and maintain its corporate or partnership (as
applicable) existence.
(c) Comply with all laws, rules, regulations and governmental orders
(foreign, Federal, state and local) having applicability to it or to the
business or businesses at any time conducted by it, where the failure to so
comply could materially impair such Non-Kmart Borrower's ability to perform its
obligations under the Loan Documents to which it is a party or could have a
material adverse effect on any of its Projects.
(d) Duly and punctually pay and perform its obligations under
the Loan Documents in accordance with the terms thereof.
(e) Permit the Documentation Agent or its representatives, at any
reasonable time, and from time to time upon written notice and with the consent
of the Guarantor, to visit and inspect any Project of such Non-Kmart Borrower,
to examine and make copies of and take abstracts from its records and books of
account, and to discuss its finances and accounts with its principal officers
and, with the written consent of such Borrower, its independent public
accountants and other agents.
(f) Keep, or cause to be kept, adequate records and books of account.
(g) Use the proceeds of the Loans only for the purposes specified in
the introduction to this Agreement.
(h) Maintain or cause to be maintained each of its Projects in good
repair, working order and condition, excepting ordinary wear and tear and
damage due to casualty or condemnation, and make
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or cause to be made all appropriate repairs, renewals and replacements thereof,
consistent with past practice.
(i) Maintain in full force and effect all licenses, permits,
governmental approvals, franchises, authorizations or other rights necessary
for the operation of each of its Projects; and notify the Documentation Agent
in writing, promptly after learning thereof, of the suspension, cancellation,
revocation or discontinuance of or of any pending or threatened action or
proceeding seeking to suspend, cancel, revoke or discontinue any such license,
permit, governmental approval, franchise authorization or right.
(j) Notify the Documentation Agent, in writing, promptly, and in any
event within twenty (20) days after such Non-Kmart Borrower's learning thereof,
of any:
(i) notice or claim to the effect that such Borrower is or
may be liable to any Person as a result of the Release or threatened
Release of any Contaminant into the environment;
(ii) notice that such Borrower is subject to investigation by
any governmental authority evaluating whether any Remedial Action is
needed to respond to the Release or threatened Release of any
Contaminant into the environment;
(iii) notice that any property of such Borrower or any of its
Projects is subject to an Environmental Lien;
(iv) notice of violation to such Borrower or awareness by
such Borrower of a condition which might reasonably result in a notice
of violation of any environmental, health or safety requirement under
federal, state or local laws, which could materially impair such
Borrower's ability to perform its obligations under the Loan Documents
or could have a material adverse effect on any of its Projects;
(v) commencement or threat of, any judicial or administrative
proceeding alleging a violation of any environmental, health or safety
requirement under federal, state or local laws;
(vi) new or proposed changes to any existing environmental,
health or safety requirement under federal, state or local laws that
could materially impair such Borrower's ability to perform its
obligations under the Loan Documents or could have a material adverse
effect on any of its Projects; or
(vii) any proposed action by such Borrower that could
subject such Borrower to environmental, health or safety liabilities,
obligations or costs that could materially impair such Borrower's
ability to perform its obligations under the
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Loan Documents or could have a material adverse effect on any of its
Projects.
Section 5.2 Negative Covenants of each Non-Kmart Borrower. Each
Non-Kmart Borrower hereby covenants and agrees that, so long as any Bank shall
have any Commitment hereunder, or any Loan or other Obligation shall remain
unpaid or unsatisfied, such Non-Kmart Borrower will not nor will it permit any
of its subsidiaries to:
(a) Except for Permitted Liens: (i) Create, incur, assume or permit
to exist any Lien on any of its Projects; or (ii) enter into or assume any
other agreement containing a negative pledge with respect to its property that
would prohibit such Non-Kmart Borrower from granting any Permitted Mortgage
Lien or any Permitted Third Party Mortgage Lien on any of its Projects.
(b) After the occurrence and during the continuance of a Borrower
Event of Default with respect to such Non-Kmart Borrower (unless waived by the
Guarantor) or a Guarantor Event of Default, declare or pay any dividend
distribution, or purchase or redeem any shares of any equity interest or class
of capital stock of such Borrower, or make any other payment or distribution on
or in respect of any class of capital stock or ownership interest of such
Borrower or set aside any amounts for any such purposes.
(c) Merge or consolidate with or into any Person unless
waived by the Guarantor.
(d) Modify or amend any of such Non-Kmart Borrower's Organizational
Documents unless waived by the Guarantor.
Section 5.3 Affirmative Covenants of the Kmart Borrower. The Kmart
Borrower covenants and agrees that, so long as any Bank shall have any
Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied:
(a) Payment of Taxes. The Kmart Borrower will pay, when due, all
taxes assessed against the Kmart Borrower or its property and all other claims
which may become a Lien upon any of its property, except to the extent that (a)
the same are being contested in good faith by appropriate proceedings, and (b)
adequate reserves for payment thereof have been established in accordance with
GAAP.
(b) Insurance. The Kmart Borrower will maintain insurance with
respect to its properties and business in such amounts, with such deductibles
and covering such risks as are customarily carried by similar companies of
comparable size engaged in similar businesses and owning or operating similar
properties in localities where the Kmart Borrower operates.
(c) Preservation of Corporate Existence, Etc. The Kmart Borrower
shall:
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(i) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation; and
(ii) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its
business, except in connection with transactions permitted by Section
5.4(a) and dispositions of assets permitted by Section 5.4(b).
(d) Maintenance of Property. The Kmart Borrower shall maintain and
preserve all its property which is used or useful in its business in good
working order and condition, ordinary wear and tear excepted and make all
necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect, and except as permitted by Section 5.4(b).
(e) Compliance with Laws. The Kmart Borrower shall comply in all
material respects with all Requirements of Law of any Governmental Authority
having jurisdiction over it or its business, except such as may be contested in
good faith or as to which a bona fide dispute may exist.
(f) Books and Records; Other Information. The Kmart Borrower shall
maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Kmart Borrower, and will provide to the Documentation Agent and the Banks such
other information as they may reasonably request and which is reasonably
available to the Kmart Borrower or can be reasonably computed from the Kmart
Borrower's books and records.
(g) Financial Information. The Kmart Borrower shall deliver to the
Documentation Agent for distribution to the Banks (and, if requested, with
sufficient copies for each Bank):
(i) within sixty (60) days after the end of each of the first
three (3) fiscal quarters of the Kmart Borrower, copies of (1) the
consolidated balance sheet of the Kmart Borrower and its Subsidiaries
as of the end of such quarter, (2) the consolidated statement of
income of the Kmart Borrower and its Subsidiaries for such quarter and
for the period from the end of the most recent fiscal year of the
Kmart Borrower through the end of such quarter, (3) the consolidated
statement of cash flows of the Kmart Borrower and its Subsidiaries for
the period from the end of the most recent fiscal year of the Kmart
Borrower through the end of such quarter, all prepared in accordance
with GAAP and certified by a Responsible Officer
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as being a fair statement of results for the periods covered thereby,
subject to ordinary year-end audit adjustments;
(ii) concurrently with the delivery of the financial
statements referred to in Sections 5.3(g)(i) and (iii), a
certificate duly completed and executed by a Responsible Officer, as
to compliance by the Kmart Borrower with the covenants contained in
Sections 5.4(d) and 5.4(e) hereof, and stating that no Unmatured
Guarantor Event of Default or Guarantor Event of Default then exists
(or, if any should then exist, identifying the same and stating any
actions being taken by the Kmart Borrower with respect thereto);
(iii) within one hundred twenty (120) days after the end of
each fiscal year of the Kmart Borrower, copies of (1) the consolidated
balance sheet of the Kmart Borrower and its Subsidiaries as at the end
of such fiscal year, (2) the consolidated statement of income of the
Kmart Borrower and its Subsidiaries for such fiscal year, and (3) the
consolidated statement of cash flows of the Kmart Borrower and its
Subsidiaries for such fiscal year, setting forth in each case in
comparative form the corresponding figures for the previous fiscal
year, all in reasonable detail and prepared in accordance with GAAP
and certified by a nationally recognized independent public accounting
firm; and
(iv) promptly, copies of all financial statements and reports
that the Kmart Borrower sends to its shareholders and copies of all
Forms 10K, 1OQ and 8K that the Kmart Borrower files with the SEC.
(e) Notices.
(i) The Kmart Borrower shall notify each Bank promptly, but
not later than three (3) Business Days after the Kmart Borrower
becomes aware thereof, of the occurrence of any Guarantor Event or
Default.
(ii) The Kmart Borrower shall notify the Documentation Agent
for distribution to the Banks promptly, but not later than three (3)
Business Days after the Kmart Borrower becomes aware thereof, of the
occurrence of:
(A) any Unmatured Guarantor Event of Default;
(B) any Material Adverse Effect or any event or other
development which could have a Material Adverse Effect;
(C) any change in the Debt Rating by Xxxxx'x or S&P; or
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(D) any Reportable Event.
Section 5.4 Negative Covenants of the Kmart Borrower. The Kmart
Borrower hereby covenants and agrees that, so long as any Bank shall have any
Commitment hereunder, or any Loan or other Obligation shall remain unpaid or
unsatisfied:
(a) Consolidations and Mergers. The Kmart Borrower shall not
merge or consolidate with any other Person, unless:
(i) the successor formed by or resulting from such
consolidation or merger is the Kmart Borrower or a Subsidiary of the
Kmart Borrower and, if the survivor is a Subsidiary of the Kmart
Borrower, such Subsidiary shall affirm the Kmart Borrower's
Obligations under the Loan Documents in writing; and
(ii)no Unmatured Guarantor Event of Default or Guarantor Event
of Default shall have occurred and then be continuing or would arise
after giving effect thereto.
(b) Dispositions of Assets. The Kmart Borrower shall not, directly
or indirectly, sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one or a series of transactions) any property (including accounts
and notes receivable, with or without recourse) or enter into any agreement to
do any of the foregoing, except:
(i) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
(ii) the sale of equipment to the extent that such equipment
is exchanged for credit against the purchase price of similar
replacement equipment, or the proceeds of such sale are reasonably
promptly applied to the purchase price of such replacement equipment;
(iii) dispositions of inventory or equipment by the Kmart
Borrower to any Subsidiary pursuant to reasonable business
requirements; and
(iv) other dispositions of assets having, in any fiscal year
of the Kmart Borrower, an aggregate book value not exceeding 10% of
the Kmart Borrower's consolidated total assets as of the end of the
most recently ended fiscal year of the Kmart Borrower, as reflected in
the Kmart Borrower's balance sheet contained in its audited financial
statements for such fiscal year;
provided, however, that this Section 5.4(b) shall not be deemed to prohibit the
sale of all, substantially all, or a part of the capital stock or of all,
substantially all, or a part of the assets
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of any Specialty Retail Subsidiary of the Kmart Borrower, even if such an
entity is no longer a Subsidiary of the Kmart Borrower, if (x) consideration
received is fair market value (as determined by the Kmart Borrower), or (y)
the Kmart Borrower's board of directors deems such transaction to be necessary
by reason of applicable laws, regulations or governmental policies applicable
to the Kmart Borrower.
(c) Limitation on Liens. The Kmart Borrower shall not incur any
Indebtedness which is secured by a Lien on any assets of the Kmart Borrower,
whether now owned or hereafter acquired, unless concurrently with creation of
any such Lien securing Indebtedness in an aggregate amount of $50,000,000 or
more, the Kmart Borrower shall cause the Obligations and its obligations under
the Other Credit Facilities to be equally and ratably secured by the same
assets, provided, however, that such restriction shall not apply with respect
to any of the following types of Liens:
(i) Liens for taxes not delinquent or being contested in
good faith;
(ii) Liens created in connection with workers' compensation,
unemployment insurance and other social security legislation, or to
secure the performance of bids, tenders, contracts (other than for the
repayment of borrowed money), statutory obligations, surety and appeal
bonds and other similar obligations incurred in the ordinary course;
(iii) purchase money mortgages (including vendors' rights under
purchase or land contracts or under other agreements whereby title or
other interest is retained by the vendor for the purpose of securing the
purchase price thereof) on property acquired or constructed after the
Closing Date, or the acquisition after the Closing Date of property
subject to such a Lien which is limited to such property and was not
created in anticipation of such acquisition;
(iv) mortgages on real property which is the sole security for
Indebtedness the amount of which does not exceed the greater of the cost
of such property and improvements or the fair market value thereof;
(v) mortgages, security interests and Liens on assets of the
Kmart Borrower existing on the Closing Date and set forth in Schedule
5.4(c), or any refundings or extensions for an amount not exceeding the
principal amount of such Indebtedness and applying only to the same
property or assets; and
(vi) mortgages, security interests and Liens in connection with
indebtedness under industrial revenue bond financings or similar
government agency supported financings.
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(x) XXXXXXX Coverage Ratio. The Kmart Borrower shall not permit its
ratio of
(i) EBITDAR (measured as of the end of any fiscal quarter
ending after the Closing Date for the four fiscal quarters then ended)
to
(ii) the sum of (1) consolidated net interest expense for such
four fiscal quarter period plus (2) consolidated Rent Expense for such
four fiscal quarter period
to be less than 1.50 to 1.00.
(e) Consolidated Net Worth. The Kmart Borrower shall not permit its
Consolidated Net Worth at any time to be less than Four Billion Five Hundred
Million Dollars ($4,500,000,000).
ARTICLE VI
CONDITIONS OF CREDIT
Section 6.1 Conditions Precedent to Occurrence of the Closing Date and
Effectiveness of Agreement. The occurrence of the Closing Date and the
binding effect of this Agreement on each Bank are subject to the condition
that the Documentation Agent shall have received all of the following, in form
and substance satisfactory to the Documentation Agent and each Bank, in
sufficient copies for each Bank:
(a) Credit Agreement and Notes. This Agreement, executed by the Kmart
Borrower, the Documentation Agent and the Banks, and any Notes evidencing
initial Loans to be made to the Kmart Borrower concurrently with the closing
executed by the Kmart Borrower;
(b) By-laws; Resolutions; Incumbency.
(i) Copies of the by-laws of the Kmart Borrower and of the
resolutions of the board of directors of the Kmart Borrower approving
and authorizing the execution, delivery and performance by the Kmart
Borrower of this Agreement and the other Loan Documents to be delivered
by it hereunder, and authorizing the borrowing of the Loans, each
certified as of the Closing Date by the Secretary or an Assistant
Secretary of the Kmart Borrower; and
(ii) A certificate of the Secretary or Assistant Secretary of
the Kmart Borrower certifying the names and true signatures of its
respective officers authorized to execute and deliver and perform, as
applicable, this Agreement and all
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other Loan Documents and notices to be executed or delivered
by it hereunder;
(c) Articles of Incorporation. A copy of the Kmart Borrower's
Articles of Incorporation as in effect on the Closing Date, including any
amendments thereto, certified by the Michigan Department of Commerce; and (ii)
good standing certificates for the Kmart Borrower from the Michigan Department
of Commerce and from the Secretaries of State of California and New York, each
dated not earlier than October 1, 1994 and not more than seven (7) days prior
to the Closing Date;
(d) Legal Opinions.
(i) an opinion of A. N. Xxxxxxx, counsel to the Kmart Borrower,
and addressed to the Documentation Agent and the Banks, dated the
Closing Date and in form and substance satisfactory to the Documentation
Agent; and
(ii) an opinion of Dickinson, Wright, Moon, Van Dusen & Xxxxxxx,
special counsel to the Kmart Borrower and addressed to the Documentation
Agent and the Banks, dated the Closing Date and in form and substance
satisfactory to the Documentation Agent.
(e) Payment of Transaction Fees and Expenses. Evidence of payment of
all costs, accrued and unpaid fees and expenses (including Attorney Costs) to
the extent then due and payable on the Closing Date;
(f) Certificate. A certificate signed by a Responsible Officer of the
Kmart Borrower, dated as of the Closing Date, stating that:
(i) the representations and warranties of the Kmart Borrower
contained in Section 4.2 are true and correct on and as of such date, as
though made on and as of such date;
(ii) no Unmatured Guarantor Event of Default or Guarantor Event
of Default exists as of the date of such certificate;
(iii) no material adverse change in the assets, liabilities,
business, operations or condition of the Kmart Borrower and its
Subsidiaries has occurred since January 26, 1994;
(iv) no default has occurred and is continuing in respect of any
Indebtedness of the Kmart Borrower and its Subsidiaries with an
aggregate principal amount in excess of $100,000,000; and
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(v) all consents and approvals required for the Kmart Borrower
to consummate the transactions contemplated by this Agreement have been
obtained or waived; and
(vi) the Existing Facilities shall have been terminated and all
Indebtedness outstanding thereunder has been satisfied;
(g) Financial Statements. The financial statements of the
Kmart Borrower referred to in Section 4.2;
(h) Other Credit Facilities. The Kmart Borrower shall have entered
into the Other Credit Facilities and the conditions to closing thereunder shall
have been satisfied.
(i) Other Documents. Such other approvals, opinions or documents as
the Documentation Agent may reasonably request.
Section 6.2 Conditions Precedent to Effectiveness of Agreement as to
any Non-Kmart Borrower. The binding effect of this Agreement on each Bank with
respect to a Non-Kmart Borrower is subject to the conditions that the Closing
Date shall have occurred and the Documentation Agent shall have received all of
the following in respect of such Non-Kmart Borrower, in form and substance
satisfactory to the Documentation Agent and each Bank, in sufficient copies for
each Bank:
(a) Loan Documents. This Agreement, executed by such Non-Kmart
Borrower, the Documentation Agent and the Banks, or an Additional Borrower
Agreement executed by such Non-Kmart Borrower, the Guarantor and the
Documentation Agent, together with Notes evidencing any Loans to be made to
such Non-Kmart Borrower, executed by such Non-Kmart Borrower and an Assignment
executed by such Non-Kmart Borrower with respect to each APUC relating to any
Project as to which a Loan is being requested;
(b) Guaranty. The Guaranty, executed by the Guarantor;
(c) Non-Kmart Borrower Organizational Documents; Resolutions;
Incumbency.
(i) Copies of the Organizational Documents for such Non-Kmart
Borrower, and each general partner of each such Non-Kmart Borrower which
is a partnership, and of the resolutions of the board of directors of
such Non-Kmart Borrower (or its general partner) approving and
authorizing the execution, delivery and performance by such Non-Kmart
Borrower of this Agreement and the other Loan Documents to be delivered
by it hereunder, and authorizing the borrowing of the Loans, each
certified as of the relevant date by the Secretary or an Assistant
Secretary of such Non-Kmart Borrower (or its general partner); and
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(ii) A certificate of the Secretary or Assistant Secretary of
such Non-Kmart Borrower (or its general partner) certifying the names
and true signatures of its respective officers authorized to execute and
deliver and perform, as applicable, this Agreement and all other Loan
Documents and notices to be executed or delivered by it hereunder;
(d) Guarantor Organizational Documents; Resolutions; Incumbency. Each
of the following items; provided, that any item described in (i), (ii) or
(iii) below shall not be required if the Guarantor states in writing to the
Documentation Agent that the same would be identical (except for the date
thereof) to the comparable delivery made by the Kmart Borrower pursuant to
Section 6.1 hereof in connection with the Closing Date:
(i) Copies of the Organizational Documents of the Guarantor,
and of the resolutions of the board of directors of the Guarantor
approving and authorizing the execution, delivery and performance by the
Guarantor of the Guaranty and all other Loan Documents to be executed
and performed by the Guarantor, each certified by the Secretary or an
Assistant Secretary of the Guarantor; and
(i) A certificate of the Secretary or Assistant Secretary of
the Guarantor certifying the names and true signatures of its respective
officers authorized to execute and deliver and perform, as applicable,
the Guaranty and all other Loan Documents and notices to be executed or
delivered by it hereunder; and
(iii) A certificate signed by a Responsible Officer of Guarantor
dated as of the relevant date, stating that:
(A) the representations and warranties of Guarantor
contained in Section 4.2 hereof are true and correct on and as of
such date, as though made on and as of such date (except to the
extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of
such earlier date); and
(B) no Unmatured Guarantor Event of Default or Guarantor
Event of Default exists or would result from the initial Borrowing
by such Non-Kmart Borrower;
(e) Legal Opinions.
(i) an opinion of A. N. Xxxxxxx, counsel to the Guarantor, and
addressed to the Documentation Agent and the Banks, dated the date of
the Guaranty and in form and substance satisfactory to the Documentation
Agent; and
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(ii) an opinion of Dickinson, Wright, Moon, Van Dusen & Xxxxxxx,
special counsel to the Guarantor and addressed to the Documentation
Agent and the Banks, dated the date of the Guaranty and in form and
substance satisfactory to the Documentation Agent; and
(iii) such opinions of counsel to such Non-Kmart Borrower as may
be reasonably requested by the Documentation Agent;
(f) Such other approvals, opinions or documents as the
Documentation Agent may reasonably request.
Section 6.3 Conditions Precedent to any Project Borrowing. In addition to
the occurrence of the Closing Date and, in the case of a Non-Kmart Borrower,
the satisfaction of the conditions set forth in Section 6.2, the right of any
Borrower to make a Project Borrowing and the Obligation of the Banks to make
the Project Loan under this Agreement to such Borrower shall be subject to the
fulfillment, at or prior to the time of the making of such Project Loan, of
each of the following conditions:
(a) The Documentation Agent shall have received an Allocation Request
with respect to such Project, together with a Notice of Borrowing with respect
to the requested Loan, and duly executed Notes in accordance with Section
2.2(b) hereof, and shall have established a Project Commitment Amount in
accordance with the terms of this Agreement.
(b) The Guarantor or such Non-Kmart Borrower shall have paid the
Documentation Agent all costs, accrued and unpaid fees and expenses then due
and payable by either of them with respect to such Borrowing.
(c) The Documentation Agent shall have received all relevant Payoff
Letters with respect to such Project, each dated within ten (10) days of the
requested date of funding of such Project Loan.
(d) The representations and warranties contained in this Agreement
with respect to such Borrower and all of its Projects shall be true and correct
on and as of such Borrowing Date with the same effect as if made on and as of
such Borrowing Date (except to the extent such representations and warranties
expressly refer to an earlier date, in which case they shall be true and
correct as of such earlier date);
(e) No Guarantor Event of Default or Unmatured Guarantor Event of
Default or Borrower Event of Default or Unmatured Borrower Event of Default
with respect to such Borrower shall have occurred and shall then be continuing
on such date or will occur after giving effect to such Borrowing; and
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(f) The Documentation Agent shall have received such other
instruments, documents and opinions as the Documentation Agent shall reasonably
request in connection with such Loan, and all such instruments, documents and
opinions shall be reasonably satisfactory to the Documentation Agent.
Section 6.4 Conditions Precedent to All Borrowings (other than a
Roll-Over Borrowing). In addition to the occurrence of the Closing Date, and,
in the case of a Non-Kmart Borrower, the satisfaction of the conditions set
forth in Section 6.2, and with respect to any Project Borrowing, satisfaction
of the conditions set forth in Section 6.3, the right of any Borrower to make
any Borrowing (other than a Roll-Over Borrowing) hereunder and the obligation
of each Bank to make a Loan in respect of any such Borrowing hereunder in each
case shall be subject to the fulfillment at or prior to the time of the making
of such Borrowing of each of the following conditions:
(a) The representations and warranties contained in this Agreement
with respect to such Borrower shall be true and correct on and as of such
Borrowing Date with the same effect as if made on and as of such Borrowing Date
(except to the extent such representations and warranties expressly refer to an
earlier date, in which case they shall be true and correct as of such earlier
date);
(b) No Guarantor Event of Default or Unmatured Guarantor Event of
Default or Borrower Event of Default or Unmatured Borrower Event of Default
with respect to such Borrower shall have occurred and shall then be continuing
on such date or will occur after giving effect to such Borrowing.
Each Notice of Borrowing submitted by any Borrower hereunder shall constitute a
representation and warranty by it, as of the date of each such notice and as of
the Borrowing Date relating thereto, that the conditions in this Section 6.4
are satisfied.
Section 6.5 Conditions Precedent to All Roll-Over Borrowings. The right
of any Borrower to make any Roll-Over Borrowing hereunder and the obligation of
each Bank to make any Roll-Over Borrowing hereunder shall be subject to the
condition that the Loan Obligations of such Borrower shall not have been
accelerated.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Guarantor Events of Default. If any of the following
events, acts, occurrences or state of facts (herein called a "Guarantor Event
of Default") shall occur or exist (for
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any resason whatsoever, and whether such happening shall be voluntary or
involuntary or come about or be effected by operation of law pursuant to or in
accordance with any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) Guarantor shall fail to comply with any of its covenants or
agreements contained in the Guaranty and such failure shall continue
unremedied beyond any cure or grace period set forth therein with
respect thereto; or
(b) any representation or warranty of Guarantor contained in
this Agreement or the Guaranty proves to be inaccurate or untrue in any
material respect on or as of the date made or deemed made; or
(c) (i) The Guarantor fails to make any payment of principal or
interest or fees under any of the Other Credit Facilities when due after
taking into account any applicable grace periods, or (ii) by reason of
any action taken by the Guarantor with the intent and capacity promptly
to satisfy any obligation of the Guarantor resulting therefrom,
including, without limitation, the calling for payment by the Guarantor
of any of its Indebtedness or the termination by the Guarantor of any of
its Guaranty Obligations, any Indebtedness shall mature or be declared
due and payable prior to its stated maturity and such Indebtedness shall
remain unpaid for a period of two (2) Business Days thereafter, or (iii)
the Guarantor fails to perform or observe any condition or covenant or
any other event shall occur or condition exists (other than with respect
to matters described under clause (ii) immediately preceding) relating
to Indebtedness (other than Indebtedness under the Other Credit
Facilities) having an aggregate principal amount (including undrawn
committed or available amounts) of more than One Hundred Million Dollars
($100,000,000) if the effect of any such failure, event or condition is
to cause such Indebtedness to be declared to be due and payable or
otherwise become due and payable prior to its stated maturity, or (iv)
the Guarantor fails to pay any such other Indebtedness in full at its
stated maturity; or
(d) The occurrence of a Reportable Event with respect to the
Guarantor which the PBGC deems grounds to terminate any employee pension
benefit plan of the Guarantor or for the appointment of a trustee to
administer such plan and such Reportable Event is not corrected and such
determination by the PBGC is not revoked within thirty (30) days after
notice thereof; or the institution of proceedings by the PBGC to
terminate any such plan; or the appointment of a trustee to administer
any such plan; or
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(e) A final judgment or judgments in excess of One Hundred
Million Dollars ($100,000,000) shall be entered against the Guarantor by
a court of record and not discharged in accordance with its terms or,
within sixty (60) days from the date of entry thereof, stayed from
execution and (within said period of sixty (60) days or such longer
period during which execution of such judgment(s) shall have been stayed)
appeal taken therefrom and execution thereof stayed during such appeal;
or
(f) The Guarantor (i) generally fails to pay, or admits in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding with respect
to itself; or (iv) takes any action to effectuate or authorize any of
the foregoing; or
(g) (i) Any involuntary Insolvency Proceeding is commenced or
filed against the Guarantor, or any writ, judgment, warrant of
attachment, execution or similar process, is issued or levied against a
substantial part of the Guarantor's properties, and any such proceeding
or petition is not dismissed, or such writ, judgment, warrant of
attachment, execution or similar process is not released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) the
Guarantor admits the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief is entered in any
Insolvency Proceeding; or (iii) the Guarantor acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for
itself or a substantial portion of its business.
(h) The Guaranty shall cease for any reason to be in full force
and effect or Guarantor shall disavow any of its obligations under the
Guaranty;
then, and in any such event and at any time thereafter, the Documentation
Agent may and, at the direction of the Required Banks shall, take one or more
of the following actions: (i) by written or oral or telephonic notice in the
case of oral or telephonic notice confirmed in writing immediately thereafter)
to Guarantor, as agent for the Borrowers, declare the Total Commitment and each
Project Commitment to be terminated whereupon the Total Commitment and each
Project Commitment shall forthwith terminate, and/or (ii) by written or oral or
telephonic notice (in the case of oral or telephonic notice confirmed in
writing immediately thereafter) to each Borrower declare all sums then owing by
such Borrower hereunder and under any Notes to be forthwith due and payable,
whereupon all such sums shall become and be immediately due and payable without
presentment, demand, protest or notice of any kind,
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all of which are hereby expressly waived by each Borrower. In cases of any
occurrence of any event of default described in clause (f) or (g) of this
Section 7.1, the Commitments shall terminate and the Loans and the Notes,
together with accrued interest thereon, shall automatically become due and
payable forthwith without the requirement of any such acceleration or request,
and without presentment, demand, protest or other notice of kind, all of which
are expressly waived, any provision of this Agreement or the Notes to the
contrary notwithstanding and all other amounts payable by any Borrower
hereunder or under any Notes shall also become immediately due and payable all
without notice of any kind.
Anything in this Section 7.1 to the contrary notwithstanding, the
Documentation Agent shall, at the request of the Required Banks rescind and
annul any acceleration of the Notes by written instrument filed with each
Borrower; provided that at the time such acceleration is so rescinded and
annulled: (A) all past due interest and principal, if any, on the Notes and all
other sums payable under this Agreement and the Notes (except any principal and
interest which has become due and payable solely by reason of such acceleration
pursuant to this Section 7.1) shall have been duly paid in full, and (B) no
other Guarantor Event of Default shall have occurred and be continuing which
shall not have been waived pursuant to Section 9.1 hereof.
Section 7.2 Borrower Events of Default. if any of the following
events, acts, occurrences or state of facts (herein called a "Borrower Event of
Default") shall occur or exist (for any reason whatsoever with respect to a
Borrower, and whether such happening shall be voluntary or involuntary or come
about or be effected by operation of law pursuant to or in accordance with any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) Such Borrower shall fail to pay, when and as required
to be paid herein, any amount of principal of any Loan and such
default shall continue unremedied for a period of two (2) Business
Days after the date upon which notice thereof is received by such
Borrower and the Guarantor from the Documentation Agent;
(b) Such Borrower shall fail to pay, when and as required
to be paid herein, any interest or any fees payable hereunder and such
default shall continue unremedied for a period of five (5) Business
Days after the date upon which notice thereof is received by such
Borrower and the Guarantor from the Documentation Agent; or
(c) Any representation or warranty on the part of such
Borrower contained in any Loan Document shall have been incorrect in
any material respect when made or deemed made
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(unless, with respect to any Non-Kmart Borrower, the Guarantor shall
have notified the Documentation Agent in writing that the Guarantor
requests the same be waived and no Guarantor Event of Default then
exists, in which case the same shall be waived hereunder without
further action by the Documentation Agent or the Banks);
(d) Such Borrower shall default in the performance or
observance of any covenant or agreement on its part to be performed or
observed hereunder or under any Loan Document and such failure shall
continue unremedied for a period of thirty (30) days after written
notice thereof has been given to such Borrower and the Guarantor by
the Documentation Agent (unless, with respect to any Non-Kmart
Borrower, the Guarantor shall have notified the Documentation Agent in
writing that the Guarantor requests the same be waived and no
Guarantor Event of Default then exists, in which case the same shall
be waived hereunder without further action by the Documentation Agent
or the Banks);
(e) Such Borrower shall become insolvent or generally
fail to pay, or admit in writing its inability to pay, its debts as
they become due, or shall voluntarily commence any proceeding or file
any petition under any bankruptcy, insolvency or similar law or
seeking dissolution or reorganization or the appointment of a
receiver, trustee, custodian or liquidator for it or a substantial
portion of its property, assets or business or to effect a plan or
other arrangement with its creditors, or shall file any answer
admitting the jurisdiction of the court and the material allegations
of an involuntary petition filed against it in any bankruptcy,
insolvency or similar proceeding, or shall be adjudicated bankrupt, or
shall make a general assignment for the benefit of creditors, or shall
consent to, or acquiesce in the appointment of a receiver, trustee,
custodian or liquidator for a substantial portion of its property,
assets or business, or shall call a meeting of its creditors with a
view to arranging a composition or adjustment of its debts or shall
take any corporate action authorizing any of the foregoing; or
(f) Involuntary proceedings or an involuntary petition
shall be commenced or filed against such Borrower under any
bankruptcy, insolvency or similar law or seeking the dissolution or
reorganization of it or the appointment of a receiver, trustee,
custodian or liquidator for it or of a substantial part of its
property, assets or business, or any writ, judgment, warrant of
attachment, execution or similar process shall be issued or levied
against a substantial part of its property, assets or business, and
such proceedings or petition shall not be dismissed, or such writ,
judgment, warrant of attachment, execution or similar process shall
not
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be released, vacated or fully bonded, within sixty (60) days after
commencement, filing or levy, as the case may be, or any order for
relief shall be entered in any such proceeding; or
(g) Such Borrower shall disavow its obligations under
this Agreement or any Note or other Loan Document to which it is a
party or shall deny that it has any or further obligations hereunder
or thereunder (in each case other than by reason of the satisfaction
of all of such Borrower's obligations hereunder and thereunder or the
unlawful disavowal by any other party to such agreements of their
respective obligations thereunder); or
(h) With respect to any Non-Kmart Borrower, any lease of
any of its Projects to Guarantor shall terminate or Guarantor shall
disavow its obligations under such lease or shall deny that it has any
or further obligations thereunder; or
(i) With respect to any Non-Kmart Borrower, any APUC
relating to any of its Projects shall terminate or Guarantor shall
disavow its obligations under any such APUC or shall deny that it has
any or further obligations thereunder;
then, and in any such event and at any time thereafter, the Documentation
Agent may and, at the direction of the Required Banks shall, take one or more
of the following actions: (i) by written or oral or telephonic notice (in the
case of oral or telephonic notice confirmed in writing immediately thereafter)
to the Borrower or Borrowers as to which such Borrower Event of Default has
occurred declare any Project Commitment for such Borrower to be terminated
whereupon such Project Commitment shall forthwith terminate, and/or (ii) by
written or oral or telephonic notice (in the case of oral or telephonic notice
confirmed in writing immediately thereafter) to such Borrower declare all sums
then owing by such Borrower hereunder and under any Notes of such Borrower to
be forthwith due and payable, whereupon all such sums shall become and be
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by such Borrower. In case
of any occurrence of any event of default described in clause (e) or (f) of
this Section 7.2, the Commitments in respect of such Borrower shall terminate
and such Borrower's Loans and Notes, together with accrued interest thereon,
shall automatically become due and payable forthwith, without the requirement
of any such acceleration or request, and without presentment, demand, protest
or other notice of any kind, all of which are expressly waived, any provision
of this Agreement or the Notes to the contrary notwithstanding and all other
amounts payable by such Borrower hereunder or under any Notes shall also become
immediately due and payable all without notice of any kind.
Anything in this Section 7.2 to the contrary notwithstanding,
the Documentation Agent shall, at the request of the Required
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Banks, rescind and annul any acceleration of such Borrower's Notes by written
instrument filed with such Borrower; provided that at the time such
acceleration is so rescinded and annulled: (A) all past due interest and
principal, if any, on such Borrower's Notes and all other sums payable by such
Borrower under this Agreement and the Notes (except any principal and interest
on such Borrower's Loan Obligations which has become due and payable solely by
reason of such acceleration pursuant to this Section 7.2) shall have been duly
paid in full and (B) no other Borrower Event of Default shall have occurred and
be continuing with respect to such Borrower which shall not have been waived
pursuant to Section 9.1 hereof.
Notwithstanding the foregoing, or anything else in this Agreement, any
Notes or any other Loan Documents to which any Non-Kmart Borrower is a party,
upon the occurrence of a Borrower Event of Default with respect to a Non-Kmart
Borrower, the Banks, prior to exercising any rights or remedies against such
Non-Kmart Borrower, shall first make demand upon the Guarantor under the
Guaranty. Only in the event that the Guarantor shall fail to perform under
the Guaranty within five (5) days of such demand shall the Banks and the
Documentation Agent proceed to exercise rights or remedies under or otherwise
enforce this Agreement, any Notes or any other Loan Documents to which such
Non-Kmart Borrower is a party against such Non-Kmart Borrower, and in such
case, notwithstanding anything in this Agreement, such Notes or such other Loan
Documents to the contrary, such Non-Kmart Borrower's liability hereunder and
thereunder shall be limited to the items of collateral which such Non-Kmart
Borrower has assigned to, and/or in which such Non-Kmart Borrower has granted a
security interest in favor of, the Documentation Agent, under and as provided
in each Assignment executed by such Non-Kmart Borrower, and such Non-Kmart
Borrower's obligations and liability to the Documentation Agent and the Banks
under this Agreement, any Notes and any other Loan Documents shall be without
recourse to any other property or assets of such Non-Kmart Borrower, its
partners or stockholders (as applicable).
ARTICLE VIII
THE DOCUMENTATION AGENT
In this Article VIII, the Banks agree among themselves as follows:
Section 8.1 Appointment. The Banks hereby appoint BT as
Documentation Agent to act as herein specified. Each Bank hereby irrevocably
authorizes and each holder of any Note by the acceptance thereof shall be
deemed irrevocably to authorize the Documentation Agent to take such action on
its behalf under the provisions of the Loan Documents (including, without
limitation, to
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give notices and take such actions on behalf of the Required Banks as are
consented to in writing by the Required Banks) and any other instruments,
documents and agreements referred to therein and to exercise such powers
hereunder and thereunder as are specifically delegated to the Documentation
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Documentation Agent may perform any of its duties
hereunder, or under the Loan Documents, by or through its agents or employees.
Section 8.2 Nature of Duties. The Documentation Agent shall have no
duties or responsibilities except those expressly set forth in this Agreement.
The duties of the Documentation Agent shall be mechanical and administrative in
nature. Without limiting the effect of the foregoing sentence, the
Documentation Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Bank. Nothing in any of the Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Documentation Agent any obligations in respect of any of the Loan Documents
except as expressly set forth herein or therein. Each Bank shall make its own
independent investigation of the financial condition and affairs of each
Borrower in connection with the making and the continuance of the Loans
hereunder and shall make its own appraisal of the creditworthiness of each
Borrower, and the Documentation Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Bank with any credit
or other information with respect to any Borrower, whether coming into its
possession before making of the Loans or at any time or times thereafter
provided, however, upon the request of any Bank, the Documentation Agent shall
use reasonable efforts to provide to such Bank, copies of any information
required to be furnished under Section 5.1 or 5.3 by any Borrower to the
Documentation Agent and not to each Bank. The Documentation Agent will
promptly notify each Bank at any time that the Required Banks have instructed
it to act or refrain from acting pursuant to Article VII.
Section 8.3 Rights, Exculpation, etc. Neither the Documentation
Agent nor any of its officers, directors, employees or agents shall be liable
to any Bank for any action taken or omitted by it hereunder or under any of the
Loan Documents, or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The Documentation Agent shall
not be responsible to any Bank for any recitals, statements, representations
or warranties herein or for the execution, effectiveness, genuineness,
validity, enforceability, collectibility, or sufficiency of any of the Loan
Documents or the financial condition of any Borrower. The Documentation Agent
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement, any
of the Notes or any of the other Loan Documents or the financial condition of
any Borrower, or the existence or possible existence of any Unmatured Guarantor
Event of
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Default, Guarantor Event of Default, Unmatured Borrower Event of Default or
Borrower Event of Default unless requested to do so by the Required Banks. The
Documentation Agent may at any time request instructions from the Banks with
respect to any actions or approvals which by the terms of any of the Loan
Documents the Documentation Agent is permitted or required to take or to grant,
and if such instructions are requested, the Documentation Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Required
Banks. Without limiting the foregoing, no Bank shall have any right of action
whatsoever against the Documentation Agent as a result of the Documentation
Agent acting or refraining from acting under any of the Loan Documents in
accordance with the instructions of the Required Banks.
Section 8.4 Reliance. The Documentation Agent shall be entitled
to rely upon any written notice, statement, certificate, order or other
document or any telephone message reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person, and, with
respect to all matters pertaining to any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
Section 8.5 Indemnification. To the extent that the
Documentation Agent is not reimbursed and indemnified by the Borrowers or the
Guarantor, the Banks will reimburse and indemnify the Documentation Agent for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Documentation Agent, acting pursuant hereto, in any way relating to or arising
out of any of the Loan Documents or any action taken or omitted by the
Documentation Agent under any of the Loan Documents, in proportion to each
Bank's respective Pro Rata Share of the Total Commitment; provided, however,
that no Bank shall be liable for any portion of such liabilites, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Documentation Agent's gross negligence or
willfull misconduct. The obligations of the Banks under this Section 8.5
shall survive the payment in full of the Notes and the termination of this
Agreement.
Section 8.6 The Documentation Agent Individually. With respect
to its Pro Rata Share of the Total Commitment hereunder and the Loans made by
it and any Notes issued to or held by it, the Documentation Agent shall have
and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any
other Bank or holder of a Note. The terms "Banks" or "Required Banks" or
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"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include the Documentation Agent in its individual capacity
as a Bank, one of the Required Banks or a holder of a Note. The Documentation
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with any Borrower or any Subsidiary of any
Borrower as if it were not acting as Documentation Agent pursuant hereto.
Section 8.7 Resignation by the Documentation Agent; Removal.
(a) The Documentation Agent may resign from the performance of all
its functions and duties hereunder at any time by giving fifteen (15) Business
Days' prior written notice to the Borrowers, Guarantor and the Banks. Such
resignation shall take effect upon the acceptance by a successor Documentation
Agent of appointment pursuant to clauses (b) or (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Documentation Agent which, provided no Guarantor Event of
Default then exists, shall be reasonably satisfactory to the Guarantor and
shall be an incorporated bank or trust company.
(c) If a successor Documentation Agent shall not have been so
appointed within said fifteen (15) Business Day period, the Documentation
Agent, with the consent of Guarantor, shall then appoint a successor
Documentation Agent who shall serve as Documentation Agent until such time, if
any, as the Required Banks, with the consent of the Guarantor, appoint a
successor Documentation Agent as provided above.
(d) If no successor Documentation Agent has been appointed
pursuant to clause (b) or (c) by the 30th day after the date such notice of
resignation was given by the Documentation Agent, the Documentation Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of the Documentation Agent hereunder until such time, if
any, as the Required Banks, with the consent of the Guarantor, appoint a
successor Documentation Agent as provided above.
(e) The Documentation Agent may be removed from the performance of
its functions and duties hereunder for cause (as defined herein) upon written
notice received by the Documentation Agent from the Required Banks and the
Guarantor. For purposes of this Section 8.7(e) "cause, shall mean gross
negligence or willful misconduct by the Documentation Agent in the performance
of its functions and duties hereunder.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments and Waivers. No amendment, modification,
supplement, termination or waiver of or to any provision of this Agreement, nor
consent to any departure by any Borrower or any Subsidiary of any Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
or on behalf of the Required Banks; provided, however, that no such amendment,
modification, supplement, termination, waiver or consent, as the case may be,
which has the effect of:
(i) changing the Commitment of any Bank hereunder;
(ii) reducing the rate or amount, or extending the stated
maturity or due date, of any sum payable by any Borrower to any Bank
hereunder or under any Loan Document;
(iii) changing this Section 9. 1 or the definitions of the
terms "Reauired Banks" and "Pro Rata Share";
(iv) amend, waive, modify, release or terminate the
Guaranty; or
(v) extend the Termination Date;
shall be effective unless the same shall be signed by or on behalf of each Bank
hereunder; provided, further, that no such amendment, modification,
supplement, termination, waiver or consent, as the case may be, which has the
effect of (i) increasing the duties or obligations of the Documentation Agent
hereunder, (ii) increasing the standard of care or performance required on the
part of the Documentation Agent hereunder, (iii) reducing or eliminating the
fees, indemnities or immunities to which the Documentation Agent is entitled
hereunder (including, without limitation, any amendment or modification of this
Section 9.1), or (iv) amending any provision which requires action by all the
Banks hereunder, shall be effective unless the same shall be signed by or on
behalf of the Documentation Agent. Any amendment, modification or supplement
of or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by any Borrower from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given. Except where
notice is specifically required by any Loan Document, no notice to or demand on
any Borrower in any case shall entitle such Borrower to any other or further
notice or demand in similar or other circumstances. The Documentation Agent
will provide to Guarantor a copy of any proposed amendment, modification or
waiver relating to this Agreement not less than three (3) Business Days prior
to the anticipated date of execution thereof provided, however, that
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the failure of the Documentation Agent to provide such copy shall not affect
the validity of the Guaranty or any amendment, modification or waiver otherwise
properly executed.
Section 9.2 Further Assurances. Each Borrower agrees to do such
further acts and things and to execute and deliver to the Documentation Agent
such additional assignments, agreements, powers and instruments, as the
Documentation Agent may reasonably require or deem advisable to carry into
effect the purposes of this Agreement or to better assure and confirm unto the
Documentation Agent its rights, powers and remedies hereunder.
Section 9.3 Notices. Except where telephonic instructions or
notices are authorized herein to be given, all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto or any other Person shall be in writing and shall be personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, or by a reputable overnight or courier delivery service, or
by telecopier, and shall be deemed to be given for purposes of this Agreement,
if by overnight or courier delivery service, on the day that such writing is
delivered, if by telecopy, on the day that such writing is sent and if by mail,
on the day which is four (4) Business Days after the day such writing is sent
to the intended recipient thereof in accordance with the provisions of this
Section 9.3. Unless otherwise specified in a notice sent or delivered in
accordance with the foregoing provisions of this Section 9.3, notices, demands,
instructions and other communications in writing shall be given to or made upon
the respective parties hereto at their respective addresses (or to their
respective telecopier numbers) indicated below and, in the case of telephonic
instructions or notices, by calling the telephone number or numbers indicated
for such party below:
If to a particular, Borrower, at its address as set forth on the
signature page hereto or on the most recent Additional Borrower
Agreement executed by such Borrower.
If to Bankers Trust Company, in its individual capacity and as
Documentation Agent
Bankers Trust Company
Real Estate Finance Group, Floor 23W
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxxxxx
Tel. No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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With a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Tel. No. (000) 000-0000
Telecopier No.: (000) 000-0000
If to a particular Bank, at its address as set forth on the signature
page hereto or in any notice of assignment delivered to each
Borrower pursuant to Section 9.9(b) hereof.
Each Borrower acknowledges and agrees that any agreement of the
Documentation Agent and the Banks in Article II herein to receive certain
notices by telephone and facsimile is solely for the convenience and at the
request of such Borrower. The Documentation Agent and the Banks shall be
entitled to rely in good faith on the authority of any Person purporting to be
a Person authorized by such Borrower to give such notice and the Documentation
Agent and the Banks shall not have any liability to such Borrower or other
Person on account of anv action taken or not taken by the Documentation Agent
and the Banks in good faith reliance upon such telephonic or facsimile notice.
The obligation of the Borrowers to repay the Loans shall not be affected in any
way or to any extent by any failure by the Documentation Agent and the Banks to
receive written confirmation of any telephonic or facsimile notice or the
receipt by the Documentation Agent and the Banks of a confirmation which is at
variance with the terms conveyed to the Documentation Agent and the Banks in
the telephonic or facsimile notice.
Section 9.4 No Waiver. No failure or delay on the part of the
Documentation Agent or any Bank in exercising any right, power or remedy
hereunder or under any Note shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the Documentation Agent or any Bank at
law or in equity, or otherwise.
Section 9.5 Costs and Expenses. Each Borrower agrees (without
duplication), whether or not the transactions contemplated hereby shall be
consummated, to:
(a) pay or reimburse the Documentation Agent on demand for all
costs and expenses incurred by the Documentation Agent in connection with the
development preparation, delivery, administration (including the costs of
recording each Assignment in the real estate records relating to the Project
affected thereby), and execution of, and any amendment, supplement, waiver or
modification to, this Agreement, any Loan Document and any other documents
prepared in
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connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby including the Attorney Costs incurred by the
Documentation Agent with respect thereto; provided, that the fees and expenses
of outside counsel in connection with the preparation of this Agreement and the
other Loan Documents shall be in accordance with a letter agreement dated
August 30, 1994 from Winston & Xxxxxx to the Documentation Agent; and provided,
further, that the fees and expenses of counsel to the Documentation Agent which
shall be payable by any Person becoming an additional Borrower after the date
hereof solely with respect to such Person's so becoming an additional Borrower
shall be limited to (x) a pro rata share of the fees and expenses of counsel to
the Documentation Agent incurred in connection with negotiation and
documentation of this Agreement and the other Loan Documents being executed in
connection with the Initial Borrowing hereunder, and (y) the fees of such
counsel incurred in connection with preparing the related Additional Borrower
Agreement, Notes and other Loan Documents and reviewing the deliveries of such
Person required hereunder in connection with such Person's becoming a Borrower
hereunder, which fees shall not exceed $2,500, and the reasonable expenses of
such counsel incurred in connection therewith;
(b) pay or reimburse each Bank and the Documentation Agent on demand for
all reasonable costs and expenses incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
(including in connection with any "workout" or restructuring regarding the
Loans or any Unmatured Guarantor Event of Default or Guarantor Event of
Default) under this Agreement, any other Loan Document, and any such other
documents, including Attorney Costs incurred by the Documentation Agent and any
Bank; and
(c) pay or reimburse the Documentation Agent on demand for all reasonable
appraisal (including the allocated cost of internal appraisal services),
audit, environmental inspection and review (including the allocated cost of
such internal services), search and filing costs, fees and expenses, incurred
or sustained by the Documentation Agent in connection with the matters referred
to under clause (b) of this Section 9.5.
(d) Any portion of the foregoing fees, costs and expenses which
remains unpaid at least ten (10) Business Days after the Documentation Agent's
or any Bank's statement and request for payment thereof shall bear interest
from the date of such statement and request to the date of payment at the
Default Rate applicable to Reference Rate Loans.
Section 9.6 Indemnity. Each Borrower hereby agrees to indenify and hold
harmless the Banks, the Documentation Agent, the Arrangers and each director,
officer and employee of each of them (each, an "Indemnified Person") from and
against any and all actions, suits, proceedings, damages, liabilities or
expenses of any
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kind or nature whatsoever which may be incurred by or asserted against
any such Indemnified Person: (a) as a result of such Borrower's making any
untrue statement of a material fact or omitting to state a material fact under
or pursuant to the Contract Documents, or such Borrower's negligence under, or
breach or default of, the Contract Documents; or (b) by any third party who has
a relationship with Kmart Corporation or such Borrower and asserts in
connection therewith that an Indemnified Person is liable to such third party
by reason of the Contract Documents between such Borrower and the Banks, the
Documentation Agent and/or the Arrangers; provided, that no Indemnified Person
shall be indemnified with respect to such party's breach, default, negligence
or bad faith in performing its duties and obligations under any of the Contract
Documents. For purposes hereof, the term "Contract Documents" means the
Loan Documents and any further agreements or instruments entered into pursuant
to this Agreement. Any Indemnified Person seeking indemnification pursuant
hereto with respect to a third party claim must give the applicable Borrower
timely notice of any such claim and cooperate in the defense thereof, and such
Borrower shall have the right to control the defense thereof and, if the same
shall not involve any payment or performance by the Indemnified Person,
settlement of such claim.
Section 9.7 Marshalling; Payments Set Aside. Neither the Documentation
Agent nor any Bank shall be under any obligation to xxxxxxxx any assets in
favor of any Borrower or any other Person or against or in payment of any or
all Obligations. To the extent that any Borrower makes a payment or payments
to the Documentation Agent or the Banks, or the Documentation Agent or the
Banks enforce their Liens or exercise their rights of set-off against such
Borrower, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party in connection with any Insolvency Proceeding, or
otherwise, then to the extent of such recovery the obligation or part thereof
originally intended to be satisfied by such Borrower shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or set-off had not occurred.
Section 9.8 Successors and Assigns. Subject to Section 9.9 hereof, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that no
Borrower may assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Documentation Agent and each
Bank.
Section 9.9 Assignments, Participations, Etc.
(a) Any Bank may, with the written consent of the Guarantor and the
Documentation Agent, which consents shall not be
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unreasonably withheld, at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Guarantor or the
Documentation Agent shall be required in connection with any assignment and
delegation by a Bank to a Bank Affiliate of such Bank or to any other
Bank) (each, an "Assignee") all, or any part of its Credit Exposure, provided
that (i) it assigns its Credit Exposure in an amount not less than Ten Million
Dollars ($10,000,000), and (ii) such Assignee pays to the Documentation
Agent an assignment fee of $3,000. Each Borrower and the Banks agree that to
the extent of any assignment to an Assignee in accordance with the foregoing
sentence, the Assignee shall be deemed to have the same rights and benefits
with respect to each Borrower under this Agreement and any Notes and the same
rights of set-off and obligation to share pursuant to Section 9.11 as it would
have had if it were a Bank hereunder, provided that each Borrower and the
Documentation Agent shall be entitled to continue to deal solely and directly
with the assignor Bank in connection with the interests so assigned to the
Assignee until written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to each Borrower and the Documentation Agent by the
assignor Bank and the Assignee (accompanied, in the case of the Documentation
Agent, by payment of the assignment fee).
(b) Upon the assignment of Credit Exposure provided for hereby, the
assignor Bank shall be relieved of its obligations hereunder to the extent of
such assignment and the Assignee shall become a Bank hereunder. In the event
that the holder of any Note (including any Bank) shall assign or transfer such
Note as permitted hereby, or any part of the obligations evidenced thereby, the
applicable Borrower shall, upon surrender of such Note, issue new Notes to
reflect such transfer or assignment payable to the order of the relevant
parties as their respective interests may appear; provided that such Borrower
and the Documentation Agent shall be entitled to continue to deal solely and
directly with the assignor holder of such Note in connection with the interests
so assigned until written notice of such assignment shall have been given to
such Borrower and the Documentation Agent by the assignor and the assignee of
such Note or interest therein.
(c) Each Bank may at any time sell to one or more banks or other
entities ("Participants") participating interests in all or any portion
of its Commitment and Loans made pursuant to this Agreement or any other
interest of such Bank hereunder or under any Note (in respect of any Bank, its
"Credit Exposure"), provided that, notwithstanding the foregoing, any Bank may
at any time sell participating interests in all or a part of its Credit
Exposure to any Affiliate of such Bank or to any other Bank. In the event of
any such sale by a Bank of participating interests to a Participant, such
Bank's obligations under this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such Bank shall remain
the holder of any such Notes for all
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purposes under this Agreement and each Borrower and the Documentation Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement. Each Borrower agrees
that if amounts outstanding under this Agreement and the Notes are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of a Guarantor Event of Default or Borrower Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement and any Note to
the same extent as if the amount of its participating interest were owing
directly to it as a Bank under this Agreement or any Note, provided that such
right of set-off shall be subject to the obligation of such Participant to
share with the Banks, and the Banks agree to share with such Participant, as
provided in Section 9.11. Each Borrower also agrees that each Participant shall
be entitled to the benefits of Sections 3.1, 3.3 and 3.5 with respect to its
participation in the Loans outstanding from time to time, but only to the
extent it would be entitled to the same if it were also a Bank which is an
Eligible Assignee. Each Bank agrees that any agreement between such Bank and
any such Participant in respect of such participating interest shall not
restrict such Bank's right to agree to any amendment, supplement or
modification to the Agreement or any of the Loan Documents except to extend the
final maturity of any Note or reduce the rate or extend the time of payment of
interest thereon or reduce the principal amount thereof or release the
Guaranty.
(d) Each Bank and the Documentation Agent agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality
of all information identified as "confidential" by the Borrowers provided to it
by the Borrowers or by the Documentation Agent on any Borrower's behalf, in
connection with this Agreement or any other Loan Document, and neither it nor
any of its Affiliates shall use or disclose any such information for any
purpose or in any manner other than pursuant to the terms contemplated by this
Agreement, except to the extent such information (i) was or becomes generally
available to the public other than as a result of a disclosure by a party to
this Agreement, or (ii) was or becomes available on a non-confidential basis
from a source other than the Borrowers, provided that such source is not bound
by a confidentiality agreement with the applicable Borrower known to the
Bank; provided, further, that the Documentation Agent or any Bank may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Documentation Agent or such Bank is subject
or in connection with an examination of the Documentation Agent or such Bank by
any such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; and (D) to the Documentation Agent's or such Bank's
independent auditors and other professional advisors in the ordinary course of
and within the scope of such advisors' engagements. Notwithstanding the
foregoing, the Company authorizes
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each Bank to disclose to any participant or Assignee (each, a "Transferee")
and to any prospective Transferee, such financial and other information in such
Bank's possession concerning any Borrower or its Subsidiaries which has been
delivered to the Documentation Agent or the Banks by such Borrower in
connection with the Banks' credit evaluation of such Borrower prior to entering
into this Agreement; provided, that unless otherwise agreed by such Borrower,
such Transferee or prospective Transferee agrees in writing to such Bank to
keep such information confidential to the same extent required of the Banks
hereunder. Each Bank agrees that its obligations under this Section 9.9 shall
survive any sale or assignment of its interests to a Transferee.
(e) In the event that the holder of any Note (including any Bank) shall
transfer such Note in accordance with the terms hereof, it shall immediately
advise the Documentation Agent and the applicable Borrower of such transfer,
and the Documentation Agent and the applicable Borrower shall be entitled
conclusively to assume that no transfer of any Note has been made by any holder
(including any Bank) unless and until Documentation Agent and such Borrower
shall have received written notice to the contrary. Except as otherwise
provided in this Agreement or as otherwise expressly agreed in writing by all
of the other parties hereto, no Bank shall, by reason of the transfer of a Note
or otherwise, be relieved of any of its obligations hereunder. Each transferee
of any Note shall take such Note subject to the provisions of this Agreement
and to any request made, waiver or consent given or other action taken
hereunder, prior to the receipt by the Documentation Agent and the applicable
Borrower of written notice of such transfer, by each previous holder of such
Note, and, except as expressly otherwise provided in such transfer by each
previous holder of such Note, and, except as expressly otherwise provided in
such notice, the Documentation Agent and the applicable Borrower shall be
entitled conclusively to assume that the transferee named in such notice shall
thereafter be vested with all rights and powers under this Agreement with
respect to the Pro Rata Share of the Loans of the Bank named as the payee of
the Note which is the subject of such transfer.
Section 9.10 Confirmations. Each Borrower and each holder of any
Note agree from time to time upon written request received by one from the
other or from Guarantor, to confirm to the other or Guarantor, as the case may
be, in writing (with a copy of each such confirmation to the Documentation
Agent) the aggregate unpaid principal amount of any Loan Obligation then
outstanding.
Section 9.11 Set-off. In addition to any rights and remedies of the Banks
provided by law, if the Obligations of any Borrower shall have become due and
payable in full, each Bank is authorized at any time and from time to time,
without prior notice to such Borrower, any such notice being waived by each
Borrower to the fullest extent permitted by law, to set off and apply any and
all
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deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing to, such Bank to or for the
credit or the account of such Borrower against any and all Obligations of such
Borrower owing to such Bank, now or hereafter existing, irrespective of whether
or not the Documentation Agent or such Bank shall have made demand under this
Agreement or any Loan Document. Each Bank agrees promptly to notify the
affected Borrower, Kmart Corporation and the Documentation Agent after any such
set-off and application made by such Bank; provided, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Bank under this Section 9.11 are in addition to the other rights
and remedies (including other rights of set-off) which the Bank may have.
Section 9.12 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement in any number of separate counterparts, each
of which, when so executed, shall be deemed an original, and all of said
counterparts taken together shall he deemed to constitute but one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Guarantor and the Documentation Agent.
Section 9.13 Severability. The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
Section 9.14 No Third Parties Benefited. This Agreement is made and
entered into for the sole protection and lecal benefit of each Borrower, the
Banks and the Documentation Agent and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents. Neither the Documentation Agent
nor any Bank shall have any obligation to any Person not a party to this
Agreement or other Loan Documents.
Section 9.15 Governing Law and Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW
PROVISIONS THEREOF); PROVIDED THAT EACH BORROWER, THE GUARANTOR, THE
DOCUMENTATION AGENT, THE ARRANGERS AND THE BANKS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS, THE GUARANTOR, THE
DOCUMENTATION AGENT, THE ARRANGERS AND THE BANKS CONSENTS, FOR ITSELF AND IN
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RESPECT OF ITS PROPERTY, TO THE JURISDICTION OF THOSE COURTS. EACH OF THE
BORROWERS, THE GUARANTOR, THE DOCUMENTATION AGENT, THE ARRANGERS AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWERS,
THE GUARANTOR, THE DOCUMENTATION AGENT, THE ARRANGERS AND THE BANKS EACH WAIVE
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 9.16 Waiver of Jury Trial. THE BORROWERS, THE GUARANTOR, THE
BANKS, THE ARRANGERS AND THE DOCUMENTATION AGENT EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE.
THE BORROWERS, THE GUARANTOR, THE BANKS, THE ARRANGERS AND THE DOCUMENTATION
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES
FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY
OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY
OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 9.17 Entire Agreement. This Agreement, together with the other
Loan Documents, embodies the entire agreement, and understanding among the
Borrowers, the Guarantor, the Banks, and the Documentation Agent, and
supersedes all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof.
Section 9.l8 Borrower Termination. Any Borrower may, upon the delivery to
the Documentation Agent of a Borrower Termination Agreement, cease to be a
party hereto, if such Borrower's Obligations hereunder and all Notes evidencing
the same have been paid in full and all Project Commitments with respect to
such Borrower have been terminated; provided, however, that such Borrower's
obligations under Sections 2.9, 9.4, 9.7, 9.14, and 9.15 shall survive the
termination of such Borrower.
Section 9.19 Headings. The Table of Contents and Article and Section
headings used in this Agreement are for convenience of reference only and shall
not affect the construction of this Agreement.
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Section 9.20 Termination of Existing Facilities. The Kmart Borrower and
each Bank party to this Agreement which is also party to an Existing Facility
hereby agree to terminate such Existing Facility effective upon the execution
of this Agreement. The Kmart Borrower hereby agrees to pay any fees
outstanding to any such Bank in connection with such Existing Facility as soon
as practicable following invoice thereof by such Bank.
[BALANCE OF PAGE LEFT INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
ADDRESS FOR NOTICES KMART CORPORATION, as a Borrower
Kmart Corporation
0000 Xxxx Xxx Xxxxxx Xxxx By: Xxxxx X. Xxxxxxxx
Xxxx, XX 00000 -------------------------------
Attn: Treasurer
Fax No.: (000) 000-0000 Title: Vice President & Treasurer
Tel. No.: (000) 000-0000 ----------------------------
BANKERS TRUST COMPANY,
ADDRESS FOR NOTICES as Documentation Agent
Bankers Trust Company
000 Xxxx Xxxxxx By:
Floor 23W -------------------------------
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxxxx Title:
Fax No.: (000) 000-0000 ----------------------------
Tel. No.: (000) 000-0000
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
ADDRESS FOR NOTICES KMART CORPORATION, as a Borrower
Kmart Corporation
0000 Xxxx Xxx Xxxxxx Xxxx By:
Xxxx, XX 00000 ----------------------------
Attn: Treasurer
Fax No.: (000) 000-0000 Title:
Tel. No.: (000) 000-0000 -------------------------
BANKERS TRUST COMPANY,
ADDRESS FOR NOTICES as Documentation Agent
Bankers Trust Company
000 Xxxx Xxxxxx
Xxxxx 00X By: Xxxxxxx X. Xxxxxxx
Xxx Xxxx, XX 00000 ----------------------------
Attn: Xxx Xxxxxxxx
Fax No.: (000) 000-0000 Title: Vice President
Tel. No.: (000) 000-0000 -------------------------
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Banks Signatory to Credit Agreement
Banca Commerciale Italiana, Chicago
Branch
Banca Nazionale del Lavoro S.p.A. -
New York Branch
Bankers Trust Company
Bank of America National Trust and
Savings Association
The Bank of California, N.A.
Bank of Hawaii
The Bank of New York
The Bank of Tokyo Trust Company
Xxxxxxx Bank of South Florida, X.X.
Xxxxxx Nationale de Credit Agricole
Canadian Imperial Bank of Commerce
Comerica Bank
Credit Lyonnais Chicago Branch
Credit Lyonnais Cayman Island Branch
The Dai-Ichi Kangyo Bank, Ltd., Chicago
Branch
The Daiwa Bank, Limited
Deutsche Bank AG, Chicago and/or Cayman
Islands Branches
000
Xxxxx Xxxxxxxxxx Xxxx xx Xxxxxxxxxx
The First National Bank of Boston
The First National Bank of Chicago
First Tennessee Bank
National Association
Fleet Bank of Massachusetts, N.A.
The Fuji Bank, Limited
Istitutio Bancario San Paolo
di Torino S.p.A.
The Long-Term Credit Bank of Japan, Ltd.
Chicago Branch
Michigan National Bank
The Mitsubishi Trust and Banking Corp.
National City Bank, Columbus
NationsBank of North Carolina, N.A.
NBD Bank, N.A.
Royal Bank of Canada
The Sakura Bank, Limited
The Sanwa Bank, Limited, Chicago Branch
Shawmut Bank, N.A.
Societe Generale
Society National Bank
102
The Sumitomo Bank, Limited, Chicago
Branch
The Tokai Bank, Ltd., Chicago Branch
UMB Bank, n.a.
Union Bank
Union Bank of Switzerland - Chicago
Branch
United States National Bank of Oregon
Westdeutsche Landesbank Girozentrale
New York and Cayman Islands Branches
Yasuda Trust and Banking Company, Limited
103
EXHIBIT A
FORM OF ADDITIONAL BORROWER AGREEMENT
__________________, 19__
Bankers Trust Company,
as Documentation Agent for the Banks
parties to the Credit Agreement
referred to below
Real Estate Finance Group, Floor 23W
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ___________________________
Ladies and Gentlemen:
Reference is hereby made to that certain Warehouse Facility Credit
Agreement dated as of October 7, 1994 (as the same may be amended, restated,
modified or supplemented, the Credit Agreement") among the "Borrowers" (as
defined therein), the "Banks" (as defined therein) and Bankers Trust Company,
as Documentation Agent. All capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement.
The undersigned, ________________________________, a ________________
organized under the laws of the state of _________________________________
_______________________, desires to become a Borrower under the Credit
Agreement, effective on and as of the date hereof. In consideration of the
premises and of the mutual covenants contained in the Credit Agreement,
the undersigned hereby acknowledges and agrees as follows:
1. Upon execution and delivery of this Additional Borrower Agreement
by the undersigned, the undersigned hereby confirms that all of the
representations and warranties set forth in the Credit Agreement applicable to
Non-Kmart Borrowers are true and correct as to the undersigned as of the date
hereof.
2. By the execution and delivery of this Additional Borrower Agreement
by the undersigned, the undersigned hereby agrees to be bound by, and to comply
with and perform, all of the covenants, terms and conditions as set forth in
the Credit Agreement and the other Loan Documents from and after the date
hereof in the same manner and to the same extent as if the undersigned were an
original signatory party thereto.
3. The undersigned acknowledges that it is a condition precedent to
the effectiveness of this Additional Borrower Agreement that the Documentation
Agent shall have received copies of such Organizational Documents,
certificates, opinions and other documents as may be requested by the
Documentation Agent with respect to the undersigned.
104
4. Upon execution and delivery of this Additional Borrower Agreement
by the undersigned, duly acknowledged by Kmart Corporation as Guarantor, and
the acceptance hereby of the Documentation Agent, the undersigned shall be a
Borrower under the Credit Agreement to the same extent as if the undersigned
were an original signatory party thereto.
5. The address to which all notices to the undersigned under the
Credit Agreement should be directed is:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
6. This instrument shall be construed in accordance with and governed
by the laws of the state of New York.
Intending to be legally bound by the terms and conditions of the Credit
Agreement and all of the other Loan Documents, the undersigned hereby executes
and delivers this Additional Borrower Agreement.
Very truly yours,
(BORROWER]
By: __________________________________
Its: _________________________________
2
105
GUARANTOR ACKNOWLEDGEMENT AND REAFFIRMATION
Kmart Corporation (the "Guarantor") hereby acknowledges and agrees that
shall be an Eligible Borrower for purposes of the Credit Agreement and further
acknowledges and agrees that the Guaranty, dated as of October ____, 1994 (the
"Guaranty"), made by Kmart Corporation in favor of the Lenders (as defined
therein) is in full force and effect and that the Guarantied Obligations (as
such term is defined in the Guaranty) shall apply to and include all Loans made
to such Borrower and all other Obligations of such Borrower. The Guarantor
further acknowledges and agrees that all of its obligations under the Guaranty
(including, without limitation, obligations pursuant to the preceding sentence)
shall be valid and enforceable and shall not be impaired by the execution,
delivery and effectiveness of this Additional Borrower Agreement and that the
Guaranty shall remain in full force and effect and is hereby reaffirmed,
confirmed and ratified in all respects as of the date hereof.
KMART CORPORATION, a Michigan
corporation
By: _____________________________________
Its: ____________________________________
Dated: __________________________________
Receipt of this Additional Borrower Agreement is hereby
acknowledged on and as of the date hereof.
BANKERS TRUST COMPANY, as
Documentation Agent
By: ______________________________________
Its: _____________________________________
Dated: ___________________________________
3
106
EXHIBIT B - FORM OF ASSIGNMENT
This Assignment is made this ________ day of __________________, 199__
by ________________________________, a ___________________________
(hereinafter called the "Undersigned"), to Bankers Trust Company, a
New York state banking corporation, as Documentation Agent under the
Credit Agreement referred to below (the "Documentation Agent") for the
benefit of the "Banks" (as defined below).
W I T N E S S E T H:
WHEREAS, the Undersigned is a Borrower under that certain Warehouse
Facility Credit Agreement dated as of October 7, 1994 by and among the
Undersigned, the other "Borrowers" thereunder, the financial institutions
signatories thereto (the "Banks") and Bankers Trust Company, as the
Documentation Agent (the same, as amended, restated, modified or supplemented
and in effect from time to time, being herein referred to as the "Credit
Agreement") and, in connection therewith, the Undersigned desires to borrow
funds thereunder with respect to that certain project located in ______________
and commonly known as _____________________________ and a legal description of
which is set forth on Exhibit A attached hereto and made a part hereof
(the "Project") and has executed and delivered to the Documentation Agent that
certain promissory note payable to the order of the Documentation Agent for
the benefit of the Banks in the principal sum of ____________ Dollars ($______)
(the "Note") evidencing the Loans to be made by the Banks with
respect to the Project; and
WHEREAS, it is a condition precedent to the obligations of the Banks to
make the Loans to the Undersigned under the Credit Agreement that the
Undersigned execute this Assignment in favor of the Documentation Agent for the
benefit of the Banks for the purpose of securing the Note and the Loans
evidenced thereby and the other obligations and indebtedness of the Undersigned
under the Credit Agreement;
NOW, THEREFORE, the Undersigned agrees as follows:
1. Assignment and Grant of Security Interest. For and in consideration
of these presents and the mutual agreements herein contained and as security to
the Documentation Agent for the benefit of the Banks for the obligations of the
Undersigned under the Note, the Credit Agreement and the other Loan Documents
referred to therein, whether now existing or hereafter arising, the Undersigned
does hereby sell, assign and transfer unto the Documentation Agent, for the
benefit of the Banks, and grant to the Documentation Agent a lien on and
security interest in:
Prepared by and upon recording return to:
_________________________________________
_________________________________________
_________________________________________
_________________________________________
107
(a) All right, title and interest of the Undersigned in, to
and under that certain [Agreement to Purchase Upon Completion] dated as
of _____________, 199_ between the Undersigned and Kmart Corporation
(the same, as it may be amended, restated, modified or supplemented and
in effect from time to time, being herein referred to as the "APUC"),
including, without limitation, the right of the Undersigned thereunder
to require Kmart Corporation to purchase the Project, and all proceeds
thereof; and
(b) All the rents, issues and profits now due and which may
hereafter become due by virtue of any lease, whether written or verbal,
or any letting of, or of any agreement for the use or occupancy of the
Project or any part thereof, which may have been heretofore or may be
hereafter made or agreed to, including, without limitation, that
certain [Lease] dated as of _________, 199_ between the Undersigned, as
lessor and [Kmart Corporation or name of Kmart Subsidiary which is
lessee], as lessee (the same, as amended, restated, modified or
supplemented and in effect from time to time, being herein referred to
as the "Kmart Lease"), or which may be made or agreed to by the
Documentation Agent under the powers herein granted, it being the
intention hereby to establish an absolute transfer and assignment of
all the rents, issues and profits from said leases and agreements, and
all the avails thereof (including all amounts payable under the Kmart
Lease), to the Documentation Agent for the benefit of the Banks, and
the Undersigned does hereby appoint irrevocably the Documentation Agent
its true and lawful attorney in its name and stead (with or without
taking possession of the aforesaid premises), to rent, lease or let all
or any portion of said premises to any party or parties at such rental
and upon such term, in its discretion as it may determine, and to
collect all of said avails, rents, issues and profits arising from or
accruing any time hereafter, and all now due, or that may hereafter
become due under each and all of the leases and agreements, written or
verbal, or other tenancy existing or which may hereafter exist on said
premises, with the same rights and powers and subject to the same
immunities, exoneration of liability and rights of recourse and
indemnity as the Documentation Agent would have upon taking possession
of the said premises pursuant to the provisions hereinafter set forth.
Nothing herein contained shall be construed as constituting the Documentation
Agent a "Mortgagee in Possession" in the absence of the taking of actual
possession of the said premises by the Documentation Agent pursuant to the
provisions hereinafter contained. In the exercise of the power herein granted
the Documentation Agent, no liability shall be asserted or enforced against the
Documentation Agent, all such liability being expressly waived and released by
the Undersigned.
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2. Representations, Warranties and Covenants. (a) The Undersigned
represents and warrants to the Documentation Agent and the Banks that a true
and correct copy of each of the APUC and the Kmart Lease, as currently in
effect, has been delivered to the Documentation Agent, and that the APUC and
the Kmart Lease are each in full force and effect and no party to either
thereof is in default thereunder. The Undersigned further represents, warrants
and agrees that no rent has been or will be paid by any Person in possession of
any portion of the above described Project for more than one installment in
advance and that the payment of none of the rents to accrue for any portion of
said Project has been or will be waived, released, reduced, or discounted, or
otherwise discharged or compromised by the Undersigned. The Undersigned waives
any right of set off against any Person in possession of any portion of the
above described Project.
(b) The Undersigned further agrees that it will not assign any of the
rents or profits of the Project or any right to receive payments under the APUC
or the Kmart Lease or with respect to the Project except pursuant hereto. The
Undersigned further agrees that, without the prior written consent of the
Documentation Agent:
(i) the Undersigned will not enter into or consent to any
modification of or amendment to the APUC or any lease, verbal or
written, of all or any part of the Project;
(ii) the Undersigned will not waive or otherwise relinquish any
right of the Undersigned under the APUC or any lease, verbal or
written, of all or any part of the Project;
(iii) the Undersigned will duly perform on a timely basis
each and every obligation of the Undersigned under the APUC and each
lease, verbal or written, of all or any part of the Project;
(iv) the Undersigned will promptly notify the Documentation
Agent of the occurrence of any default by the Undersigned or any other
party thereto under the APUC or any lease, verbal or written, of all
or any part of the Project.
(c) The Undersigned further agrees to assign and transfer to the
Documentation Agent the rents, issues and profits from all future leases upon
all or any part of the above described premises and to execute and deliver,
immediately upon the request of the Documentation Agent, all such further
assurances and assignment in the premises as the Documentation Agent shall from
time to time require.
(d) Although it is the intention of the parties that this Assignment
shall be a present assignment, it is expressly understood and agreed, anything
herein contained to the contrary notwithstanding, that the Documentation Agent
shall not exercise
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any of the rights and powers conferred upon it herein, other than to receive
directly the payment of all rents payable with respect to the Project and any
purchase price proceeds under the APUC for application to the obligations of
the Undersigned under the Credit Agreement and the Note, until and unless a
default shall occur in the payment of interest or principal due under the Note
or in the performance or observance of any of the terms or conditions or
representations, warranties and covenants of the Undersigned in the Credit
Agreement or any other instrument, document or agreement now or at any time
securing said Note or the debt secured or evidenced thereby or by any extension
thereof and nothing herein contained shall be deemed to affect or impair any
rights which the Documentation Agent and the Banks may have under the Credit
Agreement and the Note or any other such instrument, document or agreement.
(e) In any case of occurrence of a Borrower Event of Default with
respect to the Undersigned or a Guarantor Event of Default under the provisions
of the above described Credit Agreement, whether before or after the entire
principal sum secured hereby is declared to be immediately due, forthwith, upon
demand of the Documentation Agent, the Undersigned agrees to surrender to the
Documentation Agent and the Documentation Agent shall be entitled to take
actual possession of, personally, or by its agents or attorneys, and
Documentation Agent in its discretion may, with or without force and with or
without process of law, take and maintain possession of all or any part of, the
documents, books, records, papers and accounts of the Undersigned relating to
the Project, and may exclude the Undersigned, its agents or servants, wholly
therefrom and may as attorney in fact or agent of the Undersigned, or in its
own name as Documentation Agent and under the powers herein granted, enforce
all rights of the Undersigned in respect of the APUC and all leases and other
rights assigned hereby, either personally or by its agents, with full power to
use such measures, legal or equitable, as in its discretion or in the
discretion of its successors or assigns may be deemed proper or necessary to
enforce the payment of security of the avails, rents, issues, and profits of
the premises, including actions for the recovery of rent, actions in forcible
detainer and actions in distress or rent, hereby granting full power and
authority to exercise each and every of the rights, privileges and powers
herein granted at any and all times hereafter, without notice to the
Undersigned, and with full power to cancel or terminate any lease or sublease
for any cause or on any ground which would entitle undersigned to cancel the
same, to make all necessary or proper repairs, decorating, renewals,
replacements, alterations, additions, betterments and improvements to the above
described Project that may seem judicious, in its discretion, and to receive
all such avails, rents, issues and profits.
(f) The Documentation Agent shall not be obligated to perform or
discharge, nor does it hereby undertake to perform or discharge, any
obligation, duty or liability under the APUC or any
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leases or rental agreements relating to said Project, and the Undersigned shall
and does hereby agree to indemnify and hold the Documentation Agent harmless of
and from any and all liability, loss or damage which it may or might incur
under any leases or the APUC or under or by reason of the assignment thereof
and of and from any and all claims and demands whatsoever which may be asserted
against it by reason of any alleged obligations or undertakings on its part to
perform or discharge any of the terms, covenants or agreements contained in
said leases or the APUC. Should the Documentation Agent incur any such
liability, loss or damage, under said leases or the APUC or under or by reason
of the assignment thereof, or in the defense of any claims or demands the
Undersigned agrees to reimburse the Documentation Agent for the amount thereof,
including reasonable Attorney Costs, immediately upon demand.
(g) The Documentation Agent in the exercise of the rights and powers
conferred upon it by this Assignment shall have full power to use and apply the
avails, rents, issues and profits of the Project to the payment of or on
account of the following, in such order as the Documentation Agent may
determine:
(i) To the payment of the operating expenses of said Project,
including cost of management and leasing thereof (which shall include
reasonable compensation to the Documentation Agent and its agent or
agents, if management be delegated to an agent or agents, and it shall
also include lease commissions and other compensation and expenses of
seeking and procuring tenants and entering into leases), established
claims for damages, if any, and premiums on insurance;
(ii) To the payment of taxes and special assessments now due or
which may hereafter become due on said Project;
(iii) To the payment of all repairs,, decorating, renewals,
replacements, alterations, additions, or betterments, and improvements
of said Project, including the cost from time to time of installing,
replacing refrigeration and gas or electric stoves therein, and of
placing said property in such condition as will, in the judgment of the
Documentation Agent, make it readily rentable;
(iv) To the payment of any indebtedness or other amounts owing
under the Credit Agreement or the Note; and
(v) Any excess, if any, after satisfaction in full of all of
the foregoing shall be delivered to the Undersigned.
3. Direction of Payments to Documentation Agent. The Undersigned
does further specifically and irrevocably authorize and instruct each and every
present and future lessee or tenant of the whole or any part of the above
described premises, including,
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without limitation, [Kmart Corporation or name of Kmart Subsidiary which is
lessee] to pay all rental agreed upon in any tenancy of the Project, and Kmart
Corporation to pay all amounts payable under the APUC directly to the
Documentation Agent, for the benefit of the Banks, for application as described
above. The Undersigned agrees that, concurrently with the execution of this
Assignment and from time to time hereafter as requested by the Documentation
Agent, the Undersigned will give a written letter of direction to each lessee
of the Project or any part thereof and to Kmart Corporation confirming that all
payments under any leases of the Project or the APUC shall be paid directly to
the Documentation Agent for application against the obligations of the
Undersigned to the Banks and the Documentation Agent under the Note, the Credit
Agreement and the other Loan Documents referred to therein.
4. Remedies Not Exclusive. It is understood and agreed that the
provisions set forth in this Assignment shall be deemed a special remedy given
to the Documentation Agent, and shall not be deemed exclusive of any of the
remedies granted in the above described Credit Agreement or the other Loan
Documents described therein, but shall be deemed an additional remedy and shall
be cumulative with the remedies therein granted.
It is expressly understood that no judgment or decree which may be
entered on any debt secured or intended to be secured hereby shall operate to
abrogate or lessen the effect of this instrument, but that the same shall
continue in full force and effect until the payment and discharge of any and
all indebtedness secured hereby, in whatever form the said indebtedness may be
and until the indebtedness secured hereby shall have been paid in full and all
bills incurred by virtue of the authority herein contained have been fully paid
out of rents, issues and profits of the property, or the Undersigned, or until
such time as this instrument may be voluntarily released. This instrument
shall also remain in full force and effect during the pendency of any
foreclosure proceedings, both before and after sale, until the issuance of a
deed pursuant to a foreclosure decree (unless all indebtedness secured by the
mortgage pursuant to which foreclosure occurs is fully satisfied before the
expiration of any period of redemption) .
5. Miscellaneous.
(a) THIS ASSIGNMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE
INTERNAL LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH SUCH LAWS OF SAID STATE,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.
(b) Any provision of this Assignment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
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provision in any other jurisdiction. Notwithstanding the foregoing, in lieu of
such prohibited or unenforceable provision, there shall automatically be deemed
incorporated herein (without further act or deed by any party hereto) a
provision as similar to such prohibited or unenforceable provision as possible
and as shall be enforceable and not prohibited pursuant to applicable law.
(c) No failure or delay on the part of the Documentation Agent in
exercising any right, power or remedy under this Assignment shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for in this
Assignment are cumulative and are not exclusive of any remedies that may be
available to the Documentation Agent or any Bank at law or in equity or
otherwise.
(d) Notwithstanding anything to the contrary contained herein, no
amendment, modification, supplement, termination or waiver of or to any
provision of this Assignment, nor consent to any departure by the Undersigned
therefrom, shall be effective unless the same shall be consented to in writing
by the Documentation Agent. Any amendment, modification or supplement of or to
any provision of this Assignment, any waiver of any provision of this
Assignment, and any consent to any departure by the Undersigned from the terms
of any provision of this Assignment, shall be effective only in the specific
instance and for the specific purpose for which made or given.
(e) Except where notice is specifically required by this Assignment
or by the Credit Agreement, no notice to or demand on the Undersigned in any
case shall entitle the Undersigned to any other or further notice or demand in
similar or other circumstances.
(f) The Undersigned acknowledges receipt of a copy of the Credit
Agreement and the other Loan Documents in the form in which each was executed
and delivered by the parties thereto, as in effect on the date hereof, and
agrees that such copies constitute adequate notice of all matters contained
therein and consents to the execution and delivery of such agreements and the
performance of all transactions provided for or contemplated therein; provided
that neither the Documentation Agent nor any Bank shall be obligated to furnish
to the Undersigned any copies of any amendments, modifications or supplements
or waivers with respect to the Credit Agreement or any of the other Loan
Documents.
(g) Except where telephonic instructions or notices are authorized
herein to be given, all notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto shall be in
accordance with the provisions of Section 9.3 of the Credit Agreement.
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(h) The Undersigned hereby irrevocably and unconditionally consents
and submits to the nonexclusive jurisdiction of any United States Federal or
New York State court sitting in New York County in any action or proceeding
arising out of or relating to this Assignment, and the Undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of such
action or proceeding brought against any of the Banks or the Documentation
Agent in respect of this Assignment shall be brought in such United States
Federal or New York State court. The Undersigned also irrevocably consents to
the service of any and all process in any such action or proceeding brought in
any court in or of the State of New York by the delivery of copies of such
process to the Undersigned at its address specified pursuant to Section 9.3 of
the Credit Agreement or by certified or registered mail directed to such
address.
(i) THE UNDERSIGNED AND THE DOCUMENTATION AGENT, BY ACCEPTANCE HEREOF,
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN CONNECTION WITH
ANY ACTION UNDER OR COUNTERCLAIM RELATING TO THIS ASSIGNMENT, THE CREDIT
AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND THE UNDERSIGNED AND THE DOCUMENTATION
AGENT, BY ACCEPTANCE HEREOF, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY
OBJECTION, INCLUDING WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR THAT IT OR ITS ASSETS IS
EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTIONS WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OR MAINTAINING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS. Nothing herein shall affect the right of the
Documentation Agent to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Undersigned in any
other jurisdiction.
(j) The Undersigned agrees to pay promptly on demand (i) all
reasonable costs and expenses of the Documentation Agent in connection with the
filing and recording of this Assignment and any other documents which may be
delivered in connection with this Assignment, including, without limitation,
the reasonable fees and expenses of Winston & Xxxxxx, special counsel for the
Documentation Agent, and any local counsel retained by the Documentation Agent,
with respect thereto; and (ii) from and after the occurrence of any Guarantor
Event of Default or Borrower Event of Default with respect to the Undersigned,
all costs and expenses (including reasonable Attorney Costs) of the
Documentation Agent in connection with (A) any and all amounts which
Documentation Agent may incur relative to the curing of any default resulting
from the acts or omissions of the Undersigned under this Assignment, (B) any
amendment or modification of, or waiver under, this Assignment and (C) the
enforcement of this Assignment and the preservation of the Documentation
Agent's and the Banks' rights hereunder. The obligations of the Undersigned
under this subsection shall survive the payment of the Undersigned's other
obligations hereunder and under the Credit Agreement and the other Loan
Documents and the termination of this Assignment.
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(k) Section and other headings used in this Assignment are for
convenience only and shall not affect the construction of this Assignment.
(l) Whenever the word "Undersigned" is mentioned herein, it is
hereby understood that the same includes and shall be binding upon successors
and assigns (including successors by consolidation) of the Undersigned, and any
party or parties holding title to the above described Project by, through or
under the Undersigned. All of the rights, powers, privileges and immunities
herein granted and assigned to the Documentation Agent, for the benefit of the
Banks, shall also inure to its successors and assigns.
(m) Capitalized terms which are used herein and are not otherwise
defined herein are used with the meanings given such terms in the Credit
Agreement.
IN WITNESS WHEREOF the Undersigned has executed and delivered
this instrument as of this day of , 199 .
[NAME OF BORROWER)
By:
Its:
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STATE OF )
) ss
COUNTY OF )
I, the undersigned, a Notary Public in and for the State of
, hereby certify that on this day of ,
199_, personally appeared before me to me known
to be the individual described in and who executed the foregoing instrument
as of , a ,
and acknowledged that he signed and sealed the same as his free and voluntary
act and deed and as the free and voluntary act and deed of said company, for
the uses and purposes therein mentioned.
Given under my hand and official seal the day and year first above written.
______________________________________
Notary Public
My commission expires:
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STATE OF )
) ss
COUNTY OF )
On this day of , 199 , before me, the undersigned, a
Notary Public in and for the State of , personally appeared
to me personally known, who, being duly sworn, did say that he
executed and delivered the foregoing instrument as his free and voluntary act
and as the free and voluntary act of .
IN TESTIMONY WHEREOF, I have hereunto set by hand and affixed my
official seal in the County and State aforesaid, the day and year first above
written.
_________________________________
Notary Public
My term expires:
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EXHIBIT A
(Legal Description)
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EXHIBIT C
FORM OF NOTICE OF BORROWING
______________________, 19_____
Bankers Trust Company
as Documentation Agent
Real Estate Finance Group, Floor 23W
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain warehouse Facility Credit
Agreement dated as of October 7, 1994 (as the same may be amended, restated,
modified or supplemented, the Credit Agreement") among the "Borrowers" (as
defined therein) including the undersigned Borrower, the "Banks" (as defined
therein) and Bankers Trust Company, as Documentation Agent. All capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Credit Agreement.
Pursuant to Section 2.5(a) of the Credit Agreement, the undersigned
Borrower ("Borrower") hereby gives notice that it desires to borrow an
aggregate principal amount of $ (the "Borrowing"). The Borrowing
(is] [is not] a Project Borrowing. [N.B. only Kmart Corporation may make
Borrowings which are not Project Borrowings.]
[N.B. If the Borrowing is a Project Borrowing, include the following:] As a
condition precedent to the Borrowing, Borrower hereby acknowledges that this
Notice of Borrowing and acceptance by Borrower of proceeds of the Borrowing
contemplated hereby constitute a representation and warranty that all
applicable conditions with respect to the Borrowing requested hereby contained
in Section 6.2 and in Section 6.3 the Credit Agreement have been satisfied.
In order to induce Documentation Agent and each Bank to disburse
proceeds of the Borrowing requested hereby, Borrower hereby further certifies,
represents and warrants to Documentation Agent and each Bank as follows, which
certifications, representations and warranties shall have the same force and
effect as if made in the Credit Agreement:
1. The Project is completed in compliance in all material respects with all
applicable building codes, zoning ordinances, environmental protection,
health and safety laws
119
and regulations and other laws, ordinances and regulations governing the
construction, development, use and operation of the Project, and all
required certificates of occupancy and other governmental approvals and
permits relating thereto have been issued.
2. Payoff Letters from all existing lenders with respect to the Project have
been provided to the Documentation Agent and a sufficient portion of the
proceeds of the Borrowing shall be used by Borrower to repay such existing
lenders and obtain releases of all liens of any of them with respect to
the Project.
3. A current title report confirming that no Person other than the lenders
referred to in 2 above has a lien of record with respect to the Project
has been delivered to the Documentation Agent.
4. Borrower is currently maintaining insurance with respect to the Project in
accordance with the requirements of the Credit Agreement.
Very truly yours,
[BORROWER]
By:
Its:
2
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EXHIBIT D
FORM OF NOTICE OF CONTINUATION/CONVERSION
___________________, 19_____
Bankers Trust Company
as Documentation Agent
Real Estate Finance Group, Floor 23W
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: __________________________
Ladies and Gentlemen:
Reference is hereby made to that certain Warehouse Facility Credit
Agreement dated as of October 7, 1994 (as the same may be amended, restated,
modified or supplemented, the Credit Agreement") among the "Borrowers" (as
defined therein) including the undersigned Borrower, the "Banks" (as defined
therein) and Bankers Trust Company, as Documentation Agent. All capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Credit Agreement.
Pursuant to Section 2.6 of the Credit Agreement, the undersigned Kmart
Corporation, as agent for the Borrower(s) identified below hereby gives notice
irrevocably of the (conversion] (continuation] of the Loans specified herein:
(1) The [Conversion Date] [Continuation Date] is ________________,
19__.
(2) The aggregate amount of the Loans to be [converted]
[continued] is $ ______________________. The Borrower(s) and separate
amounts of such Loans are as follows:
[name(s) of Borrower(s) and amount(s) of Loan]
(3) The Loans are to be [converted into] [continued as] [LIBOR]
[CD Rate] [Reference Rate] Loans.
(4) Unless the Loans are to be converted into Reference Rate
Loans, the duration of the Interest Period for the Loans included
in the [conversion] [continuation] shall be ________ [months] [days].
The undersigned hereby certifies that no Unmatured Guarantor Event of Default
or Guarantor Event of Default, and no Unmatured Borrower Event of Default or
Borrower Event of Default as to any Borrower of any Loan to be continued or
converted hereby as a LIBOR
121
Loan or a CD Rate Loan, exists as of the date hereof and no such Unmatured
Guarantor Event of Default, Unmatured Borrower Event of Default, Guarantor
Event of Default or Borrower Event of Default will exist or shall result from
such proposed Borrowing on the date of the proposed Borrowing, before and after
giving effect thereto and to the application of the proceeds therefrom.
KMART CORPORATION,
as Agent for the Borrowers
By:________________________
Title:_____________________
2
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EXHIBIT E
FORM OF PROMISSORY NOTE
$___________________________ ____________________, 000__
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, ___________________________, a
__________________________ ("Borrower"), promises to pay to the order of
Bankers Trust Company, as Documentation Agent for the "Banks" (as defined in
the Credit Agreement referred to below) ("Payee"), on or before the Termination
Date (as defined in the Credit Agreement referred to below), the principal sum
of___________________________________ Dollars ($_______________________).
Borrower also promises to pay interest on the unpaid principal amount
hereof from the date hereof until paid at the rates, at the times and from the
dates which shall be determined in accordance with the provisions of that
certain Warehouse Facility Credit Agreement dated as of October 7, 1994 (as the
same may be amended, restated, modified or supplemented and in effect from time
to time, the "Credit Agreement") among the Borrower, certain other "Borrowers"
named therein, the "Banks" named therein and Bankers Trust Company, as
Documentation Agent. Capitalized terms used herein without definition shall
have the meanings set forth in the Credit Agreement.
This Note is issued pursuant to and entitled to the benefits of the
Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
are made and are to be repaid.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds at
the office of Payee located at One Bankers Trust Plaza, New York, New York or
at such other place as shall be designated in writing by Payee for such purpose
in accordance with the terms of the Credit Agreement. Until notified in
writing of the transfer of this Note in accordance with the terms of the Credit
Agreement, Borrower shall be entitled to deem Payee, or such other Person who
has been so identified by the transferor in writing to Borrower as the owner
and holder of this Note, as the owner and holder of this Note. Each of Payee
and any subsequent holder of this Note agrees, by its acceptance hereof, that
before disposing of this Note or any part hereof it will make a notation hereon
of all advances and principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any advance under or payment made on this Note
shall not limit or otherwise affect the obligation of Borrower hereunder with
respect to payments of principal or interest on this Note.
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Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided, however, that in the event that
the day on which payment relating to a LIBOR Loan is due is not a Business Day
but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day.
This Note is subject to mandatory prepayment as provided in subsection
2.12 of the Credit Agreement and to prepayment at the option of the Borrower as
provided in subsection 2.11 of the Credit Agreement.
The Credit Agreement and this Note shall be governed and shall be
construed and enforced in accordance with the internal laws (as opposed to
conflict of laws principles) and decisions of the State of New York.
Upon the occurrence of a Guarantor Event of Default or occurrence of a
Borrower Event of Default as to Borrower, the unpaid balance of the principal
amount of this Note may become, or may be declared to be, due and payable in
the manner, upon the conditions and with the effect provided in the Credit
Agreement.
Borrower promises to pay all costs and expenses, including reasonable
Attorney Costs, all as provided in subsection 9.5 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Borrower hereby
consents to renewals and extensions of time at or after the maturity hereof,
without notice, and hereby waives diligence, presentment, protest, demand and
notice of every kind to the fullest extent permitted by law.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered by its duly authorized officer as of the day and year and at the
place first written above.
[NAME OF BORROWER]
By:______________________________
Its:_____________________________
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TRANSACTIONS ON NOTE
Outstanding
Type of Amount of Amount of Principal
Date Loan Made Loan Made Principal Balance Notation
Made This Date This Date Paid This Date This Date Made By
---- ----------- ----------- -------------- ------------ --------
-3-
125
EXHIBIT F
FORM OF ALLOCATION REQUEST
_________________, 19____
Bankers Trust Company
as Documentation Agent
Real Estate Finance Group, Floor 23W
000 Xxxx Xxxxxx
Xxx Xxxx Xxx Xxxx 00000
Attention:
Ladies and Gentlemen:
Reference is hereby made to that certain warehouse Facility Credit
Agreement dated as of October 7, 1994 (as the same may be amended, restated,
modified or supplemented, the Credit Agreement") among the "Borrowers" (as
defined therein), including the undersigned Borrower, the "Banks" (as defined
therein) and Bankers Trust Company, as Documentation Agent. All capitalized
terms used but not otherwise defined herein shall have the meanings ascribed
thereto in the Credit Agreement.
This letter constitutes an Allocation Request pursuant to Section
2.3(a) of the Credit Agreement. [Subject to the terms of Section 2.3 of the
Credit Agreement, the undersigned ("Borrower") hereby submits this Allocation
Request with respect to that certain project located in
commonly known as
(the "Project") . In accordance with Section 2.3 of the Credit Agreement,
Borrower hereby requests that the aggregate amount of $
of the now Unallocated Total Commitment be allocated to the Project. Borrower
hereby certifies that attached hereto are true and correct copies of Payoff
Letters from each existing lender with respect to such Project and a title
report with respect to such Project confirming that no Person other than such
existing lenders have liens of record against such Project.]*/
Also accompanying this Allocation Request is an initial Note executed
by the undersigned Borrower, dated the date of the requested Borrowing, and
payable to the order of the Documentation Agent for the benefit of the Banks in
the amount of the (Project Commitment) [Non-Project Commitment) requested
hereby.
*/ Delete if Kmart Borrower is requesting a Non-Project Commitment.
126
Borrower hereby certifies that the representations and warranties
contained in the Credit Agreement with respect to itself [and the Project] are
true and correct in all material respects as of the date hereof as though made
on and as of the date hereof and that no Guarantor Event of Default exists and
no Borrower Event of Default with respect to the Borrower identified herein
exists.
Very truly yours,
[BORROWER]
By: ___________________________________
Its:___________________________________
**/ [GUARANTOR ACKNOWLEDGEMENT AND REAFFIRMATION
Pursuant to the terms of Section 2.3 of the Credit Agreement, Kmart
Corporation ("Guarantor") pursuant to that certain Guaranty dated as of October
__, 1994 made by Guarantor in favor of the Lenders (as defined therein), hereby
approves this Allocation Request in all respects. Guarantor further
acknowledges and agrees that all of its obligations under the Guaranty
(including, without limitation, obligations incurred in connection with Loans
for the Project identified in this Allocation Request) shall be valid and
enforceable and shall not be impaired by the execution, delivery and
effectiveness of this Allocation Request; and further, that the Guaranty shall
remain in full force and effect and is hereby reaffirmed, confirmed and
ratified in all respects as of the date hereof.
KMART CORPORATION, a Michigan
corporation
By:_____________________________________
Its:___________________________________
**/ Delete if the Borrower is Kmart Corporation.
2
127
EXHIBIT G
FORM OF NOTICE OF SWINGLINE BORROWING
________________, 19____
Bankers Trust Company
as Swingline Lender
and Documentation Agent
Real Estate Finance Group, Floor 23W
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ________________
Ladies and Gentlemen:
Reference is hereby made to that certain Warehouse Facility Credit
Agreement dated as of October 7, 1994 (as the same may be amended, restated,
modified or supplemented, the Credit Agreement") among the "Borrowers" (as
defined therein) including the undersigned Borrower, the "Banks" (as defined
therein) and Bankers Trust Company, as Swingline Lender and as Documentation
Agent. All capitalized terms used but not otherwise defined herein shall have
the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 2.1(c) of the Credit Agreement, the undersigned
Borrower ("Borrower") hereby gives notice that it desires to borrow a Swingline
Loan in the principal amount of $________________ (the "Borrowing"). The
Borrowing [is] [is not] a Project Borrowing. [N.B. only Kmart Corporation may
make Borrowings which are not Project Borrowings.]
As a condition precedent to the Borrowing, Borrower hereby
acknowledges that this Notice of Borrowing and acceptance by Borrower of
proceeds of the Borrowing contemplated hereby constitute a representation and
warranty that all applicable conditions with respect to the Borrowing requested
hereby contained in Section 6.2 and in Section 6.3 the Credit Agreement have
been satisfied.
[N.B. If the Borrowing is a Project Borrowing, include the following:] In order
to induce Swingline Lender to disburse proceeds of the Borrowing requested
hereby, Borrower hereby further certifies, represents and warrants as
follows, which certifications, representations and warranties shall have the
same force and effect as if made in the Credit Agreement:
1. The Project is completed in compliance in all material respects with
all applicable building codes, zoning ordinances, environmental
protection, health and safety laws
128
and regulations and other laws, ordinances and regulations governing
the construction, development, use and operation of the Project, and
all required certificates of occupancy and other governmental
approvals and permits relating thereto have been issued.
2. Payoff Letters from all existing lenders with respect to the Project
have been provided to the Documentation Agent and a sufficient portion
of the proceeds of the Borrowing shall be used by Borrower to repay
such existing lenders and obtain releases of all liens of any of them
with respect to the Project.
3. A current title report confirming that no Person other than the lenders
referred to in 2 above has a lien of record with respect to the
Project has been delivered to the Documentation Agent.
4. Borrower is currently maintaining insurance with respect to the
Project in accordance with the requirements of the Credit Agreement.
Very truly yours,
[BORROWER]
By: ___________________________________
Its:___________________________________
2
129
SCHEDULE 4.2(c) -- CONSENTS AND APPROVALS
None.
130
SCHEDULE 5.4(c)
EXISTING MORTGAGES, SECURITY INTEREST AND LIENS ON ASSETS OF KMART CORPORATION
EXISTING ON THE CLOSING DATE
Liens/Security Interests/Mortgages on PACE properties
Current Mortgages existing on Kmart Corporation's properties as of
September 21, 1994 was $336 million
Kmart Corporation has guaranteed indebtedness related to certain of its
properties financed by industrial revenue bonds. At January 26, 1994, the
total amount of such guaranteed indebtedness was $284 million, of which $92
million was included in capital lease obligations.
