EXHIBIT 4.1
THIRD AMENDMENT TO
REVOLVING CREDIT AND GUARANTY AGREEMENT
THIRD AMENDMENT, dated as of August 23, 2002 (the "Amendment"), to the
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of January 22, 2002, among
KMART CORPORATION, a Michigan corporation (the "Borrower"), a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Guarantors
named therein (the "Guarantors"), JPMORGAN CHASE BANK, a New York banking
corporation ("JPMorgan Chase"), each of the other financial institutions party
thereto (together with JPMorgan Chase, the "Banks") and JPMORGAN CHASE BANK, as
Agent for the Banks (in such capacity, the "Agent"):
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are
parties to that certain Revolving Credit and Guaranty Agreement, dated as of
January 22, 2002, as amended by that certain First Amendment to Revolving Credit
and Guaranty Agreement dated as of February 15, 2002 and as further amended by
that certain Second Amendment to Revolving Credit and Guaranty Agreement dated
as of March 7, 2002 (as the same may be further amended, modified or
supplemented from time to time, the "Credit Agreement");
WHEREAS, the Borrower and the Guarantors have requested that certain
provisions of the Credit Agreement be amended subject to and upon the terms and
conditions set forth herein so as to, among other things, modify the negative
covenant with respect to minimum EBITDA appearing in the Credit Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. As used herein, all terms that are defined in the Credit Agreement
shall have the same meanings herein.
2. Section 6.05 of the Credit Agreement is hereby amended in its
entirety to read as follows:
SECTION 6.05 EBITDA.
(a) Permit cumulative EBITDA for the Borrower and the
Guarantors for each fiscal period beginning on February 1, 2002 and
ending on or about each of the dates listed below to be less than the
amount specified opposite such date:
Period Ending EBITDA
------------- ------
August 31, 2002 ($400,000,000)
September 30, 2002 ($400,000,000)
October 31, 2002 ($300,000,000)
November 30, 2002 ($300,000,000)
December 31, 2002 $100,000,000
January 31, 2003 $100,000,000
(b) Permit cumulative EBITDA for the Borrower and the Guarantors for
each rolling twelve (12) fiscal month period ending on or about each of
the dates listed below to be less than the amount specified opposite
such date:
February 28, 2003 $100,000,000
----------------- ------------
March 31, 2003 $100,000,000
April 30, 2003 $100,000,000
May 31, 2003 $100,000,000
June 30, 2003 $100,000,000
July 31, 2003 $100,000,000
August 31, 2003 $100,000,000
September 30, 2003 $100,000,000
October 31, 2003 $100,000,000
November 30, 2003 $100,000,000
December 31, 2003 $100,000,000
January 31, 2004 $350,000,000
February 29, 2004 $350,000,000
March 31, 2004 $350,000,000
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3. Section 2.19 of the Credit Agreement is hereby amended by: (i)
deleting the word "and" in the last line thereof and inserting a comma in its
place; and (ii) inserting the following at the end thereof: "and that certain
Third Amendment Fee Letter dated August 23, 2002.".
4. Item 6 of Schedule 6.11 to the Credit Agreement is hereby amended in
its entirety to read as follows:
6. Any sale or disposition of all or any of the interests of
the Borrower or any of its Subsidiaries in, or all or any of the assets
of, ▇▇▇▇▇▇▇▇▇.▇▇▇ LLC or any present or future e-commerce joint
venture.
5. The amendments set forth in this Amendment shall not become
effective (the "Third Amendment Effective Date") until the date on which this
Amendment shall have been executed by the Borrower, the Guarantors, the Required
Banks and the Agent, and the Agent shall have received evidence satisfactory to
it of such execution, provided that notwithstanding the occurrence of the Third
Amendment Effective Date, the effect of this Amendment shall terminate and be of
no further force or effect if (x) on or before September 16, 2002, the
Bankruptcy Court shall not have entered an order substantially in the form of
Exhibit A hereto authorizing the terms of this Amendment and the payment no
later than September 16, 2002 by the Borrower to the Agent for its own account
of an arrangement fee in the amount heretofore agreed upon by the Borrower and
the Agent and the payment no later than September 16, 2002 by the Borrower to
the Agent, for the respective account of each Bank that has executed and
delivered to the Agent a counterpart of this Amendment by not later than 5:00
p.m. (New York City time) on August 28, 2002, an amendment fee in an amount
equal to 1/4 of 1% of such Bank's Tranche A Commitment and/or Tranche B
Credit-Linked Deposit on August 28, 2002, and (y) such arrangement fee and
amendment fee shall not have been paid in cash to the Agent for its own account
and the accounts of the Banks referred to above, respectively, within one
Business Day after entry of the order referred to above (except as may otherwise
be agreed by the Agent in the case of the timing and amount of such arrangement
fee).
6. Except to the extent hereby amended, the Credit Agreement and each
of the Loan Documents remain in full force and effect and are hereby ratified
and affirmed.
7. The Borrower agrees that its obligations set forth in Section 10.05
of the Credit Agreement shall extend to the preparation, execution and delivery
of this Amendment, including the reasonable fees and disbursements of special
counsel to the Agent.
8. This Amendment shall be limited precisely as written and shall not
be deemed (a) to be a consent granted pursuant to, or a waiver or modification
of, any other
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term or condition of the Credit Agreement or any of the instruments or
agreements referred to therein or (b) to prejudice any right or rights which the
Agent or the Banks may now have or have in the future under or in connection
with the Credit Agreement or any of the instruments or agreements referred to
therein. Whenever the Credit Agreement is referred to in the Credit Agreement or
any of the instruments, agreements or other documents or papers executed or
delivered in connection therewith, such reference shall be deemed to mean the
Credit Agreement as modified by this Amendment.
9. This Amendment may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
10. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to Revolving Credit and Guaranty Agreement to be duly executed as of the day and
the year first written.
BORROWER:
KMART CORPORATION
By:
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Title:
GUARANTORS:
BIG BEAVER DEVELOPMENT CORPORATION
By:
----------------------------------------
Title:
BIG BEAVER OF CAGUAS
DEVELOPMENT CORPORATION
By:
----------------------------------------
Title:
BIG BEAVER OF FLORIDA DEVELOPMENT, LLC
By:
----------------------------------------
Title:
BIG BEAVER OF GUAYNABO
DEVELOPMENT CORPORATION
By:
----------------------------------------
Title:
▇▇▇▇▇▇▇▇▇.▇▇▇ LLC
By:
----------------------------------------
Title:
5
KMART HOLDINGS, INC.
By:
----------------------------------------
Title:
KMART MICHIGAN PROPERTY SERVICES, L.L.C.
By:
----------------------------------------
Title:
KMART OF AMSTERDAM, NY DISTRIBUTION
CENTER, INC.
By:
----------------------------------------
Title:
KMART OF MICHIGAN, INC.
By:
----------------------------------------
Title:
KMART OF NORTH CAROLINA LLC
By:
----------------------------------------
Title:
KLC, INC.
By:
----------------------------------------
Title:
KMART CORPORATION OF ILLINOIS, INC.
By:
----------------------------------------
Title:
6
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
----------------------------------------
Title:
KMART STORES OF INDIANA, INC.
By:
----------------------------------------
Title:
KMART STORES OF TNCP, INC.
By:
----------------------------------------
Title:
THE ▇▇▇▇▇▇▇▇ GROUP LLC
By:
----------------------------------------
Title:
▇▇▇▇ CMBS PROPERTY, L.L.C.
By:
----------------------------------------
Title:
KMART OVERSEAS CORPORATION
By:
----------------------------------------
Title:
JAF, INC.
By:
----------------------------------------
Title:
7
VTA, INC.
By:
----------------------------------------
Title:
BIG BEAVER OF CAGUAS DEVELOPMENT
CORPORATION II
By:
----------------------------------------
Title:
BIG BEAVER OF CAROLINA DEVELOPMENT
CORPORATION
By:
----------------------------------------
Title:
KMART PHARMACIES, INC.
By:
----------------------------------------
Title:
KMART PHARMACIES OF MINNESOTA, INC.
By:
----------------------------------------
Title:
BUILDERS SQUARE, INC.
By:
----------------------------------------
Title:
8
KMART CMBS FINANCING, INC.
By:
----------------------------------------
Title:
KMART INTERNATIONAL SERVICES, INC.
By:
----------------------------------------
Title:
PMB, INC.
By:
----------------------------------------
Title:
SOURCING & TECHNICAL SERVICES, INC.
By:
----------------------------------------
Title:
ILJ, INC.
By:
----------------------------------------
Title:
STI MERCHANDISING, INC.
By:
----------------------------------------
Title:
KBL HOLDING INC.
By:
----------------------------------------
Title:
9
KMART OF INDIANA
By:
----------------------------------------
Title:
KMART OF PENNSYLVANIA LP
By:
----------------------------------------
KMART OF TEXAS L.P.
By:
----------------------------------------
Title:
10
JPMORGAN CHASE BANK,
INDIVIDUALLY AND AS AGENT
By:
----------------------------------------
Title:
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By:
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Name:
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Title:
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EXHIBIT A
[FORM OF ORDER]