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EXHIBIT 99.40
GUARANTY AGREEMENT
dated as of January 21, 1992
made by
KMART CORPORATION
in favor of
THE LENDERS REFERRED TO HEREIN
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GUARANTY AGREEMENT
GUARANTY AGREEMENT dated as of January 21, 1992 (as the same
may be amended, supplemented or otherwise modified from time to time, this
"Guaranty"), made by KMART CORPORATION, a Michigan corporation (the "Company"),
in favor of the Lenders (as hereinafter defined). Certain capitalized terms
used herein are defined in Section 1 of this Guaranty.
W I T N E S S E T H:
WHEREAS, the Company owns all of the issued and outstanding
capital stock of Big Beaver Development Corporation, a Michigan corporation
("Big Beaver"); and
WHEREAS, Big Beaver has, prior to the date hereof, entered
into certain joint venture agreements with XXXXXXXXXX ("XXXXXXXXXX"),
XXXXXXXXXX ("XXXXXXXXXX") and XXXXXXXXXX pursuant to which joint ventures
named the "XXXXXXXXXX", the "XXXXXXXXXX", the "XXXXXXXXXX" and the
"XXXXXXXXXX" have been created for the purpose of acquiring, owning,
developing, leasing, operating and managing shopping centers, as described
more fully in such joint venture agreements; and
WHEREAS, the Company intends that Big Beaver, or another
wholly-owned subsidiary of the Company, shall hereafter enter into additional
joint venture agreements, or other arrangements with some or all of XXXXXXXXXX,
XXXXXXXXXX and/or XXXXXXXXXX ("XXXXXXXXXX") pursuant to which additional
joint ventures, partnerships or corporations will be established, also for the
purpose of acquiring, owning, developing, leasing, operating and managing
shopping centers (such additional joint ventures, partnerships and corporations
being hereinafter collectively referred to as the "Additional Joint Ventures");
and
WHEREAS, the XXXXXXXXXX has entered into that certain
Loan Agreement dated as of the date hereof with XXXXXXXXXX and the "Banks"
(as such term is defined therein), XXXXXXXXXX as Managing Agent for the
Banks (collectively, XXXXXXXXXX as a Bank and as such managing agent, and the
other Banks are referred to herein as the "Lenders") pursuant to which the
Banks have agreed to extend credit to the 'Borrowers' (as defined in such Loan
Agreement), subject to the terms and conditions thereof (such Loan Agreement,
as the same may be amended, modified or supplemented from time to time, is
hereinafter referred to as the "Loan Agreement"); and
WHEREAS, the Loan Agreement contemplates that the 'Borrowers'
thereunder shall include the XXXXXXXXXX and such of the Additional Joint
Ventures as may hereafter become parties
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(ii) all other present and future obligations and
liabilities (whether absolute, fixed or contingent, matured or
unmatured, joint, several or independent and howsoever
acquired) of each and every Borrower to the Lenders or any of
them, arising out of or in any way relating to any and all of
the Loan Documents and the transactions contemplated thereby;
and
(iii) any obligation of any Borrower to any Lender
under any Interest Rate Agreement;
together with all reasonable costs (including, without limitation, reasonable
legal fees and disbursements) incurred by the Lenders in connection with
recovering the same from the Borrowers or the Company. In case of the failure
of any Borrower to duly, punctually and indefeasibly make any such payment in
full as and when due and payable, the Company hereby agrees to duly, punctually
and indefeasibly make such payment as and when the same shall become due and
payable, whether on the due date therefor, upon stated maturity, by
acceleration, upon demand or otherwise, in accordance with the terms of this
Guaranty.
(b) The Company hereby also absolutely, unconditionally
and irrevocably guaranties to each of the Lenders completion of construction of
each Project for which a Project Commitment is established under the Loan
Agreement, free and clear of all Liens which are not Permitted Liens
(including, without limitation, mechanics' and materialmen's liens) and in
accordance with and in the manner contemplated by the Loan Agreement, the
Project Budget for such Project and the plans, as amended by the applicable
Borrower from time to time, for such Project.
(c) The payment and performance obligations guarantied by
this Guaranty are herein sometimes referred to collectively as the "Guarantied
Obligations".
(d) The Company hereby agrees that, except as set forth
in Section 3 hereof, the Company's obligations hereunder shall be continuing,
absolute and unconditional under any and all circumstances and not subject to
any reduction, limitation, impairment, termination, defense (other than prior,
final and indefeasible payment of all of the Guarantied Obligations in full) ,
set-off, abatement, counterclaim or recoupment whatsoever (all of which are
hereby expressly waived by the Company), whether by reason of any claim of any
character whatsoever, including, without limitation, any claim of waiver,
release, surrender, alteration or compromise, or by reason of any liability at
any time to the Company or any Borrower or any of their respective Subsidiaries
or otherwise, whether based upon any agreement, instrument or document
evidencing or securing the Guarantied Obligations or any other agreement,
instrument or document (including, without limitation, this Guaranty) or
otherwise, and howsoever arising, whether out of
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action or inaction or otherwise and whether resulting from default, willful
misconduct, negligence or otherwise, and without limiting the foregoing,
irrespective of:
(i) any insolvency, bankruptcy, reorganization or
dissolution, or any proceeding in respect of any thereof, of
the Company, any Borrower, any of their respective
Subsidiaries or any other guarantor of all or any portion of
the Guarantied Obligations;
(ii) the genuineness, validity, regularity or
enforceability of any Loan Document or any other agreement,
instrument or document evidencing or securing the Guarantied
Obligations or any other agreement, instrument or document or
the extension or renewal thereof, in whole or in part, with or
without notice to or assent from the Company, any Borrower,
any of their respective Subsidiaries or any other guarantor of
all or any portion of the Guarantied Obligations;
(iii) any rescission, compromise, alteration,
amendment, modification, extension (including, without
limitation, any extension of the Facility Termination Date
whether pursuant to Section 3.10 of the Loan Agreement or
otherwise), renewal, release, change, waiver, consent or other
action in respect of any of the terms, provisions, covenants
or conditions contained in any Loan Document or any other
agreement, instrument or document evidencing or securing the
Guarantied obligations or in any other agreement, instrument
or document;
(iv) the absence of notice or the absence of or any
delay in any action to enforce any obligation or to exercise
any right or remedy against the Company, any Borrower, any of
their respective Subsidiaries or any other guarantor of all or
any portion of the Guarantied Obligations, whether under any
Loan Document or any other agreement, instrument or document
evidencing or securing the Guarantied Obligations or under any
other agreement, instrument or document, or any indulgence or
extension or waiver granted to or compromise with the Company,
any Borrower, any of their respective Subsidiaries or any
other guarantor of all or any portion of the Guarantied
Obligations, or any action or proceeding taken or not taken
with respect to or by or on behalf of the Company, any
Borrower, any of their respective Subsidiaries or any other
guarantor of all or any portion of the Guarantied Obligations,
or the holder of any agreement, instrument or document
evidencing or securing the Guarantied Obligations;
(v) any default, failure or delay in the
performance of any obligation, covenant, duty, representation,
warranty or agreement contained in any Loan Document or any
other agreement, instrument or document evidencing or securing
the
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Guarantied Obligations or in any other agreement, instrument or document, or
arising pursuant to law;
(vi) any act or thing or omission to do or delay in
doing any act or thing which might in any manner result in any
lack of proper authorization or any invalid execution of any
Loan Document or any other agreement, instrument or document
evidencing or securing the Guarantied Obligations or any other
agreement, instrument or document;
(vii) any assignment by any Borrower or any
assumption by any Person of any obligation under any Loan
Document or any other agreement, instrument or document
evidencing or securing the Guarantied Obligations or under any
other agreement, instrument or document;
(viii) any event of force majeure;
(ix) any release or substitution of any collateral
for, or any obligor in respect of, the payment of the
Guarantied Obligations or obligations under any Loan Document
or any other agreement, instrument or document, in whole or in
part, with or without notice to or assent from the Company,
any Borrower, any of their respective Subsidiaries or any
other guarantor of all or any portion of the Guarantied
Obligations;
(x) whether a lien or security interest on any
collateral shall have been perfected or shall continue to be
perfected, or whether any collateral shall be impaired in any
manner, or whether any steps shall have been taken to enforce
rights against the Company, any Borrower, any of their
respective Subsidiaries or any other guarantor of all or any
portion of the Guarantied Obligations or any collateral;
(xi) the status of any Borrower as an Eligible Borrower
under the Loan Agreement; or
(xii) any other circumstances which might constitute
a legal or equitable discharge or defense of a surety or
guarantor.
(e) The Company hereby:
(i) waives diligence, presentment, demand (of
payment or otherwise), protest, notice, filing of claims with
a court in the event of the merger or bankruptcy of any
Borrower or any of any Borrower's Subsidiaries, any right to
require a proceeding first against any Borrower or any other
guarantor of all or any portion of the Guarantied Obligations
or to ▇▇▇▇▇▇▇▇ or realize on any collateral, with respect to
the Guarantied Obligations;
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(ii) agrees that its obligations hereunder constitute
guaranties of payment and not of collection and are not in any
way conditional or contingent upon any attempt to collect from
or enforce against any Borrower or any other guarantor of all
or any portion of the Guarantied Obligations or upon any other
condition or contingency;
(iii) acknowledges that any agreement, instrument or
document evidencing and/or securing the Guarantied Obligations
may be transferred (upon and subject to the terms and
conditions thereof) and that the benefit of the Company's
obligations hereunder shall extend to each holder of any
agreement, instrument or document evidencing and/or securing
the Guarantied Obligations automatically and without notice to
the Company;
(iv) covenants that, except as otherwise expressly
provided in Section 3 hereof, this Guaranty will not be
discharged except by final, complete, indefeasible and
irrevocable payment and performance of the obligations
contained in the agreements, instruments and documents
evidencing the Guarantied Obligations and this Guaranty; and
(v) waives acceptance of this Guaranty by any of the
Lenders.
(f) The Company further agrees that if at any
time all or any part of any payment theretofore applied by, or on behalf of,
any Lender to any of the Guarantied Obligations is, or must be, rescinded or
returned by such Lender for any reason whatsoever or such payment is declared
invalid, void, preferential or fraudulent for any reason whatsoever, including,
without limitation, the insolvency, bankruptcy or reorganization of any
Borrower, any of the Company's Subsidiaries or any other guarantor of all or
any portion of the Guarantied Obligations, such Guarantied Obligations or
applicable portion thereof, for purposes of this Guaranty, to the extent that
such payment is or must be rescinded or returned or is declared invalid, void,
preferential or fraudulent, shall be deemed to have continued in existence
notwithstanding such application, and this Guaranty shall continue to be
effective or be reinstated, as the case may be, as to such Guarantied
Obligations or applicable portion thereof as though such application had not
been made, irrespective of whether any note or other evidence of indebtedness
has been surrendered or cancelled.
(g) All payments by the Company under this Guaranty
shall be made without set-off or counterclaim and in such amounts as may be
necessary in order that all such payments (after deduction or withholding for
or on account of any present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or any political
subdivision or taxing authority thereof, other than any tax on or measured by
the
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overall not income of a Bank pursuant to the income tax laws of the United
States of America or the jurisdictions where such Lender's principal or lending
offices are located (collectively the "Taxes")) shall not be less than the
amounts otherwise required to be paid under this Guaranty. A certificate as to
any additional amounts payable to a Lender under this Section 2(g) submitted to
the Company by such Lender shall show in reasonable detail the amount payable
and the calculations used to determine in good faith such amount and shall,
absent manifest error, be final, conclusive and binding upon the Company and
such Bank. With respect to each deduction or withholding for or on account of
any Taxes, the Company shall promptly furnish to each Bank such certificates,
receipts and other documents as may be reasonably required (in the judgment of
such Bank) to establish any tax credit to which such Bank may be entitled.
(h) All payments to be made by the Company in respect of
the Guarantied Obligations shall be made to the Managing Agent at its Payment
Office in New York, New York for the ratable account of the Banks not later
than 11:00 A.M. (New York time) on the date when due in each case in lawful
money of the United States of America and in immediately available funds. If
any payment hereunder becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day.
Section 3. Special Limitation. Notwithstanding the foregoing,
the obligations of Guarantor under clause (b) of Section 2 hereof shall be
terminated and of no further force and effect with respect to any Project as of
such time, if ever, as (a) the Loan or Loans relating to such Project have been
indefeasibly paid in full and (b) the Project Commitment for such Project has
been terminated.
Section 4. Subordination; Subrogation. The Company hereby
agrees that any indebtedness of any Borrower to the Company arising or accruing
out of any payment which the Company may make pursuant to this Guaranty shall
be fully subordinate and junior in priority in right of payment to any
indebtedness of such Borrower to the Lenders, and the Company shall have no
right of reimbursement or indemnity in respect of such payment whatsoever
unless and until all obligations of such Borrower to the Lenders shall have
been finally, completely, indefeasibly and irrevocably paid and performed in
full. The Company hereby further agrees that it shall have no rights of
subrogation with respect to any payments made by it hereunder.
Section 5. Regresentations and Warranties. The Company hereby
makes the following representations and warranties to the Lenders, which
representations and warranties shall survive the execution and delivery of this
Guaranty, the Loan Agreement and the other Loan Documents:
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(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Michigan. The Company is
duly qualified and in good standing as a foreign corporation, and is duly
authorized to do business, in each jurisdiction where the ownership or leasing
of property or the character of its operations make such qualification
necessary and in which the failure to so qualify would have a material adverse
effect (individually or taken as a whole) on the business, condition (financial
or otherwise) assets, liabilities, operations or prospects of the Company and
its Subsidiaries.
(b) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Guaranty, and has taken
all necessary corporate and other action to authorize the execution, delivery
and performance by it of this Guaranty. This Guaranty is the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement hereof may be subject to (i)
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law).
(c) The execution, delivery and performance by the
Company of this Guaranty will not:
(i) contravene any provision of law, statute, rule or
regulation to which the Company is subject or any judgment, decree,
award, franchise, order or permit applicable to the Company;
(ii) conflict or be inconsistent with, or result in any
breach of, any of the terms, covenants or provisions of, or constitute
a default under, or result in the creation or imposition of any lien
upon any of the properties or assets of the Company pursuant to the
terms of, any indenture, mortgage, deed of trust, agreement or other
instrument (including, without limitation, any Loan Document) to which
the Company is a party or by which it or any of its properties or
assets may be bound; or
(iii) violate any provision of its Certificate of Incorporation
or By-laws.
(d) No authorization or approval of, or other action by, and no
notice to or filing or registration with, any governmental authority or
regulatory body is required (other than those that have been obtained and are
in force and
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effect) in connection with the execution, delivery and performance by the
Company of this Guaranty or the taking of any action hereby contemplated.
(e) The Company is not and, after giving effect to the
transactions contemplated by this Guaranty, it will not be, in default in any
material respect under any material mortgage, indenture, lease, contract or
other agreement or undertaking to which it is a party or by which it or any of
its properties or assets may be bound.
(f) The Company is not in material default under any order, award
or decree of any court, arbitrator or governmental authority binding upon or
affecting it or by which any of its properties or assets may be bound or
affected, and no such order, award or decree would materially and adversely
affect the ability of the Company to carry on its business as presently
conducted or the ability of the Company to perform its obligations under this
Guaranty.
(g) There are no actions, suits, proceedings or investigations
pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries or any of its or their respective
properties or assets before any court, governmental agency or regulatory
authority (Federal, state or local), which, if determined adversely to the
Company or any such Subsidiary, would (individually or in the aggregate)
materially impair the Company's ability to perform fully its obligations under
this Agreement on a timely basis. Neither the Company nor any of its
Subsidiaries (A) is in default with respect to any order of any court,
arbitrator or governmental body or (B) has violated or is in violation of any
statute, rule or regulation of any governmental authority, the violation of
which would materially and adversely affect the business , condition (financial
or otherwise), assets, liabilities, operations or prospects of the Company and
its Subsidiaries (in the aggregate).
(h) Neither the Company nor any of its Subsidiaries is an
"investment company" or a company "controlled" by a company required to be
registered as an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 6. (Intentionally Omitted)
Section 7. Affirmative Covenants. The Company hereby
agrees that, unless otherwise consented to in writing by the Required Banks,
it will:
(a) Furnish to each Lender:
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(i) as soon as possible and in any event within seven (7) days
after the Company shall have obtained knowledge of the occurrence of a
Guarantor Event of Default or Unmatured Guarantor Event of Default,
the written statement of an officer of the Company setting forth
the details of each such Guarnator Event of Default or Unmatured
Guarantor Event of Default which is continuing and the action which
the Company proposes to take with respect thereto (if any);
(ii) promptly upon the earlier of their distribution or the
filing thereof with the Securities and Exchange Commission ("SEC")
(and in no event later than 60 days after filing), copies of the
Company's annual reports on Form 10K (which shall in any event
be delivered by May 31 of each year for the year then ended), copies
of any quarterly report by the Company on Form 10Q, and any report on
Form 8K;
(iii) promptly upon obtaining knowledge thereof, notice of any
action, suit, proceeding or investigation pending or threatened
against or affecting the Company or any of its Subsidiaries or any of
their respective properties before any court, governmental
agency or regulatory authority (Federal, state or local), whcih, if
determined adversely to the Company or any of its Subsidiaries, could
have a material adverse effect on the ability of the Company to
perform its obligations under this Guaranty;
(iv) promptly upon obtaining knowledge thereof, notice of any
downgrade of the Company's long-term Indebtedness by Standard & Poor's
Corporation or ▇▇▇▇▇'▇ Investors Service, Inc. or of being placed on
any credit watch;
(v) such other information respecting the properties, business
affairs, financial condition and/or operations of the Company as the
Managing Agent may from time to time reasonably request;
(b) Duly and punctually pay and perform each of its obligations
hereunder in accordance with the terms hereof;
(c) Preserve and maintain its corporate existence, rights, privileges
and franchises in the jurisdiction of its incorporation;
(d) Comply, and cause Big Beaver and each other Subsidiary of the
Company which at any time owns any ownership interest in any Borrower to
comply, with all laws, rules, regulations and governmental orders (Federal,
state and local)
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having applicability to it or to its businesses, where the failure
to so comply would have a material adverse effect on the business,
condition (financial or otherwise), assets, liabilities, operations
or prospects of the Company and its subsidiaries (in the aggregate);
and
(e) Furnish to the Managing Agent within forty-five (45)
days after the and of each fiscal quarter of the Company, a
certificate of an officer of the Company certifying that no Guarantor
Event of Default or Unmatured Guarantor Event of Default has occurred
and is continuing (or, if any such default has occurred and is
continuing or if the Company is not in compliance with its
representatives, warranties, covenants and agreements in this Guaranty,
specifying the nature of such Guarantor Event of Default or
non-compliance and any action which the Company has taken or proposes
to take in respect thereof).
Section 8. Breach of Representations, Warranties or Covenants. In the
event that the Company shall fail to comply with any of its covenants or
agreements contained in this Guaranty and such failure shall continue
unremedied for five (5) days after written notice thereof has been given to the
Guarantor by the Managing Agent or if any representation or warranty contained
in this Guaranty shall be inaccurate or untrue in any material respect, then in
any such event and at any time thereafter (so long as such failure or
inaccuracy shall not have been cured or waived in accordance with Section
9(d)), the Managing Agent may, and at the direction of the Required Banks
shall, for purposes of this Guaranty, declare some or all of the obligations of
any Borrower under the Loan Agreement (whether or not then due under the Loan
Agreement) immediately due and payable as to the Company.
Section 9. Miscellaneous.
(a) THIS GUARANTY 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 Guaranty 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 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. If this
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Guaranty would be held or determined by a court of competent jurisdiction in a
judicial proceeding to be void, voidable, invalid or unenforceable on account
of the amount of the aggregate liability of the Company under this Guaranty or
by reason of any inconsistent contractual provision binding on the Company and
in effect on or prior to the date hereof, then, notwithstanding any other
provision of this Guaranty to the contrary, the aggregate amount of the
liability of the Company under this Guaranty shall, without any further action
by the Company, the Managing Agent, the Lenders or any other Person, be
automatically limited and reduced to the maximum amount which is valid and
enforceable.
(c) No failure or delay on the part of any Lender in
exercising any right, power or remedy under this Guaranty 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
Guaranty are cumulative and are not exclusive of any remedies that may be
available to any Lender 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 Guaranty, nor consent to any departure by the Company
therefrom, shall be effective unless the same shall be consented to in writing
by all of the Banks. Any amendment, modification or supplement of or to any
provision of this Guaranty, any waiver of any provision of this Guaranty, and
any consent to any departure by the Company from the terms of any provision of
this Guaranty, 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
Guaranty or the Loan Agreement, no notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances.
(f) The Company acknowledges receipt of a copy of the
Loan 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 none of the Lenders shall be obligated to furnish to the Company any
copies of any amendments, modifications or supplements or waivers with respect
to the Loan 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
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made upon any party hereto 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 courier delivery service, or by
telecopier, and shall be deemed to have boon given to the Company for purposes
of this Guaranty, 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 my mail, on the day which is two Business Days after the day such
writing is sent to the intended recipient thereof in accordance with the
provisions of this subsection. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this subsection,
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 on Exhibit A
hereto, and, in the case of telephonic instructions or notices, by calling the
telephone number or numbers indicated for such party on Exhibit A hereto or in
any copy of a notice of assignment delivered to the Company in accordance with
the terms of the Loan Agreement.
(h) This Guaranty shall be binding upon the company and
its successors and assigns and shall inure to the benefit of, and be
enforceable by, each of the Lenders and their respective successors and assigns
(including any permitted assignee in accordance with Section 9.8 of the Loan
Agreement); provided that the Company may not assign or transfer any of its
obligations under this Guaranty without the prior written consent of each of
the Lenders.
(i) The Company 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 Guaranty, and the Company hereby
irrevocably and unconditionally agrees that all claims in respect of such
action or proceeding brought against any of the Lenders in respect of this
Guaranty shall be brought in such United States Federal or New York State
court. The Company 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 Company at
its address specified in Section 9(g) hereof or by certified or registered mail
directed to such address. THE COMPANY AND THE MANAGING AGENT AND THE LENDERS,
BY ACCEPTANCE HEREOF, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN CONNECTION WITH ANY ACTION UNDER OR COUNTERCLAIM RELATING TO THIS
GUARANTY, THE LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND THE COMPANY AND
THE MANAGING AGENT AND THE LENDERS, 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
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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 any of the Lenders to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against the Company in any other jurisdiction.
(j) The Company agrees to pay promptly on demand, to the
extent not previously finally and indefeasibly paid in full by any Borrower:
(i) all reasonable costs and expenses of the Managing Agent
in connection with the negotiation, preparation, execution, issuance,
delivery, filing and recording of this Guaranty and any other
documents which may be delivered in connection with this Guaranty,
including, without limitation, the reasonable fees and expenses of
XXXXXXXXXX, special counsel for the Managing Agent, and any
local counsel retained by the Managing Agent, with respect thereto and
with respect to advising the Managing Agent from time to time as to
its rights and responsibilities under or in respect of this Guaranty
and any amendment or modification of, or waiver under, this Guaranty;
and
(ii) from and after the occurrence of any Guarantor Event of
Default or Unmatured Guarantor Event of Default, all costs and
expenses (including reasonable counsel fees and expenses) of any
Lender in connection with (A) any and all amounts which any Lender may
incur relative to the curing of any default resulting from the acts or
omissions of the Company under this Guaranty, (B) any amendment or
modification of, or waiver under, this Guaranty and (C) the
enforcement of this Guaranty and the preservation of the Lenders'
rights hereunder; and
(iii) any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery,
filing and recording of this Guaranty and any other documents which
may be delivered in connection with this Guaranty, and agrees to save
the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay
such taxes and fees.
The obligations of the Company under this subsection shall survive the payment
of the Company's other obligations hereunder and the termination of this
Guaranty.
(k) Section and other headings used in this Guaranty are
for convenience only and shall not affect the construction of this Guaranty.
15
15
IN WITNESS WHEREOF, the Company has caused this Guaranty Agreement to
be duly executed and delivered by its proper and duly authorized officer as of
the day and year first above written.
KMART CORPORATION
By:
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Name:
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Title:
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16
EXHIBIT A
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