EXHIBIT 10.36
SECOND AMENDMENT TO LETTER OF CREDIT AGREEMENT
This Second Amendment to Letter of Credit Agreement (the "Second
Amendment") is made as of the 23RD day of December, 2004 by and among
KMART CORPORATION ("Kmart"), a corporation organized under the laws of the
State of Michigan having a place of business at 0000 Xxxx Xxx Xxxxxx Xxxx,
Xxxx, Xxxxxxxx 00000,
BANK OF AMERICA, NATIONAL ASSOCIATION ("BOA"), a national banking
association having a place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000;
FLEET NATIONAL BANK ("Fleet" and together with BOA, the "Issuing Banks"), a
national banking association having a place of business at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
WITNESSETH
WHEREAS, Kmart and the Issuing Banks have entered into a Letter of Credit
Agreement dated as of August 13, 2004 (as amended and in effect, the "Credit
Agreement"); and
WHEREAS, Kmart and the Issuing Banks have agreed to amend certain
provisions of the Credit Agreement as set forth herein.
NOW THEREFORE, it is hereby agreed as follows:
1. Definitions: All capitalized terms used herein and not otherwise defined
shall have the same meaning herein as in the Credit Agreement.
2. Amendments to Article 1. The provisions of Article 1 of the Credit
Agreement are hereby amended as follows:
a. The definition of "Availability" is hereby deleted in its entirety and
the following substituted in its stead.
"Availability" means, at anytime of determination, (i) except as
provided in clause (ii) below, an amount equal to the difference
between the amounts on deposit in the Cash Collateral Account and
100.5% of the Letter of Credit Outstandings, or (ii) if the
Inventory Collateral Election Effective Date has occurred, the
difference between the Borrowing Base and 100.5% of the Letter of
Credit Outstandings.
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b. The definition of "Commitment" is hereby deleted in its entirety and
the following substituted in its stead:
"Commitment" means $600,000,000, or such lesser amount on account of a
reduction thereof in accordance with the provisions of Section 2.11
hereof.
3. Amendments to Article 2. The provisions of Article 2 of the Credit
Agreement are hereby amended as follows:
a. The provisions of Section 2.07 of the Credit Agreement are hereby
deleted in their entirety and the following substituted in their
stead:
Kmart or the Subsidiary Credit Parties shall pay to the Issuing Banks,
an unused fee (the "Unused Fee") equal to 0.125% per annum (on the
basis of actual days elapsed in a year of 360 days) of the average
daily balance of the Unused Commitment for each day and ending on but
excluding the Termination Date. The Unused Fee so accrued in any
calendar month shall be payable on the first Business Day of the
immediately succeeding calendar month, except that all Unused Fees so
accrued and unpaid as of the Termination Date shall be payable on the
Termination Date.
b. The provisions of Section 2.09 of the Credit Agreement are hereby
amended by deleting clause (a) in its entirety and substituting the
following in its stead:
(a) an upfront fee in the sum of $600,000, fully earned on the Closing
Date, of which $200,000 shall be payable on the Closing Date and the
balance of $400,000 shall be paid on January 7, 2005, provided that if
Kmart elects to increase Availability to an amount in excess of
$200,000,000, a pro rata portion of the unpaid balance of the Closing
Fee (determined by (i) dividing the amount of increase in Availability
by (ii) $400,000,000 less the amount of any prior increase in
Availability in excess of $200,000,000 for which a portion of the
Closing Fee was paid and (iii) multiplying the result by the unpaid
balance of the Closing Fee) shall be payable on the effective date of
each such increase, and
4. Amendments to Article 5. The provisions of Article 5 of the Credit
Agreement are hereby amended as follows:
a. The provisions of Section 5.06 of the Credit Agreement are hereby
deleted in their entirety and the following substituted in their
stead:
Kmart shall cause the amounts on deposit in the Cash Collateral
Account to be at least equal to 100.5% of the Letter of Credit
Outstandings.
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b. The provisions of Section 5.07 of the Credit Agreement are hereby
deleted in their entirety and the following substituted in their
stead:
Intentionally Omitted.
c. The provisions of Section 5.10 of the Credit Agreement are hereby
deleted in their entirety and the following substituted in their
stead:
Intentionally Omitted.
5. Conditions to Effectiveness. This Second Amendment shall not be effective
until each of the following conditions precedent have been fulfilled to the
satisfaction of the Issuing Banks:
a. This Second Amendment shall have been duly executed and delivered by
the Kmart and the Issuing Banks.
b. Kmart shall reimburse the Issuing Banks for all expenses incurred by
the Issuing Banks in connection herewith, including, without
limitation, reasonable attorneys' fees.
c. No Default or Event of Default shall have occurred and be continuing.
6. Miscellaneous.
a. Except as provided herein, all terms and conditions of the Credit
Agreement and the other Credit Documents remain in full force and
effect. Kmart hereby ratifies, confirms, and reaffirms all of the
representations, warranties and covenants therein contained.
b. This Second Amendment may be executed in several counterparts and by
each party on a separate counterpart, each of which when so executed
and delivered, each shall be an original, and all of which together
shall constitute one instrument. Delivery of an executed counterpart
of a signature page hereto by telecopy shall be effective as delivery
of a manually executed counterpart hereof.
c. This Second Amendment expresses the entire understanding of the
parties with respect to the matters set forth herein and supersedes
all prior discussions or negotiations hereon.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be executed and their seals to be hereto affixed as the date first above
written.
KMART CORPORATION
By /s/ XXXXX XXXXX
-------------------------------------
Print Name: XXXXX XXXXX
Title: VP TREASURER
FLEET NATIONAL BANK
By /s/ Xxxxxx Xxxxx
-------------------------------------
Print Name: Xxxxxx Xxxxx
Title: Director
BANK OF AMERICA, NATIONAL ASSOCIATION
By /s/ Xxxxxx Xxxxx
-------------------------------------
Print Name: Xxxxxx Xxxxx
Title: Director
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