Exhibit 1.1
$430,000,000
KMART CORPORATION
9 7/8% NOTES DUE 2008
PURCHASE AGREEMENT
June 14, 2001
CREDIT SUISSE FIRST BOSTON CORPORATION,
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
As Representatives of the Several Purchasers,
c/o Credit Suisse First Boston Corporation,
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
1. Introductory. Kmart Corporation, a Michigan corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule A hereto
(the "Purchasers") U.S.$430,000,000 principal amount of its 9 7/8% Notes
due 2008 ("Offered Securities"). The Offered Securities will be issued
under an indenture, dated as of December 13, 1999, as supplemented by a
third supplemental indenture, dated as of June 19, 2001 (collectively, the
"Indenture"), between the Company and The Bank of New York, as Trustee. The
United States Securities Act of 1933 is herein referred to as the
"Securities Act." Pursuant to the Registration Rights Agreement, to be
dated June 19, 2001, among the Company and the Purchasers (the
"Registration Rights Agreement"), the Offered Securities will be exchanged
for securities identical in all material respects to the Offered Securities
and registered under the Securities Act (the "Exchange Securities").
The Company hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Purchasers that:
(a) A preliminary offering circular and an offering
circular relating to the Offered Securities to be offered by the
Purchasers have been prepared by the Company. Such preliminary
offering circular (the "Preliminary Offering Circular") and
offering circular (the "Offering Circular"), as supplemented as of
the date of this Agreement, together with the documents
incorporated by reference therein and any other document approved
by the Company for use in connection with the contemplated resale
of the Offered Securities are hereinafter collectively referred to
as the "Offering Document." On the date of this Agreement, the
Offering Document does not include any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Offering Document based upon
written information furnished to the Company by any Purchaser
through Credit Suisse First Boston Corporation ("CSFBC")
specifically for use therein, it being understood and agreed that
the only such information is that described as such in Section
7(b) hereof. Except as disclosed in the Offering Document, on the
date of this Agreement, the Company's Annual Report on Form 10-K
most recently filed with the Securities and Exchange Commission
(the "Commission") and all subsequent reports (collectively, the
"Exchange Act Reports") which have been filed by the Company with
the Commission or sent to stockholders pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act") do not include any
untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such
documents, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder.
(b) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of Michigan, has the corporate power and authority to own
its property and conduct its business as described in the Offering
Document and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(c) Each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its property and
conduct its business as described in the Offering Document and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Registration Rights Agreement has been duly
authorized by the Company and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will
constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms
except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to creditors' rights
generally and by general principles of equity.
(f) The Indenture has been duly authorized by the
Company, and upon execution and delivery by the Company, and
assuming due authorization, execution and delivery thereof by the
Trustee, the Indenture will be a valid and binding agreement of
the Company, enforceable against the Company in accordance with
its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to
creditors' rights generally and by general principles of equity.
(g) The Offered Securities have been duly authorized and,
when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Purchasers
in accordance with the terms of this Agreement, will be entitled
to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their
terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to
creditors' rights generally and by general principles of equity.
The Exchange Securities have been duly authorized and, when
executed by the Company and, when authenticated, issued and
delivered in exchange for the Offered Securities pursuant to the
Exchange Offer (as defined in the Registration Rights Agreement)
will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in
accordance with their terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and by general principles
of equity.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this
Agreement, the Indenture and the Registration Rights Agreement and
the issuance and sale of the Offered Securities and the issuance
of the Exchange Securities will not contravene any provision of
applicable law or the certificate of incorporation or by-laws of
the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company
and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over the Company or any subsidiary, except such
contraventions as would not in the aggregate have a material
adverse effect on the Company and its subsidiaries, taken as a
whole, and no consent, approval, authorization or order of, or
qualification with, any governmental agency or body is required
for the performance by the Company of its obligations under this
Agreement, the Indenture and the Registration Rights Agreement or
the issuance or sale of the Offered Securities or the issuance of
the Exchange Securities, except for the order of the Commission
declaring the Exchange Offer Registration Statement or the Shelf
Registration Statement effective and except such as may be
required by the securities or Blue Sky laws of the various states
and the securities laws of the jurisdictions outside the United
States in connection with the offer and sale of the Offered
Securities and Exchange Securities.
(i) Except as disclosed in the Offering Document and
except as would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole, the Company and its
subsidiaries have good and marketable title to all real properties
and all other properties and assets owned by them, in each case
free from liens, encumbrances and defects, and the Company and its
subsidiaries hold any leased real or personal property that is
material to the Company and its subsidiaries taken as a whole
under valid and enforceable leases with no exceptions.
(j) The Company and its subsidiaries (i) are, to the
Company's best knowledge, in compliance with any and all
applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Law"), (ii) have received, to the
Company's best knowledge, all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance, to the
Company's best knowledge, with all terms and conditions of any
such permit, license or approval, except where such noncompliance
with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not,
singly or in the aggregate, have a material adverse effect on the
Company and it subsidiaries, taken as a whole.
(k) Except as disclosed in the Offering Document, there
are no pending actions, suits or proceedings against or affecting
the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a
material adverse effect on the Company, or would materially and
adversely affect the ability of the Company to perform its
obligations under the Indenture, this Agreement or the
Registration Rights Agreement, or which are otherwise material in
the context of the sale of the Offered Securities; and no such
actions, suits or proceedings are threatened or, to the Company's
knowledge, contemplated.
(l) There has not occurred any material adverse change,
or any development involving a prospective material adverse
change, in the condition, financial or other, or in the earnings,
business or operations of the Company and its subsidiaries, taken
as a whole, from that set forth in the Offering Document
(exclusive of any amendments or supplements thereto subsequent to
the date of this Agreement).
(m) The Company is not and, after giving effect to the
offering and sale of Offered Securities and the application of the
proceeds thereof as described in the Offering Document, will not
be required to register as an "investment company" under the
Investment Company Act of 1940, as amended.
(n) No securities of the same class (within the meaning
of Rule 144A(d)(3) under the Securities Act) as the Offered
Securities are listed on any national securities exchange
registered under Section 6 of the Exchange Act or quoted in a U.S.
automated inter-dealer quotation system.
(o) Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf (i) has, within the
six-month period prior to the date hereof, offered or sold in the
United States or to any U.S. person (as such terms are defined in
Regulation S under the Securities Act) the Offered Securities, or
any security of the same class or series as the Offered Securities
or (ii) has offered or will offer or sell the Offered Securities
(A) in the United States by means of any form of general
solicitation or general advertising within the meaning of Rule
502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S
("Regulation S") under the Securities Act, by means of any
directed selling efforts within the meaning of Rule 902(c) of
Regulation S. The Company, its affiliates and any person acting on
its or their behalf have complied and will comply with the
offering restrictions requirement of Regulation S. The Company has
not entered and will not enter into any contractual arrangement
with respect to the distribution of the Offered Securities except
for this Agreement and the Registration Rights Agreement.
(p) Subject to (i) the accuracy of the representations
and warranties of the Purchasers in Section 4 of this Agreement,
(ii) the due performance by the Purchasers of the covenants and
agreements set forth in Section 4 of this Agreement, (iii) the
Purchasers' compliance with the offering and transfer procedures
and restrictions described in the Offering Document, (iv) the
accuracy of the representations and warranties made in accordance
with this Agreement and the Offering Document by purchasers to
whom the Purchasers initially resell the Offered Securities and
(v) that purchasers to whom the Purchasers initially resell the
Offered Securities receive a copy of the Offering Document prior
to such sale, the offer, sale and delivery of the Offered
Securities to the Purchasers in the manner contemplated by this
Agreement and the Offering Document and the initial resale of the
Offered Securities by the Purchasers in the manner contemplated in
the Offering Document and this Agreement, do not require
registration under the Securities Act, and the Indenture does not
require qualification under the United States Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act").
(q) The Company is subject to the reporting requirements
of Section 13 or Section 15(d) of the Exchange Act.
3. Purchase, Sale and Delivery of Offered Securities. On the basis
of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Company agrees to
sell to the Purchasers, and the Purchasers agree, severally and not
jointly, to purchase from the Company, at a purchase price of 98.7345% of
the principal amount thereof plus accrued interest from June 19, 2001 to
the Closing Date (as hereinafter defined), the respective principal amounts
of Securities forth opposite the names of the several Purchasers in
Schedule A hereto.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent Global Securities
in definitive form (the "Global Securities") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the
name of Cede & Co., as nominee for DTC. Interests in any permanent Global
Securities will be held only in book-entry form through DTC, except in the
limited circumstances described in the Offering Document. Payment for the
Offered Securities shall be made by the Purchasers in Federal (same day)
funds by official check or checks or wire transfer to an account at a bank
acceptable to CSFBC drawn to the order of Kmart Corporation at the office
of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP at 10:00 A.M. (New York time), on June 19, 2001, or
at such other time not later than seven full business days thereafter as
CSFBC and the Company determine, such time being herein referred to as the
"Closing Date", against delivery to the Trustee as custodian for DTC of the
Global Securities representing all of the Securities. The Global Securities
will be made available for checking at the above office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers. (a) Each
Purchaser severally represents and warrants to the Company that it is an
"accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) Each Purchaser severally acknowledges that the
Offered Securities have not been registered under the Securities
Act and may not be offered or sold within the United States except
pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act. Each
Purchaser severally represents and agrees that it has not offered
or sold, and will not offer or sell, any Offered Securities
constituting part of its allotment within the United States,
except in accordance with Rule 144A or Rule 903 under the
Securities Act. Accordingly, neither such Purchasers nor their
affiliates, nor any persons acting on its or their behalf, have
engaged or will engage in any directed selling efforts with
respect to the Offered Securities. Terms used in this subsection
(b) have the meanings given to them by Regulation S.
(c) Each Purchaser severally agrees that it and each of
its affiliates has not entered and will not enter into any
contractual arrangement with respect to the distribution of the
Offered Securities except for any such arrangements with the other
Purchasers or affiliates of the other Purchasers or with the prior
written consent of the Company.
(d) Each Purchaser severally agrees that it and each of
its affiliates will not offer or sell the Offered Securities in
the United States by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act, including, but not limited to (i) any
advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over
television or radio, or (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. Each Purchaser severally agrees, with respect to
resales made in reliance on Rule 144A of any of the Offered
Securities, to deliver either with the confirmation of such resale
or otherwise prior to settlement of such resale a notice to the
effect that the resale of such Offered Securities has been made in
reliance upon the exemption from the registration requirements of
the Securities Act provided by Rule 144A.
(e) Each Purchaser severally represents and agrees that
(i) it has not offered or sold and prior to the date six months
after the date of issue of the Offered Securities will not offer
or sell any Offered Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or
otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (ii)
it has complied and will comply with all applicable provisions of
the Financial Services ▇▇▇ ▇▇▇▇ with respect to anything done by
it in relation to the Offered Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the
Offered Securities to a person who is of a kind described in
Article 11(3) of the Financial Services ▇▇▇ ▇▇▇▇ (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom
such document may otherwise lawfully be issued or passed on.
5. Certain Agreements of the Company. The Company agrees with the
several Purchasers that:
(a) The Company will advise CSFBC promptly of any
proposal to amend or supplement the Offering Document and will not
effect such amendment or supplementation without CSFBC's consent.
If, at any time prior to the completion of the resale of the
Offered Securities by the Purchasers, any event occurs as a result
of which the Offering Document as then amended or supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, the Company promptly will notify CSFBC of
such event and promptly will prepare, at its own expense, an
amendment or supplement which will correct such statement or
omission. Neither CSFBC's consent to, nor the Purchasers' delivery
to offerees or investors of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in
Section 6.
(b) The Company will furnish to CSFBC copies of any
preliminary offering circular, the Offering Document and all
amendments and supplements to such documents, in each case as soon
as available and in such quantities as CSFBC requests. At any time
when the Company is not subject to Section 13 or 15(d) of the
Exchange Act, the Company will promptly furnish or cause to be
furnished to CSFBC (and, upon request, to each of the other
Purchasers) and, upon request of holders and prospective
purchasers of the Offered Securities, to such holders and
purchasers, copies of the information required to be delivered to
holders and prospective purchasers of the Offered Securities
pursuant to Rule 144A(d)(4) under the Securities Act (or any
successor provision thereto) in order to permit compliance with
Rule 144A in connection with resales by such holders of the
Offered Securities. The Company will pay the expenses of printing
and distributing to the Purchasers all such documents.
(c) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions as
CSFBC reasonably designates and will continue such qualifications
in effect so long as required for the resale of the Offered
Securities by the Purchasers, provided that the Company will not
be required to qualify as a foreign corporation or to file a
general consent to service of process in any such state.
(d) During the period of five years hereafter, the
Company will furnish to CSFBC and, upon request, to each of the
other Purchasers, as soon as reasonably practicable after the end
of each fiscal year, a copy of its annual report to stockholders
for such year; and the Company will furnish to CSFBC and, upon
request, to each of the other Purchasers (i) as soon as available,
a copy of each report and any definitive proxy statement of the
Company filed with the Commission under the Exchange Act or mailed
to stockholders, and (ii) from time to time, such other
information concerning the Company as CSFBC may reasonably
request.
(e) During the period of two years after the Closing
Date, the Company will, upon request, furnish to CSFBC each of the
other Purchasers and any holder of Offered Securities a copy of
the restrictions on transfer applicable to the Offered Securities.
(f) During the period of two years after the Closing
Date, the Company will not, and will not permit any of its
affiliates (as defined in Rule 144 under the Securities Act) to,
resell any of the Offered Securities that have been reacquired by
any of them.
(g) During the period of two years after the Closing
Date, the Company will not be or become, an open-end investment
company, unit investment trust or face-amount certificate company
that is or is required to be registered under Section 8 of the
Investment Company Act.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement, the Indenture
and the Registration Rights Agreement, including (i) the fees and
expenses of the Trustee and its professional advisers; (ii) all
expenses in connection with the execution, issue, authentication,
packaging and initial delivery of the Offered Securities and, as
applicable, the Exchange Securities, the preparation and printing
of this Agreement, the Registration Rights Agreement, the Offered
Securities, the Exchange Securities, the Indenture, the Offering
Document and amendments and supplements thereto, and any other
document relating to the issuance, offer, sale and delivery of the
Offered Securities and, as applicable, the Exchange Securities;
(iii) the cost of any advertising approved by the Company in
connection with the issue of the Offered Securities; (iv) for any
expenses (including reasonable fees and disbursements of counsel)
incurred in connection with qualification of the Offered
Securities or the Exchange Securities for sale under the laws of
such jurisdictions as CSFBC reasonably designates and the printing
of memoranda relating thereto; (v) for any fees charged by
investment rating agencies for the rating of the Securities or the
Exchange Securities; and (vi) for expenses incurred in
distributing preliminary offering circulars and the Offering
Document (including any amendments and supplements thereto) to the
Purchasers. The Company also will pay or reimburse the Purchasers
(to the extent incurred by them) for all travel expenses of the
Purchasers and the Company's officers and employees and any other
expenses of the Purchasers and the Company in connection with
attending or hosting meetings with prospective purchasers of the
Offered Securities from the Purchasers.
(i) In connection with the offering, until CSFBC shall
have notified the Company and the other Purchasers of the
completion of the resale of the Offered Securities, neither the
Company nor any of its affiliates has or will, either alone or
with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial
interest any Offered Securities or attempt to induce any person to
purchase any Offered Securities; and neither it nor any of its
affiliates will make bids or purchases for the purpose of creating
actual, or apparent, active trading in, or of raising the price
of, the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The
obligations of the several Purchasers to purchase and pay for the Offered
Securities will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the
statements of officers of the Company made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and
to the following additional conditions precedent:
(a) The Purchasers shall have received a letter, dated
the date of this Agreement, of PricewaterhouseCoopers LLP
confirming that they are independent public accountants within the
meaning of the Securities Act and the applicable published rules
and regulations thereunder ("Rules and Regulations") and to the
effect that:
(i) in their opinion the financial statements
examined by them and included in the Exchange Act Reports
comply as to form in all material respects with the
applicable accounting requirements of the Securities Act
and the related published Rules and Regulations;
(ii) they have performed the procedures
specified by the American Institute of Certified Public
Accountants for a review of interim financial information
as described in Statement of Auditing Standards No. 71,
Interim Financial Information, on the unaudited financial
statements included in the Exchange Act Reports;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available
interim financial statements of the Company, inquiries of
officials of the Company who have responsibility for
financial and accounting matters and other specified
procedures, nothing came to their attention that caused
them to believe that:
(A) the unaudited financial statements
included in the Exchange Act Reports do not
comply as to form in all material respects with
the applicable accounting requirements of the
Securities Act and the related published Rules
and Regulations or any material modifications
should be made to such unaudited financial
statements for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this
Agreement, there was any change in the capital
stock or any increase in short-term indebtedness
or long-term debt of the Company and its
consolidated subsidiaries or, at the date of the
latest available balance sheet read by such
accountants, there was any decrease in
consolidated total current assets or total
assets, as compared with amounts shown on the
latest balance sheet included in the Exchange
Act Reports; or
(C) for the period from the closing
date of the latest income statement included in
the Exchange Act Reports to the closing date of
the latest available income statement read by
such accountants there were any decreases, as
compared with the corresponding period of the
previous year, in consolidated sales, net
operating income or net earnings;
except in all cases set forth in clauses (B) and (C)
above for changes, increases or decreases which the
Exchange Act Reports disclose have occurred or may occur
or which are described in such letter; and
(iv) they have compared specified dollar amounts
(or percentages derived from such dollar amounts) and
other financial information contained in the Exchange Act
Reports (in each case to the extent that such dollar
amounts, percentages and other financial information are
derived from the general accounting records of the
Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are
derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such
dollar amounts, percentages and other financial
information to be in agreement with such results, except
as otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (A) any change, or any
development or event involving a prospective change, in the
condition (financial or other), business, properties or results of
operations of the Company or its subsidiaries which, in the
judgment of a majority in interest of the Purchasers including
CSFBC, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the offering or the sale
of and payment for the Offered Securities; (B) any downgrading in
the rating of any debt securities of the Company by any
"nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act), or
any public announcement that any such organization has under
surveillance or review its rating in effect on the date of this
Agreement of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating); (C)
any suspension or material limitation of trading in securities
generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (D) any banking moratorium declared by
U.S. Federal or New York authorities; or (E) any outbreak or
escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in
the judgment of a majority in interest of the Purchasers including
CSFBC, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to
proceed with completion of the offering or sale of and payment for
the Offered Securities.
(c) The Purchasers shall have received an opinion, dated
the Closing Date, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
special counsel for the Company, that:
(i) The Indenture and the Registration Rights
Agreement, assuming due authorization, execution and
delivery of the Indenture and the Registration Rights
Agreement by the respective parties thereto, will be the
valid and binding agreements of the Company, enforceable
against the Company in accordance with their respective
terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally and by
general principles of equity.
(ii) Assuming due authorization, execution and
delivery of the Indenture by the respective parties
thereto, the Offered Securities, when executed and
authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Purchasers
in accordance with the terms of this Agreement, will be
entitled to be benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable
in accordance with their terms, except as the same may be
limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws
now or hereafter in effect relating to creditors' rights
generally and by general principles of equity. Assuming
due authorization, execution and delivery of the
Indenture by the respective parties thereto, the Exchange
Securities, when executed and authenticated in accordance
with the provisions of the Indenture and issued and
delivered in accordance with the terms of the Exchange
Offer (as defined in the Registration Rights Agreement),
will be entitled to be benefits of the Indenture and will
be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as the
same may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or
other similar laws now or hereafter in effect relating to
creditors' rights generally and by general principles of
equity.
(iii) The execution and delivery by the Company
of, and the performance by the Company of its obligations
under, this Agreement, the Indenture and the Registration
Rights Agreement and the issuance and sale of the Offered
Securities and the issuance of the Exchange Securities
will not contravene any provision of Applicable Law (as
defined below), except such contraventions as would not,
individually or in the aggregate, have a material adverse
effect on the condition (financial or other), business,
properties, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, provided
that such counsel may state that they express no opinion
under this paragraph with regard to the anti-fraud
provisions of the Securities Act, the Exchange Act or the
rules and regulations thereunder or the information
contained in, the accuracy, completeness or correctness
of, or the adequacy of disclosure contained in, the
Offering Document which matters are addressed in
paragraph 6(c)(iv) below and the second paragraph
following paragraph 6(c)(vi) below; and no Governmental
Approval is required for the performance by the Company
of its obligations under this Agreement, the Indenture,
the Registration Rights Agreement, the Offered Securities
or the Exchange Securities, except such as may be
required by the securities or Blue Sky laws of the
various states and the securities laws of the
jurisdictions outside the United States in connection
with the offer and sale of the Offered Securities and
Exchange Securities.
(iv) The statements in the Offering Circular
under the captions "Description of the Notes" and "Plan
of Distribution" insofar as such statements constitute
summaries of the legal matters, documents or proceedings
referred to therein, fairly present the information
called for with respect to such legal matters, documents
and proceedings and fairly summarize the matters referred
to therein.
(v) The Company is not and, after giving effect
to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in
the Offering Document, will not be required to register
as an "investment company" under the Investment Company
Act of 1940, as amended.
(vi) Assuming (i) the accuracy of the
representations and warranties of the Company set forth
in Section 2 of this Agreement and of the Purchasers in
Section 4 of this Agreement, (ii) the due performance by
the Company of the covenants and agreements set forth in
Section 5 of this Agreement and the due performance by
the Purchasers of the covenants and agreements set forth
in Section 4 of this Agreement, (iii) the Purchasers'
compliance with the offering and transfer procedures and
restrictions described in the Offering Document, (iv) the
accuracy of the representations and warranties made in
accordance with this Agreement and the Offering Document
by purchasers to whom the Purchasers initially resell the
Offered Securities and (v) that purchasers to whom the
Purchasers initially resell the Offered Securities
receive a copy of the Offering Document prior to such
sale, the offer, sale and delivery of the Offered
Securities to the Purchasers in the manner contemplated
by this Agreement and the Offering Document and the
initial resale of the Offered Securities by the
Purchasers in the manner contemplated in the Offering
Document and this Agreement, do not require registration
under the Securities Act, and the Indenture does not
require qualification under the Trust Indenture Act, it
being understood that such counsel will not express any
opinion as to any subsequent resale of any Offered
Security.
For purposes of the foregoing opinion, such
counsel may state that (a) "Applicable Law" shall mean
only the laws of the United States and the State of New
York which, in such counsel's experience, are normally
applicable to transactions of the type contemplated by
this Agreement (other than the rules and regulations of
the National Association of Securities Dealers, Inc.),
but without such counsel having made any special
investigation as to the applicability of any specific
law, rule or regulation except as specified herein, (b)
"Governmental Approval" shall mean any consent, approval,
license, authorization or validation of, or filing,
recording or registration with, any Governmental
Authority pursuant to Applicable Laws, and (c)
"Governmental Authority" means any New York or federal
executive, legislative, judicial, administrative or
regulatory body.
In addition, such counsel shall state that it
has participated in conferences with officers and
representatives of the Company and representatives of the
independent accountants of the Company at which the
contents of the Offering Document and related matters
were discussed, and although such counsel is not passing
upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements
contained in the Offering Document and has made no
independent check or verification thereof except for
those made under the captions listed in paragraph
6(c)(iv) above, in each case insofar as such statements
relate to provisions of documents described therein, on
the basis of the foregoing, no facts have come to such
counsel's knowledge that have led such counsel to believe
that the Offering Document, or any amendment or
supplement thereto, as of the date of this Agreement and
as of the Closing Date, contained or contains any untrue
statement of a material fact or omitted or omits to state
any material fact necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading, except that such counsel need
not express any belief with respect to the financial
statements, schedules and other financial and statistical
data included or incorporated by reference therein or
excluded therefrom.
(d) The Purchasers shall have received an opinion, dated
the Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., General Counsel for the
Company, that:
(i) The Company has been duly incorporated, is
validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and
to conduct its business as presently conducted and as
described in the Offering Document and is duly qualified
to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such
qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its
subsidiaries, taken as a whole.
(ii) Kmart of Michigan, Inc. has been duly
incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to
own its property and conduct its business as described in
the Offering Document and is duly qualified to transact
business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or
leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(iii)Each of this Agreement, the Registration
Rights Agreement and the Indenture has been duly
authorized, executed and delivered by the Company.
(iv) The Offered Securities and the Exchange
Securities have been duly authorized by the Company.
(v) The execution and delivery by the Company
of, and the performance by the Company of its obligations
under, this Agreement, the Indenture, the Registration
Rights Agreement, the Offered Securities and the Exchange
Securities and compliance with the terms and provisions
hereof and thereof will not contravene any provision of
Applicable Law or the certificate of incorporation or
by-laws of the Company or, to the best of such counsel's
knowledge, any agreement or other instrument binding upon
the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole,
or, to the best of such counsel's knowledge, any
judgment, order or decree of which such counsel is aware,
of any Governmental Authority, except such contraventions
as would not, individually or in the aggregate, have a
material adverse effect on the condition (financial or
other), business, properties, net worth or results of
operations of the Company and its subsidiaries, taken as
a whole, provided that such counsel may state that they
express no opinion under this paragraph with regard to
the anti-fraud provisions of the Securities Act, the
Exchange Act or the rules and regulations thereunder or
the information contained in, the accuracy, completeness
or correctness of, or the adequacy of the disclosure
contained in, the Offering Document, which matters are
addressed in other portions of the opinion; and no
Governmental Approval is required for the performance by
the Company of its obligations under this Agreement,
except for the order of the Commission declaring the
Exchange Offer Registration Statement or the Shelf
Registration Statement effective and except such as may
be required by the securities or Blue Sky laws of the
various states and the securities laws of the
jurisdictions outside the United States in connection
with the offer and sale of the Offered Securities and
Exchange Securities.
(vi) To the best of such counsel's knowledge and
except as described in the Offering Document, there are
no pending actions, suits or proceedings against or
affecting the Company, any of its subsidiaries or any of
their respective properties that, if determined adversely
to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse
effect on the Company, or would materially and adversely
affect the ability of the Company to perform its
obligations under the Indenture, this Agreement or the
Registration Rights Agreement; and to such counsel's
knowledge, no such actions, suits or proceedings are
threatened or contemplated.
(vii) Such counsel is of the opinion that each
document filed pursuant to the Exchange Act and
incorporated by reference in the Offering Document
(except for financial statements and schedules and other
financial statistical data included therein as to which
such counsel need not express any opinion) complied when
so filed as to form in all material respects with the
Exchange Act and the rules and regulations of the
Commission thereunder.
For purposes of the foregoing opinion, such
counsel may state that (a) "Applicable Law" shall mean
only the laws of the United States and the State of
Michigan which, in such counsel's experience, are
normally applicable to transactions of the type
contemplated by this Agreement (other than the rules and
regulations of the National Association of Securities
Dealers, Inc.), but without such counsel having made any
special investigation as to the applicability of any
specific law, rule or regulation except as specified
herein, (b) "Governmental Approval" shall mean any
consent, approval, license, authorization or validation
of, or filing, recording or registration with, any
Governmental Authority pursuant to Applicable Laws, and
(c) "Governmental Authority" means any Michigan or
federal executive, legislative, judicial, administrative
or regulatory body.
In addition, such counsel shall state that she
or members of her staff under her supervision have
participated in conferences with officers and
representatives of the Company and representatives of the
independent accountants of the Company at which the
contents of the Offering Document and related matters
were discussed and, although such counsel is not passing
upon, and does not assume any responsibility for, the
accuracy, completeness or fairness of the statements
contained in the Offering Document and has made no
independent check or verification thereof except as
specifically described above, on the basis of the
foregoing, no facts have come to such counsel's knowledge
that have led such counsel to believe that the Offering
Document, or any amendment or supplement thereto, as of
the date of this Agreement and as of the Closing Date,
contained or contains any untrue statement of a material
fact or omitted or omits to state any material fact
necessary in order to make the statements therein, in
light of the circumstances under which they were made,
not misleading, except that such counsel need not express
any belief with respect to the financial statements,
schedules and other financial statistical data included
or incorporated by reference therein or excluded
therefrom or the exhibits to the Offering Document.
(e) The Purchasers shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Purchasers, such opinion or
opinions, dated the Closing Date, with respect to the validity of
the Offered Securities, the Offering Document, the exemption from
registration for the offer and sale of the Offered Securities by
the Company to the several Purchasers and the resales by the
several Purchasers as contemplated hereby and other related
matters as CSFBC may require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters with reference to same in
the Offering Circular. In rendering such opinion, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP may rely as to all matters governed by Michigan law upon the
opinion of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq. referred to above.
(f) The Purchasers shall have received a certificate,
dated the Closing Date, of the President or any Vice President and
a principal financial or accounting officer of the Company in
which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations and
warranties of the Company in this Agreement are true and correct,
that the Company has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and that, subsequent to the date
of the most recent financial statements in the Offering Document
there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Offering Document or
as described in such certificate.
(g) The Purchasers shall have received a letter, dated
the Closing Date, of PricewaterhouseCoopers LLP which meets the
requirements of subsection (a) of this Section, except that the
specified date referred to in such subsection will be a date not
more than three days prior to the Closing Date for the purposes of
this subsection.
The Company will furnish the Purchasers with such conformed copies
of such opinions, certificates, letters and documents as the Purchasers
reasonably request. CSFBC may in its sole discretion waive on behalf of the
Purchasers compliance with any conditions to the obligations of the
Purchasers hereunder
7. Indemnification and Contribution. (a) The Company will
indemnify and hold harmless each Purchaser, its partners, directors and
officers and each person, if any, who controls such Purchaser within the
meaning of Section 15 of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such Purchaser may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Offering
Document, or any amendment or supplement thereto, or any related
preliminary offering circular or the Exchange Act Reports, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
including any losses, claims, damages or liabilities arising out of or
based upon the Company's failure to perform its obligations under Section
5(a) of this Agreement, and will reimburse each Purchaser for any legal or
other expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through CSFBC
specifically for use therein, it being understood and agreed that the only
such information consists of the information described as such in
subsection (b) below.
(b) Each Purchaser will severally and not jointly
indemnify and hold harmless the Company, its directors and officers and
each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or
liabilities to which the Company may become subject, under the Securities
Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Offering Document, or any amendment or supplement
thereto, or any related preliminary offering circular, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by such Purchaser through CSFBC specifically for use therein, and
will reimburse any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being
understood and agreed that the only such information furnished by any
Purchaser consists of the following information in the Offering Document
furnished on behalf of each Purchaser: the fifth paragraph, the second and
third sentence in the seventh paragraph and the eighth and ninth paragraphs
under the caption "Plan of Distribution"; provided, however, that the
Purchasers shall not be liable for any losses, claims, damages or
liabilities arising out of or based upon the Company's failure to perform
its obligations under Section 5(a) of this Agreement.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under subsection (a) or (b) above, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than under subsection (a) or
(b) above. In case any such action is brought against any indemnified party
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party),
and after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release
of such indemnified party from all liability on any claims that are the
subject matter of such action and does not include a statement as to or an
admission of fault, culpability or failure to act by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute
to the amount paid or payable by such indemnified party as a result of the
losses, claims, damages or liabilities referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Purchasers on the
other from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company
on the one hand and the Purchasers on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the
Purchasers on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total discounts and commissions received by the
Purchasers from the Company under this Agreement. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of
this subsection (d). Notwithstanding the provisions of this subsection (d),
no Purchaser shall be required to contribute any amount in excess of the
amount by which the total price at which the Offered Securities purchased
by it were resold exceeds the amount of any damages which such Purchaser
has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion
to their respective purchase obligations and not joint.
(e) The obligations of the Company under this Section
shall be in addition to any liability which the Company may otherwise have
and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Purchaser within the meaning of the Securities Act or
the Exchange Act; and the obligations of the Purchasers under this Section
shall be in addition to any liability which the respective Purchasers may
otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default
in their obligations to purchase Offered Securities hereunder and the
aggregate principal amount of Offered Securities that such defaulting
Purchaser or Purchasers agreed but failed to purchase does not exceed 10%
of the total principal amount of Offered Securities, CSFBC may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Purchasers, but if no
such arrangements are made by the Closing Date, the non-defaulting
Purchasers shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Offered Securities that such
defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate principal amount of Offered
Securities with respect to which such default or defaults occur exceeds 10%
of the total principal amount of Offered Securities and arrangements
satisfactory to CSFBC and the Company for the purchase of such Offered
Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
non-defaulting Purchaser or the Company, except as provided in Section 9.
As used in this Agreement, the term "Purchaser" includes any person
substituted for a Purchaser under this Section. Nothing herein will relieve
a defaulting Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Purchasers set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results
thereof, made by or on behalf of any Purchaser, the Company or any of their
respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Offered
Securities. If this Agreement is terminated pursuant to Section 8 or if for
any reason the purchase of the Offered Securities by the Purchasers is not
consummated, the Company shall remain responsible for the expenses to be
paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company and the Purchasers pursuant to Section 7 shall
remain in effect. If the purchase of the Offered Securities by the
Purchasers is not consummated other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event
specified in clause (C), (D) or (E) of Section 6(b), the Company will
reimburse the Purchasers for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with
the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and,
if sent to the Purchasers will be mailed, delivered or telegraphed and
confirmed to the Purchasers, c/o Credit Suisse First Boston Corporation,
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Kmart Corporation, ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General
Counsel; provided, however, that any notice to a Purchaser pursuant to
Section 7 will be mailed, delivered or telegraphed and confirmed to such
Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have
any right or obligation hereunder, except that holders of Offered
Securities shall be entitled to enforce the agreements for their benefit
contained in the second and third sentences of Section 5(b) hereof against
the Company as if such holders were parties thereto.
12. Representation of Purchasers. You will act for the several
Purchasers in connection with this purchase, and any action under this
Agreement taken by you, jointly or by CSFBC, will be binding upon all the
Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of
the Federal and state courts in the Borough of Manhattan in The City of New
York in any suit or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby.
If the foregoing is in accordance with the Purchasers'
understanding of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between
the Company and the several Purchasers in accordance with its terms.
Very truly yours,
KMART CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
and Treasurer
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
Acting on behalf of themselves
and as the representatives
of the several Purchasers
By Credit Suisse First Boston Corporation
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
SCHEDULE A
Principal Amount of
Offered Securities
Purchaser
Credit Suisse First Boston Corporation................... $215,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc............................... $107,500,000
BNY Capital Markets, Inc. ............................... $43,000,000
Fleet Securities, Inc. .................................. $43,000,000
Banc One Capital Markets, Inc. .......................... $21,500,000
-------------
Total.......................... $430,000,000