As filed with the Securities and Exchange Commission on August , 1995
Registration Statement No. 33-55825
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
T0
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Sears, Roebuck and Co.
(Exact name of registrant as specified in its charter)
New York 36-1750680
(State of incorporation) (I.R.S. Employer Identification No.)
Sears Tower
Chicago, Illinois 60684
312/875-2500
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Copies to:
David Shute, Esq. Robert J. Pence, Esq. Michael D. Levin, Esq.
Senior Vice President, Senior Counsel Latham & Watkins
General Counsel Corporate Law Department Sears Tower
and Secretary Sears, Roebuck and Co. Suite 5800
Sears, Roebuck and Co. Sears Tower Chicago, Illinois 60606
Sears Tower Chicago, Illinois 60684
Chicago, Illinois 60684
312/875-2500
(Name, address, including
zip code, and telephone
number, including area
code, of agent for service)
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. X
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. X
CALCULATION OF REGISTRATION FEE
Amount of
Proposed Proposed Registration
Title of Each Class Amount Maximum Maximum Fee (Paid
of Securities To Be Offering Price Aggregate on October 6,
To Be Registered Registered(1) Per Unit Offering Price 1994)
Debt Securities )
Debt Warrants )
Common Shares, )
par value $0.75
per share)
Common Share
Warrants )
Preferred Shares,) (2) (2) $6,000,000,000 1,200,000
par value $1.00
per share)
Preferred Share
Warrants )
Depositary Shares)
Depositary Shares
Warrants )
(1) This Registration Statement and the registration fee pertain to: (i)
the initial offering of an indeterminate number and principal amount, but
having an aggregate initial offering price of not more than $6,000,000,000
(or the equivalent thereof in one or more foreign currencies or composite
currencies, including European Currency Units), of (a) Debt Securities, (b)
Common Shares, (c) Preferred Shares, (d) Depositary Shares representing
fractional interests in Preferred Shares, and (e) warrants (collectively,
``Securities Warrants'') to purchase or receive Debt Securities (``Debt
Warrants''), Common Shares (``Common Share Warrants''), Preferred Shares
(``Preferred Share Warrants'') or Depositary Shares (``Depositary Share
Warrants''), and (ii) Common Shares, Preferred Shares or Depositary Shares
that may be issued in exchange for, or upon conversion of, the Debt
Securities, Preferred Shares or Depositary Shares registered under this
Registration Statement. No separate consideration will be received for such
Common Shares, Preferred Shares or Depositary Shares that may be issued in
exchange for, or upon conversion of, Debt Securities, Preferred Shares or
Depositary Shares. Any securities registered hereunder may be sold
separately or as units with other securities registered hereunder. In
addition, pursuant to Rule 429, the prospectuses included in this
registration statement are combined prospectuses and also relate to
unallocated amounts of Debt Securities, Common Shares, Preferred Shares,
Depositary Shares and Securities Warrants having an aggregate initial
offering price not in excess of the aggregate of the following dollar
amounts of securities that have not yet been offered for sale under the
indicated original registration statements on Form S-3: $688,000,000
pursuant to Registration Statement No. 33-41485 and $175,000,000 pursuant
to Registration Statement No. 33-43459, plus, in each case, Common Shares,
Preferred Shares or Depositary Shares that may be issued in exchange for,
or upon conversion of, such Debt Securities, Preferred Shares or Depositary
Shares; pursuant to Rule 457(o), no additional filing fee is due with
respect to such securities since the filing fees paid in connection
therewith were based on the maximum offering price of all the securities
covered. Filing fees of $500,000 and $125,000 were paid with respect to the
total amount of securities registered pursuant to Registration Statement
Nos. 33-41485 and 33-43459, respectively, of which $172,000 and $43,750,
respectively, represented the proportionate amount of the filing fee
associated with the respective amounts of such securities which have not
yet been offered for sale under such Registration Statements.
(2) Not applicable pursuant to General Instruction II.D. to Form S-3.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration
statement shall become effective on such date as the Commission, acting
pursuant to said section 8(a), may determine.
EXPLANATORY NOTE
This Registration Statement contains two forms of Prospectus: one for use
in connection with the offer and sale of Debt Securities and Debt Warrants,
including any Debt Securities convertible or exchangeable into or for
Common Shares, Preferred Shares or Depositary Shares, and one for use in
connection with the offer and sale of Common Shares, Preferred Shares and
Depositary Shares, including any such shares into or for which any
convertible or exchangeable Debt Securities, Preferred Shares or Depositary
Shares may be convertible or exchangeable, and warrants to purchase any
such shares. The aggregate amount of securities to which either such
Prospectus relates will be reduced by the aggregate initial offering price
of any securities issued and sold pursuant to the other Prospectus.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
SUBJECT TO COMPLETION
Dated August , 1995
Sears, Roebuck and Co.
Debt Securities and Debt Warrants
Sears, Roebuck and Co. (``Sears'') from time to time may offer its debt
securities consisting of debentures, notes and/or other unsecured evidences
of indebtedness (the ``Debt Securities'') and warrants to purchase or
receive Debt Securities (``Debt Warrants''). If so provided in the
accompanying Prospectus Supplement, the Debt Securities of any series may
be represented in whole or in part by one or more global notes registered
in the name of a depository's nominee and, if so represented, beneficial
interests in such global notes will be shown on, and transfers thereof will
be effected only through, records maintained by the depository and its
participants. The Debt Securities and Debt Warrants (collectively, the
``Securities'') will have an aggregate initial offering price not in excess
of $6,863,000,000, and may be offered, separately or together, as separate
series in amounts, at prices and on terms to be set forth in supplements to
this Prospectus. Sears may sell Securities to or through underwriters, and
also may sell Securities directly to other purchasers or through agents.
See ``Plan of Distribution''. The accompanying Prospectus Supplement or
Prospectus Supplements (the ``Prospectus Supplement'') sets forth the names
of any underwriters or agents involved in the sale of the Securities in
respect of which this Prospectus is being delivered (the ``Offered
Securities''), the principal amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters or agents.
The Registration Statement of which this Prospectus is a part also relates
to the offer and sale of common shares, par value $0.75 per share (``Common
Shares''), preferred shares, par value $1.00 per share (``Preferred
Shares''), depositary shares representing fractional interests in Preferred
Shares (``Depositary Shares'') and warrants to purchase or receive Common
Shares, Preferred Shares or Depositary Shares (``Equity Warrants''). Common
Shares, Preferred Shares, Depositary Shares and Equity Warrants, including
any such shares into or for which Debt Securities may be convertible or
exchangeable, will be offered and sold pursuant to a separate Prospectus
relating thereto. The aggregate amount of securities to which this
Prospectus may relate will be reduced by the aggregate initial offering
price of any securities issued pursuant to any such separate Prospectus.
The terms of the Securities, including, where applicable, the specific
designation, aggregate principal amount, denominations, maturity, premium,
if any, rate (which may be fixed or variable) and time of payment of
interest, if any, terms for redemption, conversion or exchange at the
option of Sears or the Holder, terms for sinking fund payments, the
exercise price of any Debt Warrants, the initial public offering price, the
names of, and the principal amounts, if any, to be purchased by
underwriters and the compensation of such underwriters, deferred pricing
arrangements, if any, and the other terms in connection with the offering
and sale of the Securities in respect of which this Prospectus is being
delivered, are set forth in the accompanying Prospectus Supplement.
As used herein, Securities shall include securities denominated in U.S.
dollars or, at the option of Sears if so specified in the applicable
Prospectus Supplement, in any other currency or in composite currencies or
in amounts determined by reference to an index.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1995
No dealer, salesperson or other person has been authorized to give any
information or to make any representation other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the registered
securities to which it relates or an offer to sell or the solicitation of
an offer to buy such securities in any jurisdiction to any person to whom
it is unlawful to make such offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information is correct as of any time subsequent to its date.
TABLE OF CONTENTS
Page
Available Information 3
Incorporation of Certain Documents by Reference 3
The Company 4
Use of Proceeds 4
Summary Financial Information 5
Ratio of Income to Fixed Charges 5
Description of Debt Securities 6
Description of Debt Warrants 11
Plan of Distribution 12
Legal Opinion 13
Experts 13
AVAILABLE INFORMATION
Sears is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the ``Exchange Act'') and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the ``Commission''). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities of the Commission at Room 1024, 450 Fifth
Street N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New
York, New York 10048; and Suite 1400, Citicorp Center, 500 W. Madison
Street, Chicago, Illinois 60661-2551; and copies of such materials can be
obtained from the public reference section of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy
statements and other information concerning Sears can also be inspected at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, the Chicago Stock Exchange Incorporated, 440 South
LaSalle Street, Chicago, Illinois 60605, and the Pacific Stock Exchange,
Inc., 301 Pine Street, San Francisco, California 94104.
Additional information regarding Sears and its consolidated subsidiaries
and the Securities is contained in the Registration Statement and the
exhibits relating thereto, filed with the Commission under the Securities
Act of 1933, as amended (the ``Act''). For further information pertaining
to Sears and its consolidated subsidiaries and the Securities, reference is
made to the Registration Statement, and the exhibits thereto, which may be
inspected without charge at the office of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, and copies thereof may be obtained
from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K for the fiscal year ended December 31, 1994,
the Quarterly Report on Form 10-Q for the quarterly period ended April 1,
1995, and the Current Reports on Form 8-K dated January 17, February 7,
April 20, April 25, May 15, June 1 and June 20, 1995, filed by Sears with
the Commission pursuant to Section 13 of the Exchange Act, are incorporated
in and made a part of this Prospectus by reference. Pursuant to Rule 412
promulgated by the Commission pursuant to the Act, the information
incorporated by reference in the Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 under Items 6 (Selected Financial Data), 7
(Management's Discussion and Analysis of Financial Condition and Results of
Operations) and 8 (Financial Statements and Supplementary Data) has been
superseded by the restated financial information included in the Current
Report on Form 8-K for May 15, 1995 reflecting the Company's Allstate
Insurance Group as discontinued operations.
All documents filed by Sears with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Securities (other than those portions of such documents described in
paragraphs (i), (k) and (l) of Item 402 of Regulation S-K promulgated by
the Commission) shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such
documents.
Sears will provide without charge to each person to whom a copy of this
Prospectus is delivered, on the written or oral request of any such person,
a copy of any or all of the documents incorporated herein by reference (not
including exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents). Written or telephone requests
for such copies should be directed to Sears, Roebuck and Co., Sears Tower,
Chicago, Illinois 60684, Attention: Director of Investor Relations, Dept.
962 (312/875-1468).
THE COMPANY
Sears originated from an enterprise established in 1886. It was
incorporated under the laws of New York in 1906. Its corporate headquarters
are located at Sears Tower, Chicago, Illinois 60684 (312/875-2500). Sears
and its consolidated subsidiaries (the ``Company'') conduct Domestic and
International merchandising operations. The Company, a multi-line retailer,
is among the largest retailers in the world on the basis of sales of
merchandise and services.
Domestic operations include Domestic merchandising and Domestic credit.
Domestic merchandising consists of the Company's core merchandising and
product services businesses in the United States and Puerto Rico. Domestic
credit operations primarily relate to the Sears Card, the largest
proprietary credit card in the United States, which is used to pay for
purchases of goods and services from Domestic merchandising.
International operations consist of merchandising and credit operations
conducted through majority-owned subsidiaries in Canada and Mexico.
On November 10, 1994 the Company announced a decision to distribute to
Sears common shareholders the Company's interest in its Allstate Insurance
Group (``Allstate'') in a tax-free spin-off (the ``Allstate spin-off'').
Allstate engages in property-liability insurance and life insurance in the
United States and Canada. The business of Allstate is conducted through The
Allstate Corporation (``Allcorp''), which was an 80.3%-owned subsidiary of
the Company prior to the Allstate spin-off. On June 30, 1995, Sears
completed the Allstate spin-off by means of a special dividend, to Sears
common shareholders of record on June 30, 1995, of all of the Allcorp
common stock owned by the Company.
On July 31, 1995 Sears announced that the Company had entered into an
agreement to sell the shopping center and retail community center business
of its Homart Development Co. unit and had sold its commercial office
building portfolio, for gross proceeds in the aggregate of approximately
$2.3 billion.
Allstate and Homart have been treated as discontinued operations in the
Company's consolidated financial statements.
The Company's continuing operations employ approximately 315,000 people,
including its Corporate staff.
USE OF PROCEEDS
The net proceeds to be received by Sears from the sale of the Securities
offered hereby will be added to its general funds for general corporate
purposes and initially will be used to effect a reduction of short-term
borrowings. It is anticipated that funds in addition to the net proceeds
from the sale of the Securities will be required from time to time to
continue expansion of the business of Sears and its subsidiaries, refinance
short-term debt and refund portions of existing long-term debt. Substantial
funds for these purposes are expected to be generated from operations, with
the balance from various means of external financing. It is anticipated
that Sears and its subsidiaries will continue their practice of short-term
borrowing and will, from time to time, incur additional long-term debt and
engage in securitization programs in which credit card receivables are sold
in public or private transactions, and may, from time to time, issue equity
securities.
SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary consolidated financial
information of the Company for the five years ended December 31, 1994. The
summary information should be read in conjunction with the financial
statements and financial statement schedules of the Company incorporated
herein by reference. Operating results and financial position reflect
Allstate, Homart and an affiliated company, Dean Witter, Discover & Co.,
and the Coldwell Banker Residential Services businesses and commercial
division as discontinued operations.
1994 1993 1992 1991 1990
(millions)
Operating results
Revenues $33,025 $30,444 $32,943 $32,250 $32,769
Costs and expenses 30,320 28,307 31,752 30,481 30,890
Restructuring - - 2,782 - 265
Interest 1,279 1,318 1,389 1,568 1,651
Operating income
(loss) 1,426 819 (2,980) 201 (37)
Other income (loss) 45 135 129 85 (21)
Income (loss) before
income taxes
(benefit) 1,471 954 (2,851) 286 (58)
Income taxes (benefit) 614 329 (1,039) 126 (13)
Income (loss) from
continuing operations 857 625 (1,812) 160 (45)
Income (loss) from
discontinued
operations 402 1,960 (247) 1,119 947
Extraordinary gain
(loss) 195 (211) - - -
Cumulative effect of
accounting changes - - (1,873) - -
Net income (loss) 1,454 2,374 (3,932) 1,279 902
Financial position
Retail customer
receivables $18,201 $15,906 $13,878 $13,537 $15,230
Property and
equipment, net 4,253 4,401 4,574 4,898 4,646
Merchandise
inventories 4,044 3,518 4,048 4,459 4,074
Net assets of dis-
continued operations 7,231 8,701 10,731 11,038 9,707
Total assets 37,312 37,911 39,540 38,636 36,907
Short-term borrowings 6,190 4,636 4,469 1,775 7,322
Long-term debt 9,985 10,790 12,432 16,398 10,782
Total debt 16,175 15,426 16,901 18,173 18,104
Percent of debt to
equity 150% 154% 157% 128% 141%
Shareholders' equity* 10,801 11,664 10,773 14,188 12,824
* The Allstate spin-off reduced shareholders' equity by approximately the
Company's investment in Allstate. The Company's investment in Allstate
included in shareholders' equity at December 31, 1994 was approximately
$6.76 billion.
RATIO OF INCOME TO FIXED CHARGES
The ratio of income to fixed charges for the Company for each of the years
ended December 31, 1994, 1993, 1991 and 1990 was 2.06, 1.66, 1.16 and 0.96,
respectively, and for the three- and twelve-month periods ended April 1,
1995 was 1.56 and 2.05, respectively. Earnings did not cover fixed charges
by $2,869 million for the year ended December 31, 1992. In the computation
of the ratio of income to fixed charges for the Company, income consists of
net income from continuing operations less undistributed net income of
unconsolidated subsidiaries plus fixed charges (excluding capitalized
interest) and federal and state income taxes. Fixed charges consist of
interest costs plus the portion of operating lease rentals which is
estimated to represent the interest element in such rentals.
DESCRIPTION OF DEBT SECURITIES
The following descriptions of the terms of the Debt Securities set forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by any Prospectus Supplement (the ``Offered Debt
Securities''), and the extent, if any, to which such general provisions may
apply to the Debt Securities so offered, will be described in the
Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued under one of the Indentures (each, an
``Indenture'') referred to in the following sentence, a copy of the form of
which has been filed as an exhibit to the Registration Statement. Sears may
enter into an Indenture with The Bank of New York, as Trustee, or with one
or more other Trustees eligible to act as Trustee under an Indenture
pursuant to the Trust Indenture Act of 1939, as amended (each, a
``Trustee''). The particular Indenture under which any series of Debt
Securities is to be issued, and the identity of the Trustee under such
Indenture, will be identified in the Prospectus Supplement relating to such
series of Debt Securities. The following summaries of certain provisions of
the Debt Securities and the Indenture do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain
terms. Whenever particular provisions or defined terms in the Indenture are
referred to herein, such provisions or defined terms are incorporated by
reference.
General
The Debt Securities will be unsecured obligations of Sears.
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and provides that Debt Securities may be issued
thereunder from time to time in one or more series.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms
of the Offered Debt Securities: (i) the title of the Offered Debt
Securities; (ii) any limit on the aggregate principal amount of the Offered
Debt Securities; (iii) the date or dates on which the Offered Debt
Securities will mature; (iv) the price (expressed as a percentage of the
aggregate principal amount thereof) at which the Offered Debt Securities
will be issued; (v) the rate or rates (which may be fixed or variable) per
annum at which the Offered Debt Securities will bear interest, if any; (vi)
the date from which such interest, if any, on the Offered Debt Securities
will accrue, the dates on which such interest, if any, will be payable, the
date on which payment of such interest, if any, will commence and the
Regular Record Dates for such Interest Payment Dates, if any; (vii) the
date or dates, if any, after or on which and the price or prices at which
the Offered Debt Securities may, pursuant to any optional or mandatory
redemption, conversion or exchange provisions, be redeemed, converted or
exchanged at the option of Sears or of the Holder thereof and the other
detailed terms and provisions of such optional or mandatory redemption;
(viii) any subordination provisions; (ix) the dates, if any, on which and
the price or prices at which the Offered Debt Securities will, pursuant to
any mandatory sinking fund provisions, or may, pursuant to any optional
sinking fund provisions, be redeemed by Sears, and the other detailed terms
and provisions of such sinking fund; (x) if other than the principal amount
thereof, the amount of Offered Debt Securities which shall be payable upon
declaration of acceleration of the Maturity thereof; (xi) the terms of any
warrants attached to the Offered Debt Securities; (xii) the currency or
currencies, including European Currency Units or other composite
currencies, in which Offered Debt Securities may be purchased and in which
principal, premium, if any, and interest, if any, on the Offered Debt
Securities will be payable; (xiii) any index used to determine the amount
of payments of principal, premium, if any, and interest, if any, on the
Offered Debt Securities; (xiv) whether the Offered Debt Securities are
issuable in whole or in part as one or more Global Securities and, in such
case, the name of the Depository for such Global Security or Global
Securities; (xv) the place or places, if other than as set forth in the
Indenture, where the principal, premium, if any, and interest, if any, on
the Offered Debt Securities will be payable; and (xvi) any other terms
relating to the Offered Debt Securities not inconsistent with the Indenture
but which may modify or delete any provision of the Indenture insofar as it
applies to such series; provided that no term thereof shall be modified or
deleted if imposed under the Trust Indenture Act of 1939, as amended, and
that any modification or deletion of the rights, duties or immunities of
the Trustee shall have been consented to in writing by the Trustee.
Principal, premium, if any, and interest, if any, will be payable, and the
Debt Securities will be transferable, at the office or agency of Sears
maintained for such purposes in the Borough of Manhattan of The City of New
York, which, except as otherwise specified in the Prospectus Supplement
relating to a particular series of Offered Debt Securities, will initially
be the principal corporate trust office of the Trustee, and at such other
places, if any, in the City of Chicago, the city in which the principal
executive offices of Sears are located or the city in which the principal
corporate trust office of the Trustee is located, as Sears may designate.
Unless other arrangements are made, interest will be paid by checks mailed
to the Holders at their registered addresses. (Sections 2.5, 3.1, 3.2)
If the principal, premium, if any, and interest, if any, will be payable in
a currency other than U.S. dollars, including European Currency Units or
another composite currency, and such currency is not available for payment
due to the imposition of exchange controls or other circumstances beyond
the control of Sears, Sears shall satisfy its payment obligations in U.S.
dollars on the basis of the Market Exchange Rate for such currency on the
latest date for which such rate was established on or before the date on
which payment is due. (Section 2.12)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 or any integral multiple thereof. No
service charge will be made for any registration of transfer or exchange of
the Offered Debt Securities, but Sears may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith. (Sections 2.2, 2.5)
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below
their stated principal amount. Federal income tax consequences and other
special considerations applicable to any such Original Issue Discount
Securities will be described in the Prospectus Supplement relating thereto.
``Original Issue Discount Security'' means any security which provides for
an amount less than the principal amount thereof to be due and payable upon
the declaration of acceleration of the Maturity thereof upon the occurrence
of default and the continuation thereof. (Sections 1.1, 6.1)
Certain Restrictions
Restrictions on Transfers of Property. The Indenture provides that Sears
will not transfer any Principal Property to any Subsidiary, unless the
Subsidiary, in connection with such transfer, delivers to the Company the
fair value of such property at the time of such transfer (as set forth in
an officer's certificate), within 120 days of the effective date of such
transfer. (Section 3.7) The Indenture does not restrict transfers of any
other property of Sears, and any transfer of property by Sears to any
Subsidiary would cause the holders of the Securities to be effectively
subordinated to the creditors of such Subsidiary.
Restrictions on Secured Debt. If Sears issues, assumes or guarantees any
notes, bonds, debentures or similar evidences of Funded Debt secured by any
mortgage, security interest, pledge or lien (``Mortgage'') on any Principal
Property of Sears, whether owned at the date of the Indenture or thereafter
acquired, Sears will secure the principal amount of the Debt Securities
equally and ratably with such secured Funded Debt, so long as such secured
Funded Debt is so secured, unless, after giving effect thereto, the
aggregate amount of all such secured Funded Debt, together with all
Attributable Debt of Sears with respect to Sale and Lease-Back Transactions
involving Principal Properties (with the exception of such transactions
which are excluded as described in ``Restrictions on Sale and Lease-Back
Transactions'' below), would not exceed 15% of Consolidated Net Tangible
Assets. (Section 3.5) These restrictions on secured Funded Debt will not
restrict Sears ability to transfer a Principal Property, subject to the
restrictions described in ``Restrictions on Transfers of Property'' above.
The above restrictions will not apply to Funded Debt secured by (a)
Mortgages on any property existing at the time of acquisition thereof by
Sears; (b) Mortgages on property of a corporation or other entity at the
time such corporation or other entity is merged into or consolidated with
Sears, or at the time of a sale, lease or other disposition of the
properties of such corporation or other entity (or division thereof) as an
entirety or substantially as an entirety to Sears, but only to the extent
that such Mortgage as a result of such merger, consolidation, sale, lease
or other disposition is not extended to property owned by Sears immediately
prior thereto; (c) Mortgages on property to secure all or part of the cost
of acquiring, substantially repairing or altering, constructing, developing
or substantially improving such property, or to secure Funded Debt incurred
to provide funds for any such purpose or for reimbursement of funds
previously expended for any such purpose, provided that the commitment of
the creditor to extend the credit secured by any such Mortgage has been
obtained not later than 12 months after the later of (i) the completion of
the acquisition, substantial repair or alteration, construction,
development or substantial improvement of such property or (ii) the placing
in operation of such property or of such property as so substantially
repaired or altered, constructed, developed or substantially improved; (d)
Mortgages securing Funded Debt payable on demand or not more than one year
after the date as of which the determination is made (excluding any Funded
Debt renewable or extendable at the option of Sears for a period or periods
ending more than one year after the date as of which such determination is
made); or (e) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Mortgage
referred to in clauses (a) through (d) above and not otherwise authorized
by said clauses, provided that Funded Debt may only be secured in
connection with such extension, renewal or replacement to the extent of the
principal amount of Funded Debt, plus any premium or fee payable in
connection therewith, so secured at the time of such extension, renewal or
replacement. (Section 3.5)
Restrictions on Sale and Lease-Back Transactions. Sears will not enter into
any Sale and Lease-Back Transaction with respect to any Principal Property
unless, after giving effect thereto, the aggregate amount of all
Attributable Debt with respect to such transactions plus all Funded Debt
secured by Mortgages on Principal Properties (with the exception of secured
Funded Debt which is excluded as described in ``Restrictions on Secured
Debt'' above), would not exceed 15% of Consolidated Net Tangible Assets.
(Section 3.6)
This restriction will not apply to any Sale and Lease-Back Transaction if
(a) the lease is for a term, including any renewal thereof at the option of
the lessor, of not more than three years; (b) the commitment by or on
behalf of the purchaser is obtained 12 months or less after the later of
(i) the completion of the acquisition, substantial repair or alteration,
construction or substantial improvement of such Principal Property or (ii)
the placing in operation of such Principal Property or of such Principal
Property as so substantially repaired or altered, constructed, developed or
substantially improved; (c) the Attributable Debt with respect to such
transaction does not exceed the principal amount of Funded Debt of the
Company secured by a mortgage on such property to which the restrictions
described in ``Restrictions on Secured Debt'' would not apply in accordance
with clauses (a), (b), (c) and (e) thereof; or (d) Sears, within 180 days
after the effective date of such transaction, (i) in the case of a sale or
transfer for cash, applies or causes to be applied an amount equal to the
net proceeds thereof (but not in excess of the net book value of such
Principal Property at the date of such sale or transfer), or (ii) in the
case of a sale or transfer otherwise than for cash, applies or causes to be
applied an amount equal to the fair value (as set forth in an officer's
certificate but not in excess of the net book value of such Principal
Property at the date of such sale or transfer) of the Principal Property so
leased, to the retirement of Debt Securities or other Funded Debt of Sears;
provided, that any such retirement of Debt Securities will be in accordance
with the terms of the Indenture and such Debt Securities. (Section 3.6)
The restrictions described above would not necessarily prevent a highly
leveraged transaction involving Sears. Except as may otherwise be provided
in the accompanying Prospectus Supplement, there are no other provisions of
the Debt Securities which are designed to afford protection in the event of
a highly leveraged transaction involving Sears.
Certain Definitions
``Assets'' means the total amount of assets (less reserves properly
deductible from such assets) other than good will, trade names, trademarks,
patents, and other like intangibles, which under good accounting practice
would appear on a consolidated balance sheet of Sears and its Subsidiaries;
provided, however, that inventories will be included in Assets in an amount
equal to that which would appear on such balance sheet if the first-in,
first-out method on inventory accounting were used in determining the
amount of such inventories.
``Attributable Debt'' means, in respect of any Sale and Lease-Back
Transaction, as of the time of the determination, the lesser of (i) the
sale price of the Principal Property so leased multiplied by a fraction the
numerator of which is the remaining portion of the base term of the lease
included in such transaction and the denominator of which is the base term
of such lease, and (ii) the total obligation (discounted to present value
at the highest rate of interest specified by the terms of any series of
Debt Securities then outstanding compounded semiannually) of the lessee for
rental payments (other than percentage rents based on sales and amounts
required to be paid on account of property taxes as well as maintenance,
repairs, insurance, water rates and other items which do not constitute
payments for property rights) during the remaining portion of the base term
of the lease included in such transaction.
``Consolidated Net Tangible Assets'' means the sum of (a) the difference
between (i) the total amount of Assets on a consolidated balance sheet of
Sears and its Subsidiaries prepared in accordance with good accounting
practice less (ii) the total amount of Liabilities on a consolidated
balance sheet of Sears and its Subsidiaries prepared in accordance with
good accounting practice, plus (b) the total Funded Debt on a consolidated
balance sheet of Sears and its Subsidiaries prepared in accordance with
good accounting practice.
``Funded Debt'' means all indebtedness for borrowed money (other than
Subordinated Debt) which under good accounting practice would appear as
long-term debt on a consolidated balance sheet of Sears and its
Subsidiaries.
``Liabilities'' means the amount of all liabilities (excluding reserves
deducted in determining Assets and liabilities which under good accounting
practice would be contingent) which under good accounting practice would be
included as liabilities in a consolidated balance sheet of Sears and its
Subsidiaries (excluding liabilities due to pension and other
post-retirement liabilities, unearned maintenance agreement income,
Subordinated Debt, deferred income taxes, capital stock, capital in excess
of par or stated value, surplus and surplus reserves) plus the amount of
all guarantees of liabilities of others or of dividends not already
included in such calculation.
``Principal Property'' means all real property owned by Sears constituting
a part of any store, warehouse or distribution center located within one of
the 50 states of the United States or the District of Columbia, but only if
the net book value on the consolidated balance sheet of Sears and its
Subsidiaries, prepared in accordance with good accounting practice, of all
real property constituting a part of such store, warehouse or distribution
center exceeds .30% of Consolidated Net Tangible Assets and provided that
Principal Property shall not include any such property that, as set forth
in an officer's certificate, is not of material importance to the total
business conducted by Sears and its Subsidiaries, considered as a whole.
``Sale and Lease-Back Transaction'' means any arrangement whereby (a)
property has been or is to be sold or transferred by Sears to any Person
with the intention on the part of Sears of taking back a lease of such
property pursuant to which the rental payments are calculated to amortize
the purchase price of such property substantially over the useful life of
such property and (b) such property is in fact so leased by Sears.
``Subordinated Debt'' means indebtedness of Sears with respect to which, in
the event of any liquidation, dissolution or other winding up of Sears or
any receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization or other similar proceedings relative to Sears or its
property, all principal, premium (if any) and interest due on those Debt
Securities which, by their terms, are not subordinate in right of payment
to any other securities (whether or not outstanding) and on all other debt
of Sears ranking on a parity with such Debt Securities shall first be paid
in full before any payment is made upon such indebtedness, and if in the
event and during the continuation of any default, irrespective of any
period of grace, in the payment of principal, premium (if any) or interest
on such Debt Securities or such parity debt, no payment of principal,
premium (if any) or interest is permitted to be made on such indebtedness.
``Subsidiary'' means any corporation of which shares of voting stock
entitled to elect a majority of the directors are at the time owned
directly or indirectly by Sears or its other Subsidiaries.
Defaults
The following are defaults with respect to any series of Debt Securities:
(a) failure to pay the principal amount on such series when due and
payable; (b) failure to pay any interest on such series when due, continued
for 30 days (unless the entire amount of such payment is deposited by Sears
with the Trustee or with a paying agent prior to the expiration of 30
days); (c) failure to perform any other covenant of Sears in the Indenture
(other than a covenant included in the Indenture solely for the benefit of
any series of Debt Securities other than that series), continued for 60
days after written notice; (d) acceleration of $100,000,000 or more in
principal amount of indebtedness for borrowed money of Sears (including
acceleration with respect to Debt Securities other than that series) under
the terms of the instrument under which such indebtedness is issued or
secured (including the Indenture), if such indebtedness shall not have been
discharged or such acceleration is not annulled within 30 days after
written notice or prior to the time principal owed on the outstanding Debt
Securities of that series shall be declared due and payable, except as a
result of compliance with applicable laws, orders or decrees; and (e)
certain events of bankruptcy, insolvency, or reorganization. If a default
shall occur and be continuing with respect to any series of Debt
Securities, the Trustee or the Holders of a majority in principal amount of
the outstanding Debt Securities of that series may declare the principal
amount of such series (or, if the Debt Securities of that series are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms of that series) due and payable immediately, which
declaration may, in certain instances, be annulled by the Holders of a
majority of the principal amount of outstanding Debt Securities of that
series. In the case of such declaration, there would become due and payable
such principal amount plus any accrued interest or other periodic payments.
(Section 6.1)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder previously shall have given to the Trustee
written notice of a default and unless also the Holders of a majority of
the principal amount of outstanding Debt Securities of that series shall
have made written request upon the Trustee, offering reasonable indemnity,
to institute such proceeding as trustee, and the Trustee shall have
neglected or refused to institute such proceeding within a reasonable time.
However, the right of any Holder of any Debt Security of that series to
enforce the payment of principal and interest on such Debt Security, on or
after the due dates expressed in such Debt Security, may not be impaired or
affected. (Section 6.7)
Sears is required to furnish annually to the Trustee statements as to the
performance or fulfillment of its covenants, agreements or conditions in
the Indenture and as to the absence of default. (Section 3.7)
Modification or Amendment of the Indenture
Modifications and alterations of the Indenture may be made by Sears with
the consent of the Holders of a majority of the aggregate principal amount
of the outstanding Debt Securities of each series affected by the
modification or alteration, provided that no such change shall be made
without the consent of the Holders of each Debt Security then outstanding
affected thereby which will (a) permit the extension of the time of payment
of any payment on any such Debt Security, or a reduction in any such
payment or (b) reduce the above-stated percentage of Holders of any series
of Debt Securities whose consent is required to modify or alter the
Indenture. (Article XI)
Defeasance
Unless otherwise provided for in the accompanying Prospectus Supplement,
Sears may discharge the Indenture with respect to Debt Securities of any
series (except for certain obligations to register the transfer or exchange
of Debt Securities of such series, replace mutilated, destroyed, lost and
stolen Debt Securities of such series, maintain paying agencies and hold
moneys for payment in trust) upon the deposit with the Trustee or a paying
agent, in trust, of (1) money in an amount sufficient, or (2) U.S.
Government Obligations (if the Debt Securities are denominated in U.S.
dollars) or Eligible Obligations (if the Debt Securities are denominated in
a Foreign Currency) which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an
amount sufficient, or (3) any combination thereof in an amount sufficient,
to pay the principal, premium, if any, and each installment of interest on
the Debt Securities of such series on the dates such payments are due in
accordance with the terms of the Indenture and such Debt Securities. Such a
trust may only be established if, among other things, Sears has received a
ruling from the Internal Revenue Service or an opinion of recognized
counsel who is not an employee of Sears, in either case to the effect that,
among other things, the Holders of the Debt Securities of such series will
not recognize income, gain or loss for federal income tax purposes as a
result of such deposit and defeasance of the Indenture and will be subject
to federal income tax on the same amount and in the same manner and at the
same times, as would have been the case if such deposit and defeasance had
not occurred. Notwithstanding such deposit, the obligations of Sears under
the Indenture to pay interest and principal shall remain in full force and
effect until the Debt Securities of such series have been paid in full.
(Section 13.4)
If and when a ruling from the Internal Revenue Service or an opinion of
recognized counsel can be provided without reliance upon the continuation
of Sears obligations regarding the payment of interest and principal, then
such obligations of Sears shall cease upon delivery to the Trustee of such
ruling or opinion and compliance with the other conditions precedent
provided for in the Indenture. Under present ruling positions of the
Internal Revenue Service, such a ruling is not obtainable. (Section 13.4)
Regarding the Trustee
The Bank of New York, which Sears anticipates which will be the Trustee
under one of the Indentures described herein, performs banking and other
services for Sears. It is also the Trustee under the indenture governing
Sears Medium-Term Notes Series VI.
DESCRIPTION OF DEBT WARRANTS
The following descriptions of the terms of the Debt Warrants set forth
certain general terms and provisions of the Debt Warrants to which any
Prospectus Supplement may relate. The particular terms of the Debt Warrants
offered by any Prospectus Supplement (the ``Offered Debt Warrants''), and
the extent, if any, to which such general provisions may apply to the Debt
Warrants so offered, will be described in the Prospectus Supplement
relating to such Offered Debt Warrants.
Sears may issue Debt Warrants to purchase or receive Debt Securities. Debt
Warrants may be issued independently or together with Offered Debt
Securities, and may be attached thereto or separate therefrom. The Offered
Debt Warrants are to be issued under a warrant agreement (a ``Debt Warrant
Agreement'') to be entered into between Sears and a warrant agent (the
``Warrant Agent'') named in the applicable Prospectus Supplement relating
to the Offered Debt Warrants, and may be issued in one or more series. Debt
Warrants will be evidenced by Debt Warrant Certificates. Copies of the
forms of Debt Warrant Agreement and Debt Warrant Certificates relating to
any series of Offered Debt Warrants will be filed as exhibits to or
incorporated by reference in the Registration Statement. The following
summaries of certain provisions of the Debt Warrants, Debt Warrant
Agreements and Debt Warrant Certificates do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all
the provisions of the Debt Warrant Agreements and the Debt Warrant
Certificates.
General
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Warrants for the following terms of the Offered Debt
Warrants: (i) the price at which the Offered Debt Warrants will be issued;
(ii) the currency or currencies, including composite currencies, in which
the Offered Debt Warrants may be purchased; (iii) the designation,
aggregate principal amount, currency or currencies, denominations and terms
of the Debt Securities that may be purchased upon exercise of each Offered
Debt Warrant; (iv) if applicable, the designation and terms of the Debt
Securities with which the Offered Debt Warrants are issued and the number
of Offered Debt Warrants issued with each of such Debt Securities; (v) if
applicable, the date on and after which the Offered Debt Warrants and the
related Debt Securities will be separately transferable; (vi) the principal
amount of Debt Securities purchasable upon exercise of each Offered Debt
Warrant and the price at which and currency or currencies in which such
principal amount of Debt Securities may be purchased upon such exercise;
(vii) the date on which the right to exercise the Offered Debt Warrants
shall commence and the date (the ``Expiration Date'') on which such right
shall expire; (viii) whether the Debt Warrant Certificates representing the
Offered Debt Warrants will be issued in registered or bearer form; (ix) any
applicable United States federal income tax consequences; and (x) any other
material terms of the Offered Debt Warrants.
Debt Warrant Certificates may be exchanged for new Debt Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised, at the
corporate trust office of the Warrant Agent or any other office indicated
in the Prospectus Supplement relating to such series of Offered Debt
Warrants. Prior to the exercise of any Debt Warrant, holders of such Debt
Warrant will not have any of the rights of Holders of the Debt Securities
purchasable upon such exercise, including the right to receive payments of
principal, premium, if any, or interest, if any, on the Debt Securities
purchasable upon such exercise or to enforce covenants in the applicable
Indenture.
The Warrant Agent will act solely as an agent of Sears in connection with
the Debt Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Debt Warrant
Certificates or beneficial owners of Debt Warrants.
Exercise
Each Offered Debt Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities at such exercise price as shall in each
case be set forth in, or determinable as set forth in, the applicable
Prospectus Supplement. After the close of business on the Expiration Date
(or such later date to which such Expiration Date may be extended by
Sears), unexercised Debt Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement, a Debt Warrant may be exercised by
delivery to the Warrant Agent of the Debt Warrant Certificate evidencing
such Debt Warrant properly completed and duly executed, together with
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Debt Securities purchasable upon such exercise.
PLAN OF DISTRIBUTION
General. Sears may sell Securities to or through underwriters, and also may
sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Prospectus Supplement
will describe the method of distribution of the Offered Securities.
In connection with the sale of Securities, underwriters may receive
compensation from Sears or from purchasers of Securities for whom they may
act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers
for whom they may act as agent. Underwriters, dealers and agents that
participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions received by them and any
profit on the resale of Securities by them may be deemed to be underwriting
discounts and commissions, under the Act. Any such underwriter or agent
will be identified, and any such compensation will be described, in the
Prospectus Supplement.
Under agreements which may be entered into by Sears, underwriters, dealers
and agents who participate in the distribution of Securities may be
entitled to indemnification by Sears against certain liabilities, including
liabilities under the Act.
Delayed Delivery Arrangements. If so indicated in the Prospectus
Supplement, Sears will authorize dealers or other persons acting as Sears
agents to solicit offers by certain institutions to purchase Securities
from Sears pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others,
but in all cases such institutions must be approved by Sears. The
obligations of any purchaser under any such contract will not be subject to
any conditions except that (i) the purchase of the Offered Securities shall
not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject, and (ii) if the Offered
Securities are also being sold to underwriters, Sears shall have sold to
such underwriters the Offered Securities not sold for delayed delivery. The
dealers and such other persons will not have any responsibility in respect
of the validity or performance of such contracts.
Deferred Pricing Arrangements. The Prospectus Supplement relating to an
issue of Securities will disclose any deferred pricing arrangement between
Sears and any entity acting as an underwriter which would permit Sears to
determine its ultimate cost of funds pertaining to such Securities at a
later date through certain transactions indexed to U.S. Treasury
securities. Any such arrangement would be made pursuant to a deferred
pricing agreement signed simultaneously with the pricing agreement which
supplements the underwriting agreement. The deferred pricing agreement
would contain the formula used to determine any post-closing purchase price
adjustments.
LEGAL OPINION
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Offered Securities, the legality of the Securities
will be passed upon for Sears by Robert J. Pence, Senior Counsel, Corporate
Law Department, of Sears. At July 31, 1995, Mr. Pence owned 413 Sears
common shares, including shares credited to his account in The Savings and
Profit Sharing Fund of Sears Employees as of June 30, 1995, and had options
granted under Sears employees stock plans relating to 3,920 Sears common
shares.
EXPERTS
The financial statements incorporated by reference in this Prospectus and
the Summary Financial Information included in this Prospectus, have been
audited by Deloitte & Touche LLP, independent certified public accountants,
as stated in their report on the financial statements incorporated by
reference herein (which report expresses an unqualified opinion and
includes an explanatory paragraph related to the Company changing its
method of accounting for postretirement benefits in 1992) and their report
on the Summary Financial Information included in Exhibit 99 to the
Registration Statement. Such financial statements and Summary Financial
Information have been incorporated by reference and included herein,
respectively, in reliance upon the reports of such firm and given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information which is
incorporated herein by reference, Deloitte & Touche LLP have applied
limited procedures in accordance with professional standards for a review
of such information. However, as stated in their report included in the
Quarterly Report on Form 10-Q for the quarter ended April 1, 1995 and
incorporated by reference herein, they did not audit and they did not
express an opinion on that interim financial information. Accordingly, the
degree of reliance on their report on such information should be restricted
in light of the limited nature of the review procedures applied. Deloitte &
Touche LLP are not subject to the liability provisions of Section 11 of the
Securities Act of 1933 for their report on the unaudited interim financial
information because that report is not a ``report'' or a ``part'' of the
registration statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any State.
SUBJECT TO COMPLETION
Dated August , 1995
Sears, Roebuck and Co.
Common Shares
Preferred Shares
Depositary Shares
Equity Warrants
Sears, Roebuck and Co. (``Sears'') from time to time may offer its (i)
common shares, par value $0.75 per share (the ``Common Shares''), or (ii)
preferred shares, par value $1.00 per share (the ``Preferred Shares''). If
so provided in the accompanying Prospectus Supplement, the Preferred Shares
may be represented by Depositary Shares (the ``Depositary Shares,'' and,
collectively with Common Shares and Preferred Shares, ``Equity
Securities'') as provided herein. Sears may also from time to time offer
warrants to purchase or receive Common Shares (``Common Share Warrants''),
Preferred Shares (``Preferred Share Warrants'') or Depositary Shares
(``Depositary Share Warrants,'' and, collectively with Common Share
Warrants and Preferred Share Warrants, ``Equity Warrants''), separately or
together with Equity Securities. The Equity Securities and Equity Warrants
(collectively, the ``Securities'') will have an aggregate initial offering
price not in excess of $6,863,000,000, and may be offered as separate
series, in amounts, at prices and on terms to be set forth in supplements
to this Prospectus. Sears may sell Securities to or through underwriters,
and also may sell Securities directly to other purchasers or through
agents. See ``Plan of Distribution.'' The accompanying Prospectus
Supplement or Prospectus Supplements (the ``Prospectus Supplement'') sets
forth the names of any underwriters or agents involved in the sale of the
Securities in respect of which this Prospectus is being delivered (the
``Offered Securities''), the amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters or agents.
The Registration Statement of which this Prospectus is a part also relates
to the offer and sale of Debt Securities and Debt Warrants. Debt Securities
and Debt Warrants, including any Debt Securities convertible or
exchangeable into or for the Securities to which this Prospectus relates,
will be offered and sold pursuant to a separate Prospectus relating
thereto. The aggregate amount of securities to which this Prospectus may
relate will be reduced by the aggregate initial offering price of any
securities issued pursuant to any such separate Prospectus.
Sears Common Shares are listed on the New York, Chicago and Pacific Stock
Exchanges and certain foreign exchanges.
The terms of the Securities, including, where applicable, the number of
shares, the initial public offering price, the exercise price of any Equity
Warrants, and any other terms in connection with the offer or sale of the
Securities in respect of which this Prospectus is being delivered, are set
forth in the accompanying Prospectus Supplement. If the Securities in
respect of which this Prospectus is being delivered are Preferred Shares or
Depositary Shares, the Prospectus Supplement will set forth, where
applicable, the title, dividend and voting rights, redemption provisions,
liquidation preference, sinking fund provisions, any class or classes of
Securities into or for which such Preferred Shares or Depositary Shares are
convertible or exchangeable and the conversion or exchange terms, and the
other terms thereof, if any, as well as any listing or planned listing
thereof on a securities exchange.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1995
No dealer, salesperson or other person has been authorized to give any
information or to make any representation other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the registered
securities to which it relates or an offer to sell or the solicitation of
an offer to buy such securities in any jurisdiction to any person to whom
it is unlawful to make such offer or solicitation in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information is correct as of any time subsequent to its date.
TABLE OF CONTENTS
Page
Available Information 3
Incorporation of Certain Documents by Reference 3
The Company 4
Use of Proceeds 4
Summary Financial Information 5
Ratio of Income to Combined Fixed Charges and
Preferred Share Dividends 6
Description of Capital Stock 6
Description of Sears Common Shares 6
Description of Offered Preferred Shares 7
Description of 8.88% Preferred Shares 10
Certain Restrictions 12
Description of Depositary Shares 12
Description of Equity Warrants 16
Plan of Distribution 17
Legal Opinion 17
Experts 17
AVAILABLE INFORMATION
Sears is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the ``Exchange Act'') and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the ``Commission''). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities of the Commission at Room 1024, 450 Fifth
Street N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300, New
York, New York 10048; and Suite 1400, Citicorp Center, 500 W. Madison
Street, Chicago, Illinois 60661-2511; copies of such materials can be
obtained from the public reference section of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, at prescribed rates. Reports, proxy
statements and other information concerning Sears can also be inspected at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New
York, New York 10005, the Chicago Stock Exchange Incorporated, 440 South
LaSalle Street, Chicago, Illinois 60605, and the Pacific Stock Exchange,
Inc., 301 Pine Street, San Francisco, California 94104.
Additional information regarding Sears and its consolidated subsidiaries
and the Securities is contained in the Registration Statement and the
exhibits relating thereto, filed with the Commission under the Securities
Act of 1933, as amended (the ``Act''). For further information pertaining
to Sears and its consolidated subsidiaries and the Securities, reference is
made to the Registration Statement, and the exhibits thereto, which may be
inspected without charge at the office of the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549, and copies thereof may be obtained
from the Commission at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K for the fiscal year ended December 31, 1994
(including the description of Sears Common Shares in Item 5 thereof), the
Quarterly Report on Form 10-Q for the quarterly period ended April 1, 1995,
and the Current Reports on Form 8-K dated January 17, February 7, April 20,
April 25, May 15, June 1 and June 20,1995, filed by Sears with the
Commission pursuant to Section 13 of the Exchange Act, are incorporated in
and made a part of this Prospectus by reference. Pursuant to Rule 412
promulgated by the Commission pursuant to the Act, the information
incorporated by reference in the Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 under Items 6 (Selected Financial Data), 7
(Management's Discussion and Analysis of Financial Condition and Results of
Operations) and 8 (Financial Statements and Supplementary Data) has been
superseded by the restated financial information included in the Current
Report on Form 8-K for May 15, 1995 reflecting the Company's Allstate
Insurance Group as discontinued operations.
All documents filed by Sears with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Securities (other than those portions of such documents described in
paragraphs (i), (k) and (l) of Item 402 of Regulation S-K promulgated by
the Commission) shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such
documents.
Sears will provide without charge to each person to whom a copy of this
Prospectus is delivered, on the written or oral request of any such person,
a copy of any or all of the documents incorporated herein by reference (not
including exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents). Written or telephone requests
for such copies should be directed to Sears, Roebuck and Co., Sears Tower,
Chicago, Illinois 60684, Attention: Director of Investor Relations, Dept.
962 (312/875-1468).
THE COMPANY
Sears originated from an enterprise established in 1886. It was
incorporated under the laws of New York in 1906. Its corporate headquarters
are located at Sears Tower, Chicago, Illinois 60684 (312/875-2500). Sears
and its consolidated subsidiaries (the ``Company'') conduct Domestic and
International merchandising operations. The Company, a multi-line retailer,
is among the largest retailers in the world on the basis of sales of
merchandise and services.
Domestic operations include Domestic merchandising and Domestic credit.
Domestic merchandising consists of the Company's core merchandising and
product services businesses in the United States and Puerto Rico. Domestic
credit operations primarily relate to the Sears Card, the largest
proprietary credit card in the United States, which is used to pay for
purchases of goods and services from Domestic merchandising.
International operations consist of merchandising and credit operations
conducted through majority-owned subsidiaries in Canada and Mexico.
On November 10, 1994 the Company announced a decision to distribute to
Sears common shareholders the Company's interest in its Allstate Insurance
Group (``Allstate'') in a tax-free spin-off (the ``Allstate spin-off'').
Allstate engages in property-liability insurance and life insurance in the
United States and Canada. The business of Allstate is conducted through The
Allstate Corporation (``Allcorp''), which was an 80.3%-owned subsidiary of
the Company prior to the Allstate spin-off. On June 30, 1995, Sears
completed the Allstate spin-off by means of a special dividend, to Sears
common shareholders of record on June 30, 1995, of all of the Allcorp
common stock owned by the Company.
On July 31, 1995 Sears announced that the Company had entered into an
agreement to sell the shopping center and retail community center business
of its Homart Development Co. unit and had sold its commercial office
building portfolio, for gross proceeds in the aggregate of approximately
$2.3 billion.
Allstate and Homart have been treated as discontinued operations in the
Company's consolidated financial statements.
The Company's continuing operations employ approximately 315,000 people,
including its Corporate staff.
USE OF PROCEEDS
The net proceeds to be received by Sears from the sale of the Securities
offered hereby will be added to its general funds for general corporate
purposes and initially will be used to effect a reduction of short-term
borrowings. It is anticipated that funds in addition to the net proceeds
from the sale of the Securities will be required from time to time to
continue expansion of the business of Sears and its subsidiaries, refinance
short-term debt and refund portions of existing long-term debt. Substantial
funds for these purposes are expected to be generated from operations, with
the balance from various means of external financing. It is anticipated
that Sears and its subsidiaries will continue their practice of short-term
borrowing and will, from time to time, incur additional long-term debt and
engage in securitization programs in which credit card receivables are sold
in public or private transactions, and may, from time to time, issue equity
securities.
SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary consolidated financial
information of the Company for the five years ended December 31, 1994. The
summary information should be read in conjunction with the financial
statements and financial statement schedules of the Company incorporated
herein by reference. Operating results and financial position reflect
Allstate, Homart and an affiliated company, Dean Witter, Discover & Co.,
and the Coldwell Banker Residential Services businesses, and commercial
division as discontinued operations.
1994 1993 1992 1991 1990
(millions, except per share amounts)
Operating results
Revenues $33,025 $30,444 $32,943 $32,250 $32,769
Costs and expenses 30,320 28,307 31,752 30,481 30,890
Restructuring - - 2,782 - 265
Interest 1,279 1,318 1,389 1,568 1,651
Operating income
(loss) 1,426 819 (2,980) 201 (37)
Other income (loss) 45 135 129 85 (21)
Income (loss) before
income taxes
(benefit) 1,471 954 (2,851) 286 (58)
Income taxes
(benefit) 614 329 (1,039) 126 (13)
Income (loss) from
continuing operations 857 625 (1,812) 160 (45)
Income (loss) from
discontinued operations 402 1,960 (247) 1,119 947
Extraordinary gain
(loss) 195 (211) - - -
Cumulative effect of
accounting changes - - (1,873) - -
Net income (loss) 1,454 2,374 (3,932) 1,279 902
Average common shares
outstanding 389 383 370 344 343
Per common share:
Income (loss) from
continuing operations $2.13 $1.56 $(4.98) $0.45 $(0.13)
Net income (loss) 3.66 6.13 (10.72) 3.71 2.63
Dividends* $1.60 $1.60 $2.00 $2.00 $2.00
Financial position
Retail customer
receivables $18,201 $15,906 $13,878 $13,537 $15,230
Property and
equipment, net 4,253 4,401 4,574 4,898 4,646
Merchandise inventories 4,044 3,518 4,048 4,459 4,074
Net assets of dis-
continued operations 7,231 8,701 10,731 11,038 9,707
Total assets 37,312 37,911 39,540 38,636 36,907
Short-term borrowings 6,190 4,636 4,469 1,775 7,322
Long-term debt 9,985 10,790 12,432 16,398 10,782
Total debt 16,175 15,426 16,901 18,173 18,104
Common Shareholders'
equity** 9,240 10,103 9,212 13,863 12,824
Total Shareholders'
equity** 10,801 11,664 10,773 14,188 12,824
* Sears paid a quarterly dividend of $.40 per common share for each
quarter in fiscal 1994 and 1993 and the first two quarters of fiscal
1995. Following the Allstate spin-off, Sears anticipates that it will
reduce its quarterly dividend to $.23 per common share. Although Sears
intends to continue paying dividends, the payment and amount of
dividends is subject to the discretion of its Board of Directors and
will depend on Sears results of operations, financial condition, cash
requirements, future prospects and other factors deemed relevant by its
Board of Directors.
** The Allstate spin-off reduced shareholders' equity by approximately the
Company's investment in Allstate. The Company's investment in Allstate
included in shareholders' equity at December 31, 1994 was approximately
$6.76 billion.
RATIO OF INCOME TO COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDENDS
The ratio of income to combined fixed charges and preferred share dividends
for Sears for each of the years ended December 31, 1994, 1993, 1991 and
1990 was 1.76, 1.45, 1.15 and 0.96, respectively, and for the three- and
twelve-month periods ended April 1, 1995 was 1.37 and 1.77, respectively.
Earnings did not cover combined fixed charges and preferred share dividends
by $2,989 million for the year ended December 31, 1992.
In the computation of the ratio of income to combined fixed charges and
preferred share dividends for Sears, income consists of net income from
continuing operations less undistributed net income of unconsolidated
subsidiaries plus fixed charges (excluding capitalized interest) and
federal and state income taxes. Combined fixed charges and preferred share
dividends consist of interest costs plus the portion of operating lease
rentals which is estimated to represent the interest element in such
rentals plus the amount of pretax income necessary to cover any preferred
share dividends.
Sears was not obligated to pay any preferred share dividends in 1990 but
was so obligated during the years 1992 through 1994 and for a portion of
the year 1991. The above-stated ratios for such years reflect combined
fixed charges and preferred share dividends.
DESCRIPTION OF CAPITAL STOCK
The following summaries of certain provisions of the Restated Certificate
of Incorporation, as amended (the ``Certificate of Incorporation''), of
Sears do not purport to be complete and are subject to, and qualified in
their entirety by reference to, the provisions of the Certificate of
Incorporation, which is filed as an exhibit to the Registration Statement
of which this Prospectus forms a part.
The Certificate of Incorporation authorizes the issuance of 1,000,000,000
Common Shares, par value $0.75 per share, and 50,000,000 Preferred Shares,
par value $1.00 per shares. As of July 1, 1995, 389,366,149 Common Shares
and 3,250,000 8.88% Preferred Shares, First Series (the ``8.88% Preferred
Shares'') were outstanding. Additional Preferred Shares may be issued in
series with rights and privileges as authorized by the Sears Board of
Directors.
Description of Sears Common Shares
Subject to the restrictions on dividends described below under ``Certain
Restrictions'' and the rights of the holders of the 8.88% Preferred Shares
described below under ``Description of 8.88% Preferred Shares'' and any
Preferred Shares which may hereafter be issued, each holder of Common
Shares is entitled to one vote per share, to vote cumulatively for the
election of directors, to dividends declared by Sears Board of Directors,
and upon liquidation to share in the assets of Sears pro rata in accordance
with his or her holdings after payment of all liabilities and obligations.
The holders of Common Shares have no preemptive, redemption, subscription
or conversion rights. Sears Board of Directors is divided into three
classes serving staggered three-year terms. Because the Board is
classified, shareholders wishing to exercise cumulative voting rights to
assure the election of one or more directors must own approximately three
times as many shares as would be required if the Board were not classified.
Directors may be removed only for cause upon the affirmative vote of at
least 75% of the shares entitled to vote. Such a vote is also required to
alter, amend or repeal, or to adopt any provisions inconsistent with,
Article 5 of the Certificate of Incorporation concerning directors, or to
fix the number of directors by shareholder vote.
First Chicago Trust Company of New York is the transfer agent and registrar
for the Common Shares.
Reference is made to the Prospectus Supplement relating to a particular
offering of Common Shares (the ``Offered Common Shares'') for the price at
which the Offered Common Shares will be issued, the terms of any warrants
being offered together with such Offered Common Shares and any other terms
of such offering.
Description of Offered Preferred Shares
General
The following descriptions of the terms of the Preferred Shares set forth
certain general terms and provisions of the Preferred Shares to which any
Prospectus Supplement may relate. The particular terms of the Preferred
Shares offered by any Prospectus Supplement (the ``Offered Preferred
Shares''), and the extent, if any, to which such general provisions may
apply to the Preferred Shares so offered, will be specified in the
Prospectus Supplement relating to such Offered Preferred Shares.
Each series of Preferred Shares will be established under a Certificate of
Amendment of the Certificate of Incorporation of Sears, which Certificate
will be filed as an exhibit to or incorporated by reference in the
Registration Statement. The provisions set forth in the Certificate of
Amendment will be adopted by the Board of Directors of Sears, and such
Certificate will be filed with the Department of State of the State of New
York prior to the issuance of any series of the Preferred Shares. The
following summaries of certain provisions of the Preferred Shares and the
Certificate of Amendment of the Certificate of Incorporation relating to
any particular series of Offered Preferred Shares do not purport to be
complete and are subject to, and qualified in their entirety by reference
to, all of the provisions of such Certificate of Amendment.
As set forth under ``Description of Depositary Shares'' below, Sears may,
at its option, elect to offer depositary shares (``Depositary Shares'')
evidenced by depositary receipts (``Depositary Receipts''), each
representing a fraction (to be specified in the Prospectus Supplement
relating to the particular series of Preferred Shares) of a share of such
series of the Preferred Shares issued and deposited with a depositary, in
lieu of offering full shares.
Sears is authorized by the Certificate of Incorporation to issue Preferred
Shares in one or more series with such voting rights, or without voting
rights, and with such designations, rights, preferences and limitations
thereof, as shall be established by the Board of Directors. Upon issuance,
the Preferred Shares will have preference over Common Shares as to
dividends and upon liquidation, dissolution and winding up
(``dissolution''). Subject to the terms of the Preferred Shares, any
remaining undesignated preferred shares may be issued by Sears in one or
more series, at any time or from time to time, with such designations,
rights, preferences and limitations as the Board of Directors shall
determine, including depositary arrangements similar to those relating to
the Depositary Shares, all without further action of the shareholders,
including holders of the Preferred Shares.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Preferred Shares for the following terms of the Offered
Preferred Shares: (i) the title of such Preferred Shares and the number of
shares offered; (ii) the price at which such Preferred Shares will be
issued; (iii) the dividend rate (or method of calculation), the dates on
which dividends shall be payable and the dates from which dividends shall
commence to accrue; (iv) voting rights, if different from those set forth
herein; (v) any redemption, liquidation or sinking fund provisions; (vi)
conversion rights or exchange features, if any; (vii) whether Sears has
elected to offer Depositary Shares as described below under ``Description
of Depositary Shares'', or any other book-entry provisions; (viii) whether
such series of Offered Preferred Shares ranks junior to (``Junior
Securities'') or on a parity with (``Parity Securities'') the 8.88%
Preferred Shares with respect to dividends or upon dissolution; (ix) the
terms of any warrants attached to the Offered Preferred Shares; and (x) any
additional dividend, redemption, liquidation, sinking fund and other
rights, preferences, privileges, limitations and restrictions. The rights
of holders of any series of Preferred Shares are subject to the rights of
the holders of the 8.88% Preferred Shares as described under ``Description
of 8.88% Preferred Shares'' and certain other restrictions described under
``Certain Restrictions,'' and may be subject to the rights of holders of
other series of Preferred Shares that may hereafter be issued. The
Prospectus Supplement relating to any series of Offered Preferred Shares
will describe the extent to which the holders of such series are subject to
the rights of the holders of any series of Preferred Shares issued after
the date hereof.
The holders of Preferred Shares will not have any preemptive rights. The
Preferred Shares will not contain any restriction on the repurchase or
redemption thereof by Sears while there is any arrearage in the payment of
dividends and such shares are otherwise redeemable, except that any such
redemption must be of all the outstanding Preferred Shares if any are
redeemed. The Preferred Shares will have a par value of $1.00 per share.
Dividends
Holders of Preferred Shares will be entitled to receive, when and as
declared by the Board of Directors of Sears out of assets of Sears legally
available for payment, cash or other dividends at such rates and on such
dates as specified in the Prospectus Supplement relating to a particular
series of Offered Preferred Shares. Dividends on any series of Preferred
Shares may be cumulative or non-cumulative, as provided in the applicable
Prospectus Supplement. Accrued but unpaid dividends will not bear interest.
If Sears Board of Directors fails to declare a dividend payable on a
dividend payment date on any series of Preferred Shares for which dividends
are non-cumulative, the holders of such series will have no right to
receive a dividend in respect of the dividend period ending on such
dividend payment date, and Sears will have no obligation to pay the
dividend accrued for such period, whether or not dividends on such series
are declared payable on any future dividend payment date.
Except as otherwise provided in the Prospectus Supplement relating to the
particular series of Offered Preferred Shares, so long as any of the
Preferred Shares are outstanding, no dividend (other than dividends or
distributions paid in Junior Securities which rank junior as to dividends,
or in options, warrants or rights to subscribe for or purchase such Junior
Securities, and other than as provided below) shall be declared or paid or
set aside for payment or other distribution declared or made upon Junior
Securities which rank junior as to dividends or Parity Securities which
rank on a parity as to dividends, nor shall any such Junior Securities or
Parity Securities be redeemed, purchased or otherwise acquired for any
consideration (or any monies be paid to or made available for a sinking
fund for the redemption of any shares of any such securities) by Sears
(except by conversion into or exchange for Junior Securities which rank
junior as to dividends) unless, in each case, the full cumulative dividends
on the outstanding Preferred Shares shall have been declared and paid or
set apart for payment for all quarterly dividend periods terminating on or
prior to the date of such payment or action, as the case may be.
Except as otherwise provided in the Prospectus Supplement relating to the
particular series of Offered Preferred Shares, when dividends are not paid
in full on the Preferred Shares and on any other Parity Securities which
rank on a parity as to dividends, all dividends declared on the Preferred
Shares and such Parity Securities will be declared ratably in accordance
with the respective dividends which would be payable on the Preferred
Shares and such Parity Securities if all accrued and unpaid dividends
thereon were paid in full.
Dissolution Preference
In the event of any dissolution of Sears, before any payment or
distribution of the assets of Sears (whether capital or surplus) shall be
made to or set apart for the holders of any Junior Securities which rank
junior as to dissolution, the holders of the Preferred Shares will be
entitled to receive for each share liquidating distributions in the amount
set forth in the Prospectus Supplement relating to the particular series of
Offered Preferred Shares, plus an amount equal to all dividends accrued and
unpaid thereon to the date of final distribution to such holders (subject
to the right of the holders of record of any Preferred Shares on a record
date for payment of dividends thereon to receive a dividend payable on the
date of final distribution); but such holders shall not be entitled to any
further payment. If, upon any dissolution of Sears, the assets of Sears, or
proceeds thereof, distributable among the holders of the Preferred Shares
and any Parity Securities which rank on a parity as to dissolution shall be
insufficient to pay in full the preferential amount aforesaid and such
dissolution payments on any such Parity Securities, then such assets, or
the proceeds thereof, shall be distributed among the holders of Preferred
Shares and any such Parity Securities ratably in accordance with the
respective amounts which would be payable on such Preferred Shares and any
such Parity Securities if all amounts payable thereon were paid in full. A
sale, lease, exchange or other disposition of all or substantially all of
the property and assets of Sears, or a consolidation or merger of Sears
with one or more corporations, shall not be deemed to be a dissolution.
Redemption
The Offered Preferred Shares will be redeemable, if at all, as set forth in
the Prospectus Supplement relating to such series of Offered Preferred
Shares. Dividends on any Preferred Shares called for redemption will cease
to accrue and all rights of the holders thereof will cease after redemption
or after Sears has set aside money for payment of the redemption price.
Sears may not redeem less than all the outstanding Preferred Shares unless
full cumulative dividends, if any, have been paid or declared and set apart
for payment on all outstanding Preferred Shares for all dividend periods
terminating on or prior to the date fixed for redemption.
If less than all the outstanding Preferred Shares are to be redeemed,
shares to be redeemed will be selected by Sears by lot or pro rata or by
any other method determined by Sears in its sole discretion to be
equitable.
Voting Rights
Holders of Preferred Shares will not have any voting rights except as set
forth below, as otherwise from time to time required by law or as set forth
in the Prospectus Supplement relating to the particular series of Offered
Preferred Shares.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Offered Preferred Shares, whenever dividends on the
Preferred Shares shall be in arrears in an amount equal to at least the
dividends payable for six quarterly dividend periods, the holders of each
series of Preferred Shares (voting as a class with the holders of all other
series of Parity Securities upon which like voting rights have been
conferred and are exercisable), will be entitled to vote for the election
of two directors on the terms set forth below until all past dividends
accrued on such series of Preferred Shares shall have been paid in full or
set aside for payment. Holders of the Preferred Shares and such Parity
Securities which are granted such voting rights will vote as a class, and
will have the right to vote cumulatively for the election of directors, in
accordance with Article 3.5 of the Certificate of Incorporation. In such
case, the holders of such Preferred Shares will have the exclusive right as
a class, as outlined above, to elect two directors at the next annual
meeting of shareholders. The directors shall be elected for terms expiring
at the next succeeding annual meeting of shareholders or until their
respective successors are elected and qualified, unless such terms are
sooner terminated. The term of any director so elected will terminate upon
full payment of all past accrued dividends or at such time as Sears sets
aside funds for the payment.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Offered Preferred Shares, so long as any Preferred
Shares remain outstanding, Sears shall not, without the affirmative vote or
consent of the holders of at least two-thirds of the Preferred Shares
outstanding at the time, voting in person or by proxy, either in writing or
at a meeting (voting as a class with all Parity Securities upon which like
voting rights have been conferred and are then exercisable): (i) authorize,
create or issue, or increase the authorized or issued amount of, any class
or series of shares ranking prior to the Offered Preferred Shares with
respect to payment of dividends or the distribution of assets on
dissolution; or (ii) amend, alter or repeal the provisions of Sears
Certificate of Incorporation, so as to materially and adversely affect any
right, preference, privilege or voting power of the Offered Preferred
Shares or of the holders thereof; provided, however, that any increase in
the amount of authorized Preferred Shares or the creation and issuance of
Parity Securities or Junior Securities shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting powers.
In addition, the creation of a class or series of shares entitled to vote
as a class together with the Offered Preferred Shares on the above matters
and having a voting power greater than one vote for each $100 of
liquidation preference (exclusive of accrued and unpaid dividends), shall
be deemed to adversely affect the voting power of the Offered Preferred
Shares.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Offered Preferred Shares, so long as any series of
Preferred Shares remains outstanding, Sears shall not, without the
affirmative vote or consent of the holders of at least a majority of the
shares of such series of Preferred Shares outstanding at the time, voting
in person or by proxy, either in writing or at a meeting (voting as a class
with all other Parity Securities upon which like voting rights have been
conferred and are then exercisable), effect the merger or consolidation of
Sears with or into any other corporation, if the plan of merger or
consolidation contains any provision which, if contained in an amendment to
the Certificate of Incorporation, would entitle the holders of shares of
such class or series to vote as a class thereon.
The foregoing voting provisions shall not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Preferred Shares (upon which such voting
rights have been conferred and are then exercisable) shall have been
redeemed or sufficient funds shall have been deposited in trust to effect
such redemption.
Transfer Agent, Registrar and Dividend Disbursing Agent
The transfer agent, registrar and dividend disbursing agent for each series
of Offered Preferred Shares will be set forth in the Prospectus Supplement
relating thereto.
Description of 8.88% Preferred Shares
The 8.88% Preferred Shares were sold in the form of 13,000,000 depositary
shares, each representing a one-fourth interest in one of the 3,250,000
8.88% Preferred Shares. The 8.88% Preferred Shares have a liquidation
preference of $100 per share.
The 8.88% Preferred Shares are not convertible into Common Shares (or any
other security) of Sears, and holders do not have any preemptive rights.
The 8.88% Preferred Shares do not contain any restriction on the repurchase
or redemption thereof by Sears while there is any arrearage in the payment
of dividends and such shares are otherwise redeemable, except that any such
redemption must be of all the outstanding 8.88% Preferred Shares if any are
redeemed. The 8.88% Preferred Shares have a par value of $1.00 per share.
Dividends
Holders of 8.88% Preferred Shares are entitled to receive, when and as
declared by the Board of Directors of Sears out of assets legally available
for payment, cash dividends, payable quarterly, at the annual rate of $8.88
per share, in equal quarterly payments on February 1, May 1, August 1 and
November 1 in each year. Dividends on the 8.88% Preferred Shares are
cumulative from the date of original issue, whether or not declared. Any
accrued but unpaid dividends will not bear interest.
So long as any of the 8.88% Preferred Shares are outstanding, no dividend
(other than dividends or distributions paid in Junior Securities which rank
junior with respect to dividends, or in options, warrants or rights to
subscribe for or purchase such Junior Securities and other than as provided
below) shall be declared or paid or set aside for payment or other
distribution declared or made upon any Junior Securities or Parity
Securities which rank junior or on a parity with respect to dividends, nor
shall any such Junior Securities or Parity Securities be redeemed,
purchased or otherwise acquired for any consideration (or any monies be
paid to or made available for a sinking fund for the redemption of any such
securities) by Sears (except by conversion into or exchange for Junior
Securities) unless, in each case, the full cumulative dividends on the
8.88% Preferred Shares shall have been declared and paid or set apart for
payment for all quarterly dividend periods terminating on or prior to the
date of such payment or action, as the case may be.
When dividends are not paid in full on the 8.88% Preferred Shares and on
any Parity Securities, all dividends declared on the 8.88% Preferred Shares
and any Parity Securities will be declared ratably in accordance with the
respective dividends which would be payable on the 8.88% Preferred Shares
and such Parity Securities if all accrued and unpaid dividends thereon were
paid in full.
Dissolution Preference
In the event of any dissolution of Sears, before any payment or
distribution of the assets of Sears (whether capital or surplus) shall be
made to or set apart for the holders of any Junior Securities ranking
junior with respect to dissolution, the holders of the 8.88% Preferred
Shares will be entitled to receive for each share $100 plus an amount equal
to all dividends accrued and unpaid thereon to the date of final
distribution to such holders (subject to the right of the holders of record
of any 8.88% Preferred Shares on a record date for payment of dividends
thereon to receive a dividend payable on the date of final distribution),
but such holders shall not be entitled to any further payment.
If, upon any dissolution of Sears, the assets of Sears, or proceeds
thereof, distributable among the holders of the 8.88% Preferred Shares and
any Parity Securities which rank on a parity with respect to dissolution
shall be insufficient to pay in full the preferential amount aforesaid and
such dissolution payments on any such Parity Securities, then such assets,
or the proceeds thereof, shall be distributed among the holders of 8.88%
Preferred Shares and any such Parity Securities ratably in accordance with
the respective amounts which would be payable on such 8.88% Preferred
Shares and any such Parity Securities if all amounts payable thereon were
paid in full. A sale, lease, exchange or other disposition of all or
substantially all of the property and assets of Sears, or a consolidation
or merger of Sears with or into one or more corporations, shall not be
deemed to be a dissolution.
Redemption
The 8.88% Preferred Shares may not be redeemed prior to November 9, 1996
except as described below. On or after November 9, 1996, Sears may, at its
option, redeem the 8.88% Preferred Shares, as a whole or in part, at any
time or from time to time at a redemption price of $100 per share, plus
accrued and unpaid dividends thereon to the date fixed for redemption.
Prior to November 9, 1996, Sears, at its option, may redeem all, but not
less than all, of the outstanding 8.88% Preferred Shares if the holders of
the 8.88% Preferred Shares shall be entitled to vote upon or consent to a
merger or consolidation of Sears under the circumstances as set forth below
under ``Voting Rights'' and all of the following conditions have been
satisfied: (i) Sears shall have requested the vote or consent of the
holders of the 8.88% Preferred Shares to the consummation of such merger or
consolidation, stating in such request that, failing the requisite
favorable vote or consent, Sears will have the option to redeem the 8.88%
Preferred Shares, (ii) Sears shall not have received the favorable vote or
consent requisite to the consummation of such merger or consolidation
within 60 days after making such request, and (iii) such merger or
consolidation shall be consummated on the date fixed for such redemption,
which date shall be no more than one year after such request is made. Any
such redemption shall be at the redemption price of $100 per share plus
accrued and unpaid dividends thereon to the date of redemption.
Dividends on any 8.88% Preferred Shares called for redemption will cease to
accrue and all rights of the holders thereof will cease after redemption or
after Sears has set aside money for payment of the redemption price.
Sears may not redeem less than all the outstanding 8.88% Preferred Shares
unless full cumulative dividends have been paid or declared and set apart
for payment on all outstanding 8.88% Preferred Shares for all quarterly
dividend periods terminating on or prior to the date fixed for redemption.
Voting Rights
Holders of 8.88% Preferred Shares have no voting rights except as set forth
below or as otherwise from time to time required by law.
Whenever dividends on the 8.88% Preferred Shares shall be in arrears in an
amount equal to at least the dividends payable for six quarterly dividend
periods, the holders of the 8.88% Preferred Shares (voting as a class with
all Parity Securities upon which like voting rights have been conferred and
are then exercisable), will be entitled to vote for the election of two
directors on the terms set forth below until, in the case of the 8.88%
Preferred Shares, all past dividends accrued on the 8.88% Preferred Shares
shall have been paid in full or set aside for payment. Holders of the 8.88%
Preferred Shares and all other series of Preferred Shares which are granted
such voting rights (which rank on a parity with the 8.88% Preferred Shares)
will vote as a class, and will have the right to vote cumulatively for the
election of directors, in accordance with Article 3.5 of the Certificate of
Incorporation. In such case, the holders of such Preferred Shares will have
the exclusive right as a class, as outlined above, to elect two directors
at the next annual meeting of shareholders. The directors shall be elected
for terms expiring at the next succeeding annual meeting of shareholders or
until their respective successors are elected and qualified, unless such
terms are sooner terminated. The term of any director so elected will
terminate upon full payment of all past accrued dividends or at such time
as Sears sets aside funds for the payment.
So long as any 8.88% Preferred Shares remain outstanding, Sears shall not,
without the affirmative vote or consent of the holders of at least
two-thirds of the 8.88% Preferred Shares outstanding at the time, voting in
person or by proxy, either in writing or at a meeting (voting as a class
with all Parity Securities upon which like voting rights have been
conferred and are then exercisable): (i) authorize, create or issue, or
increase the authorized or issued amount, of any class or series of shares
ranking prior to the 8.88% Preferred Shares with respect to payment of
dividends or the distribution of assets on dissolution; or (ii) amend,
alter or repeal the provisions of the Certificate of Incorporation, so as
to materially and adversely affect any right, preference, privilege or
voting power of the 8.88% Preferred Shares or of the holders thereof;
provided, however, that any increase in the amount of authorized Preferred
Shares or the creation and issuance of Parity Securities or Junior
Securities shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers. In addition, the creation
of a class or series of shares entitled to vote as a class together with
the 8.88% Preferred Shares on the above matters and having a voting power
greater than one vote for each $100 of liquidation preference (exclusive of
accrued and unpaid dividends), shall be deemed to adversely affect the
voting power of the 8.88% Preferred Shares.
So long as any 8.88% Preferred Shares remain outstanding, Sears shall not,
without the affirmative vote or consent of the holders of at least a
majority of the 8.88% Preferred Shares outstanding at the time, voting in
person or by proxy, either in writing or at a meeting (voting as a class
with all other Parity Securities upon which like voting rights have been
conferred and are then exercisable), effect the merger or consolidation of
Sears with or into any other corporation, if the plan of merger or
consolidation contains any provision which, if contained in an amendment to
the Certificate of Incorporation, would entitle the holders of shares of
such class or series to vote as a class thereon.
The foregoing voting provisions do not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding 8.88% Preferred Shares have been
redeemed or sufficient funds have been deposited in trust to effect such
redemption.
Certain Restrictions
There are no restrictions on repurchases or redemption of shares by Sears
which do not impair its capital, except for limitations under the terms of
outstanding preferred shares and except that the indentures relating to
certain of Sears long-term debt and an agreement pursuant to which Sears
has provided a credit facility in support of certain tax increment revenue
bonds issued by the Village of Hoffman Estates, Illinois, in connection
with the construction of the home office for Sears Merchandise Group
provide that Sears will not take certain actions, including the declaration
of cash dividends and the repurchase of shares, which would cause
unencumbered assets plus certain capitalized rentals to drop below 150% of
liabilities plus such capitalized rentals (as such terms are defined in the
indentures and the agreement). At December 31, 1994 and April 1, 1995, the
amount by which such unencumbered assets plus capitalized rentals exceeded
150% of such liabilities plus capitalized rentals, as computed under the
most restrictive of such indenture provisions and those of the credit
facility agreement referred to above, was $8.0 billion and $9.0 billion,
respectively. If the Allstate spin-off had occurred on April 1, 1995, such
amount would have been approximately $1.0 billion as of that date.
DESCRIPTION OF DEPOSITARY SHARES
The following descriptions of the terms of the Depositary Shares set forth
certain general terms and provisions of the Depositary Shares to which any
Prospectus Supplement may relate. The particular terms of the Depositary
Shares offered by any Prospectus Supplement (the ``Offered Depositary
Shares''), and the extent, if any, to which such general provisions may
apply to the Depositary Shares so offered, will be specified in the
Prospectus Supplement relating to such Offered Depositary Shares.
Sears may, at its option, elect to offer fractional interests in Preferred
Shares, rather than full Preferred Shares. In the event such option is
exercised, Sears will issue to the public Depositary Shares evidenced by
Depositary Receipts, each of which will represent a fraction (to be set
forth in the Prospectus Supplement relating to a particular series of
Preferred Shares) of a Preferred Share of a particular series as described
below.
The Preferred Shares of any series represented by Depositary Shares will be
deposited under a deposit agreement (the ``Deposit Agreement'') with a
depositary named in the Prospectus Supplement relating to the Offered
Depositary Shares, which will have its principal office in the United
States and a combined capital and surplus of at least $50,000,000 (the
``Depositary''). Subject to the terms of the Deposit Agreement, each
registered holder of a Depositary Share will be entitled, in proportion to
the applicable fraction of a Preferred Share represented by such Depositary
Share, to all the rights and preferences of the Preferred Shares
represented thereby (including dividend, voting, redemption and liquidation
rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Depositary Receipts will be distributed
to those persons purchasing the fractional interests in Preferred Shares in
accordance with the terms of the offering represented by the applicable
Prospectus Supplement. Copies of the forms of Deposit Agreement and
Depositary Receipt will be filed as exhibits to or incorporated by
reference in the Registration Statement. The following summaries of certain
provisions of the Depositary Shares, Depositary Receipts and Deposit
Agreement do not purport to be complete and are subject to, and qualified
in their entirety by reference to, all the provisions of the Depositary
Receipts and Depositary Agreement.
General
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of Sears, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to
all the rights pertaining to) the definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at Sears expense.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Shares to the record
holders of Depositary Receipts in proportion, insofar as possible, to the
numbers of Depositary Shares owned by such holders on the relevant record
date, which will be the same date as the record date fixed by Sears for the
Preferred Shares. The Depositary, however, will distribute only such amount
as can be distributed without attributing to any Depositary Share a
fraction of one cent, and any balance not so distributed will be added to
and treated as part of the next sum received by the Depositary for
distribution to record holders of Depositary Receipts.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary
Receipts entitled thereto, in proportion, as nearly as may be practicable,
to the numbers of Depositary Shares owned by such holders on the relevant
record date, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval
of Sears, adopt such method for such distribution as it deems appropriate,
including the sale of such property and distribution of the net proceeds
from such sale to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by Sears to holders of
Preferred Shares will be made available to holders of Depositary Shares.
The amount distributed in any of the foregoing cases will be reduced by any
amounts required to be withheld by Sears or the Depositary on account of
taxes or otherwise required pursuant to law, regulation or court process.
Redemption of Depositary Shares
If the series of Preferred Shares represented by the applicable series of
Depositary Shares is redeemable, such Depositary Shares will be redeemed
from the proceeds received by the Depositary resulting from any redemption,
in whole or in part, of Preferred Shares held by the Depositary. Whenever
Sears redeems any Preferred Shares held by the Depositary, the Depositary
will redeem as of the same redemption date the number of Depositary Shares
representing the Preferred Shares so redeemed. The Depositary will mail the
notice of redemption not less than 30 nor more than 60 days prior to the
date fixed for redemption of the Preferred Shares and the Depositary Shares
to the record holders of the Depositary Receipts. The redemption price per
Depositary Share will be specified in the applicable Prospectus Supplement
and will include accrued and unpaid dividends to the date fixed for
redemption. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may
be determined by Sears.
Notice of redemption having been given as described above, from and after
the date fixed for redemption, unless Sears shall have failed to redeem the
number of Preferred Shares called for redemption, the Depositary Shares so
called for redemption will no longer be deemed to be outstanding, and all
rights of the holders of the Depositary Shares will cease, except for the
right to receive the monies payable upon such redemption and any money or
other property to which the holders of such Depositary Shares were entitled
upon such redemption, upon surrender to the Depositary of the Depositary
Receipts evidencing such Depositary Shares.
Conversion or Exchange
With respect to a series of Preferred Shares that underly Depositary Shares
and is convertible or exchangeable into or for other Securities, a holder
of Depositary Receipts may participate in the conversion or exchange in the
manner specified in the applicable Certificate of Amendment of the
Certificate of Incorporation for holders of the underlying Preferred
Shares. If the Depositary Shares are to be converted or exchanged in part
only, a new Depositary Receipt or Depositary Receipts will be issued by the
Depositary for the Depositary Shares not to be converted or exchanged. No
fractional Common Shares or Preferred Shares will be issued upon conversion
or exchange, and, if such conversion or exchange would result in a
fractional share being issued, an amount will be paid in cash by Sears
equal to the value of the fractional interest.
Voting Rights
Upon receipt of notice of any meeting at which any holders of Preferred
Shares are entitled to vote or any solicitation of consents in respect of
any Preferred Shares, the Depositary will mail the information contained in
such notice of meeting or consent solicitation as directed by Sears, as the
case may be, to the record holders of the Depositary Receipts as of the
record date for such meeting. Each such record holder of Depositary
Receipts will be entitled to instruct the Depositary as to the exercise of
the voting rights or the delivery of consents pertaining to the amount of
the Preferred Shares represented by such record holder's Depositary Shares.
The Depositary will endeavor, insofar as practicable, to vote or deliver a
consent in accordance with such instructions. The Depositary will abstain
from voting or delivering any consents to the extent that it does not
receive specific instructions from the holders of Depositary Receipts.
Since each Preferred Share will be entitled to one vote on matters on which
the Preferred Shares are entitled to vote, each Depositary Share will, in
effect, be entitled to a fraction of a vote, as specified in the applicable
Prospectus Supplement, rather than one full vote, per Depositary Share.
Since holders of Preferred Shares are entitled to vote cumulatively in the
limited circumstances under which Preferred Shares are entitled to vote for
election of directors, each Depositary Share will, in effect, be entitled
to a fraction of a vote per Depositary Share as specified in the applicable
Prospectus Supplement, times the number of directors to be elected by the
Preferred Shares (voting as a class with all other series of preferred
shares ranking on a parity with the Preferred Shares as to dividends or
upon dissolution and upon which like voting rights have been conferred and
are then exercisable).
Withdrawal of Preferred Shares
Upon surrender of Depositary Receipts at the principal office of the
Depositary, upon payment of the Depositary's customary charges therefor,
and subject to the terms of the Deposit Agreement, the owner of the
Depositary Shares evidenced thereby will be entitled to delivery of the
number of whole Preferred Shares and all money and other property, if any,
represented by such Depositary Shares. Owners of Depositary Shares will be
entitled to receive whole Preferred Shares on the basis of one Preferred
Share for the number of Depositary Shares specified in the Prospectus
Supplement. Partial Preferred Shares will not be issued. If the Depositary
Receipts delivered by the holder evidence a number of Depositary Shares in
excess of the number of Depositary Shares representing the number of whole
Preferred Shares to be withdrawn, the Depositary will deliver to such
holder at the same time a new Depositary Receipt evidencing such excess
number of Depositary Shares. Holders of Preferred Shares thus withdrawn
will not thereafter be entitled to deposit such shares under the Deposit
Agreement or to receive Depositary Receipts evidencing Depositary Shares
therefor.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between Sears and the Depositary. However, any
amendment which materially and adversely alters the rights of the holders
of Depositary Shares will not be effective unless such amendment has been
approved by the holders of at least a majority of the Depositary Shares
then outstanding. No such amendment may impair the right, subject to the
terms of the Deposit Agreement, of any owner of any Depositary Shares to
surrender the Depositary Receipt evidencing such Depositary Shares with
instructions to the Depositary to deliver to the holder the Preferred
Shares and all money and other property, if any, represented thereby,
except in order to comply with mandatory provisions of applicable law. The
Deposit Agreement may be terminated by Sears or the Depositary only if (i)
all outstanding Depositary Shares have been redeemed, converted or
exchanged or (ii) there has been a final distribution in respect of the
Preferred Shares in connection with any dissolution of Sears and such
distribution has been made to all the holders of Depositary Shares.
Charges of Depositary
Sears will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Sears
will pay charges of the Depositary in connection with the initial deposit
of the Preferred Shares and the initial issuance of the Depositary Shares
and any redemption of the Preferred Shares. Holders of Depositary Shares
will pay other transfer and other taxes and governmental charges and
certain other charges as are provided in the Deposit Agreement to be for
their accounts.
Miscellaneous
The Depositary will forward all reports and communications from Sears which
are delivered to the Depositary and which Sears is required to furnish to
the holders of the Preferred Shares. In addition, the Depositary will make
available for inspection by holders of Depositary Receipts at the principal
office of the Depositary, and at such other places as it may from time to
time deem advisable, any reports and communications received from Sears
which are received by the Depositary as the holder of Preferred Shares.
Neither the Depositary nor Sears assumes any obligation or will be subject
to any liability under the Deposit Agreement to holders of Depositary
Receipts other than for its negligence or willful misconduct. Neither the
Depositary nor Sears will be liable if it is prevented or delayed by law or
any circumstance beyond its control in performing its obligations under the
Deposit Agreement. The obligations of Sears and the Depositary under the
Deposit Agreement will be limited to performance in good faith of their
duties thereunder, and they will not be obligated to prosecute or defend
any legal proceeding in respect of any Depositary Shares or Preferred
Shares unless satisfactory indemnity is furnished. Sears and the Depositary
may rely on written advice of counsel or accountants, on information
provided by holders of Depositary Shares or other persons believed in good
faith to be competent to give such information and on documents believed to
be genuine and to have been signed or presented by the proper party or
parties.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to Sears notice of its
election to do so, and Sears may at any time remove the Depositary, any
such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its
principal office in the United States of America and having a combined
capital and surplus of at least $50,000,000.
Taxation
Owners of Depositary Shares will be treated for Federal income tax purposes
as if they were owners of the Preferred Shares represented by such
Depositary Shares. Accordingly, such owners will be entitled to take into
account for Federal income tax purposes income and deductions to which they
would be entitled if they were holders of such Preferred Shares. In
addition, (i) no gain or loss will be recognized for Federal income tax
purposes upon the withdrawal of Preferred Shares in exchange for Depositary
Shares, (ii) the tax basis of each Preferred Share to an exchanging owner
of Depositary Shares will, upon such exchange, be the same as the aggregate
tax basis of the Depositary Shares exchanged therefor, and (iii) the
holding period for Preferred Shares in the hands of an exchanging owner of
Depositary Shares who held such Depositary Shares as a capital asset at the
time of the exchange thereof for Preferred Shares will include the period
during which such person owned such Depositary Shares.
DESCRIPTION OF EQUITY WARRANTS
The following descriptions of the terms of the Equity Warrants set forth
certain general terms and provisions of the Equity Warrants to which any
Prospectus Supplement may relate. The particular terms of the Equity
Warrants offered by any Prospectus Supplement (the ``Offered Equity
Warrants''), and the extent, if any, to which such general provisions may
apply to the Equity Warrants so offered, will be described in the
Prospectus Supplement relating to such Offered Equity Warrants.
Sears may issue Equity Warrants to purchase or receive Common Shares,
Preferred Shares or Depositary Shares. Equity Warrants may be issued
independently or together with Common Shares, Preferred Shares or
Depositary Shares offered by any Prospectus Supplement (the ``Offered
Equity Securities''), and may be attached thereto or separate therefrom.
The Offered Equity Warrants are to be issued under a warrant agreement (an
``Equity Warrant Agreement'') to be entered into between Sears and a
warrant agent (the ``Warrant Agent'') named in the applicable Prospectus
Supplement relating to the Offered Equity Warrants, and may be issued in
one or more series. Copies of the forms of Equity Warrant Agreement and
Equity Warrant Certificate relating to any series of Offered Equity
Warrants will be filed as exhibits to or incorporated by reference in the
Registration Statement. The following summaries of certain provisions of
the Equity Warrants, Equity Warrant Agreements and Equity Warrant
Certificates do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Equity Warrant Agreements and the Equity Warrant Certificates.
General
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Equity Warrants for the following terms of the Offered
Equity Warrants: (i) the price at which the Offered Equity Warrants will be
issued; (ii) the aggregate number and type of Equity Securities purchasable
upon exercise of such Equity Warrants, and, in the case of Equity Warrants
for Preferred Shares or Depositary Shares, the designation, aggregate
number and terms of the series of Preferred Shares purchasable upon
exercise of such Equity Warrants or underlying the Depositary Shares
purchasable upon exercise of such Equity Warrants; (iii) if applicable, the
designation and terms of the Equity Securities with which the Offered
Equity Warrants are issued and the number of Offered Equity Warrants issued
with each of such Equity Securities; (iv) if applicable, the date on and
after which the Offered Equity Warrants and the related Equity Securities
will be separately transferable; (v) the number of Common Shares, Preferred
Shares or Depositary Shares purchasable upon exercise of each such Equity
Warrant and the price at which such number of Equity Securities may be
purchased upon such exercise; (vi) the date on which the right to exercise
the Offered Equity Warrants shall commence and the date (the ``Expiration
Date'') on which such right shall expire; (vii) any applicable United
States federal income tax consequences; and (viii) any other material terms
of such Equity Warrants.
Equity Warrant Certificates may be exchanged for new Equity Warrant
Certificates of different denominations, may be presented for registration
of transfer, and may be exercised, at the corporate trust office of the
Warrant Agent or any other office indicated in the Prospectus Supplement
relating to the Offered Equity Warrants. Prior to the exercise of any
Equity Warrant, holders of such Equity Warrants will not have any of the
rights of holders of the Equity Securities purchasable upon such exercise,
including the right to receive payments of dividends, if any, on the Equity
Securities purchasable upon such exercise or to exercise any applicable
right to vote.
The Warrant Agent will act solely as an agent of Sears in connection with
the Equity Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Equity Warrant
Certificates or beneficial owners of Equity Warrants.
Exercise
Each Offered Equity Warrant will entitle the holder thereof to purchase
such number of Equity Securities at such exercise price as shall in each
case be set forth in, or determinable as set forth in, the applicable
Prospectus Supplement. After the close of business on the Expiration Date
(or such later date to which such Expiration Date may be extended by
Sears), unexercised Equity Warrants will become void.
Subject to any restrictions and additional requirements that may be set
forth in the Prospectus Supplement, an Equity Warrant may be exercised by
delivery to the Warrant Agent of the Equity Warrant Certificate evidencing
such Equity Warrant properly completed and duly executed, together with
payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Equity Securities purchasable upon such exercise.
Adjustments in Certain Events
The Prospectus Supplement relating to any series of Offered Equity Warrants
will set forth any adjustments in the exercise price of, or number of
Equity Securities covered by, an Equity Warrant that may be required in
certain events.
PLAN OF DISTRIBUTION
Sears may sell Securities to or through underwriters, and also may sell
Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Prospectus Supplement
will describe the method of distribution of the Offered Securities.
In connection with the sale of Securities, underwriters may receive
compensation from Sears or from purchasers of Securities for whom they may
act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers
for whom they may act as agent. Underwriters, dealers and agents that
participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions received by them and any
profit on the resale of Securities by them may be deemed to be underwriting
discounts and commissions, under the Act. Any such underwriter or agent
will be identified, and any such compensation will be described, in the
Prospectus Supplement.
Under agreements which may be entered into by Sears, underwriters, dealers
and agents who participate in the distribution of Securities may be
entitled to indemnification by Sears against certain liabilities, including
liabilities under the Act.
LEGAL OPINION
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of Offered Securities, the legality of the Securities
will be passed upon for Sears by Robert J. Pence, Senior Counsel, Corporate
Law Department, of Sears. At July 31, 1995, Mr. Pence owned 413 Sears
common shares, including shares credited to his account in The Savings and
Profit Sharing Fund of Sears Employees as of June 30, 1995, and had options
granted under Sears employees stock plans relating to 3,920 Sears common
shares.
EXPERTS
The financial statements incorporated by reference in this Prospectus and
the Summary Financial Information included in this Prospectus, have been
audited by Deloitte & Touche LLP, independent certified public accountants,
as stated in their report on the financial statements incorporated by
reference herein (which report expresses an unqualified opinion and
includes an explanatory paragraph related to the Company changing its
method of accounting for postretirement benefits in 1992) and their report
on the Summary Financial Information included in Exhibit 99 to the
Registration Statement. Such financial statements and Summary Financial
Information have been incorporated by reference and included herein,
respectively, in reliance upon the reports of such firm and given upon
their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information which is
incorporated herein by reference, Deloitte & Touche LLP have applied
limited procedures in accordance with professional standards for a review
of such information. However, as stated in their report included in Sears
Quarterly Report on Form 10-Q for the quarter ended April 1, 1995 and
incorporated by reference herein, they did not audit and they did not
express an opinion on that interim financial information. Accordingly, the
degree of reliance on their report on such information should be restricted
in light of the limited nature of the review procedures applied. Deloitte &
Touche LLP are not subject to the liability provisions of Section 11 of the
Securities Act of 1933 for their report on the unaudited interim financial
information because that report is not a ``report'' or a ``part'' of the
registration statement prepared or certified by an accountant within the
meaning of Sections 7 and 11 of the Act.
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
S.E.C. Registration Fee $1,200,000
Rating Agency Fee 420,000*
State Qualification Expense (including legal fees) 25,000*
Trustee's Fees 100,000*
Printing and Engraving 60,000*
Legal Fees 100,000*
Auditors' Fees 50,000*
Miscellaneous 45,000*
Total $2,000,000*
*Estimated.
Item 15. Indemnification of Officers and Directors.
Article V of the By-Laws of Sears, relating to indemnification of directors
and officers, is incorporated herein by reference to Exhibit 3.(ii) to the
registrant's Annual Report on Form 10-K for the fiscal year ended December
31, 1994 (File No. 1-416). Article 7 of the Restated Certificate of
Incorporation of Sears, relating to limitation of personal liability of a
director to the corporation or its shareholders for damages for violation
of the director's duty as a director, is incorporated herein by reference
to Exhibit 3.(i) to the registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 1-416).
Sections 721 to 725 of the New York Business Corporation Law authorize
indemnification of directors and officers of Sears for certain liabilities
and expenses. Section 726 of said Law authorizes the purchase of
indemnification insurance. Section 402(b) of said Law authorizes the
limitation, in certain circumstances, of personal liability of directors to
the corporation or its shareholders for damages for breach of duty in such
capacity.
The form of Underwriting Agreement and the form of Distribution Agreement,
filed as Exhibits 1(a) and 1(b) hereto, respectively, and incorporated
herein by reference, contain certain provisions relating to
indemnification.
Sears has in effect insurance policies in the amount of $100 million
covering all of its directors and officers in certain instances where by
law they may not be indemnified by Sears.
Item 16. Exhibits.
*1(a) Form of Underwriting Agreement.
*1(b) Form of Distribution Agreement.
3(a) Restated Certificate of Incorporation, as amended to July 26,
1993. Incorporated by reference to Exhibit 3.(i) to Sears Annual
Report on Form 10-K for the fiscal year ended December 31, 1994
(File No. 1-416).
3(b) By-Laws as amended to February 7, 1995. Incorporated by reference
to Exhibit 3.(ii) to Sears Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 (File No. 1-416).
*4 Form of Indenture for the Debt Securities.
*5 Opinion of Robert J. Pence.
12(a) Computation of Ratio of Income to Fixed Charges for Sears,
Roebuck and Co. and consolidated subsidiaries for each of the
five years ended December 31, 1994 and the three- and twelve
month periods ended April 1, 1995. Incorporated by reference to
Exhibit 12.(a) to Sears Quarterly Report on Form 10-Q for the
quarterly period ended April 1, 1995 (File No. 1-416).
12(b) Computation of Ratio of Income to Combined Fixed Charges and
Preferred Share Dividends for Sears, Roebuck and Co. and
consolidated subsidiaries for each of the five years ended
December 31, 1995 and the three- and twelve-month periods ended
April 1, 1995. Incorporated by reference to Exhibit 12.(b) to
Sears Quarterly Report on Form 10-Q for the quarterly period
ended April 1, 1995 (File No. 1-416).
15 Acknowledgement of awareness from Deloitte & Touche LLP
concerning unaudited interim financial information. Incorporated
by reference to Exhibit 15 to Sears Quarterly Report on Form 10-Q
for the quarterly period ended April 1, 1995 (File No. 1-416).
*23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Robert J. Pence (included in Exhibit 5).
*24 Power of attorney of certain officers and directors.
*25 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939, as amended, of The Bank of New York
with respect to Debt Securities.
28 Information from reports furnished to state insurance regulatory
authorities (Schedule P of the Annual Statements, including
information formerly included in Schedule O) (incorporated by
reference to Exhibit 28 to The Allstate Corporation's Annual
Report on Form 10-K for the year ended December 31, 1994 (File
No. 1-11840).
*99 Report of Independent Certified Public Accountants.
* Filed herewith
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the ``Calculation of
Registration Fee'' table in the effective registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in this registration
statement above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted
against the registrant by such director, officer or controlling person in
connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this amendment
to the registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on the 4th day of August, 1995.
SEARS, ROEBUCK AND CO.
By /s/ Alice M. Peterson
Alice M. Peterson
Vice President and
Treasurer
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following
persons in the capacities and on the date indicated.
Signature Title Date
EDWARD A. BRENNAN* Director, Chairman of the
Board of Directors, President
and Chief Executive Officer
(Principal Executive Officer)
JAMES M. DENNY* Vice Chairman and Acting
Chief Financial Officer
(Principal Financial Officer)
JAMES A. BLANDA* Vice President and Controller
(Principal Accounting Officer)
HALL ADAMS, JR.* Director
[RIGHT BRACE]
WARREN L. BATTS* Director August 4th, 1995
JAMES W. COZAD* Director
WILLIAM E. LAMOTHE* Director
ARTHUR C. MARTINEZ* Director
MICHAEL A. MILES* Director
SYBIL C. MOBLEY* Director
NANCY C. REYNOLDS* Director
CLARENCE B. ROGERS, JR.* Director
DONALD H. RUMSFELD* Director
*By /s/ ALICE M. PETERSON Individually and as attorney-in-fact
Alice M. Peterson
Registration No. 33-55825
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
to
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
SEARS, ROEBUCK AND CO.
EXHIBIT INDEX
Exhibit Description
*1(a) Form of Underwriting Agreement.
*1(b) Form of Distribution Agreement.
3(a) Restated Certificate of Incorporation, as amended to July
26, 1993. Incorporated by reference to Exhibit 3.(i) to
Sears Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (File No. 1-416).
3(b) By-Laws as amended to February 7, 1995. Incorporated by
reference to Exhibit 3.(ii) to Sears Annual Report on Form
10-K for the fiscal year ended December 31, 1994 (File No.
1-416).
*4 Form of Indenture for the Debt Securities.
*5 Opinion of Robert J. Pence.
12(a) Computation of Ratio of Income to Fixed Charges for Sears,
Roebuck and Co. and consolidated subsidiaries for each of
the five years ended December 31, 1994 and the three- and
twelve-month periods ended April 1, 1995. Incorporated by
reference to Exhibit 12.(a) to Sears Quarterly Report on
Form 10-Q for the quarterly period ended April 1, 1995 (File
No. 1-416).
12(b) Computation of Ratio of Income to Combined Fixed Charges and
Preferred Share Dividends for Sears, Roebuck and Co. and
consolidated subsidiaries for each of the five years ended
December 31, 1995 and the three- and twelve-month periods
ended April 1, 1995. Incorporated by reference to Exhibit
12.(b) to Sears Quarterly Report on Form 10-Q for the
quarterly period ended April 1, 1995 (File No. 1-416).
15 Acknowledgement of awareness from Deloitte & Touche LLP
concerning unaudited interim financial information.
Incorporated by reference to Exhibit 15 to Sears Quarterly
Report on Form 10-Q for the quarterly period ended April 1,
1995 (File No. 1-416).
*23(a) Consent of Deloitte & Touche LLP.
23(b) Consent of Robert J. Pence (included in Exhibit 5).
*24 Power of attorney of certain officers and directors.
*25 Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939, as amended, of The Bank of
New York with respect to Debt Securities.
28 Information from reports furnished to state insurance
regulatory authorities (Schedule P of the Annual Statements,
including information formerly included in Schedule O)
(incorporated by reference to Exhibit 28 to The Allstate
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994 (File No. 1-11840).
*99 Report of Independent Certified Public Accountants.
* Filed herewith
<PAGE>
EXHIBIT 4
SEARS, ROEBUCK AND CO.
AND
THE BANK OF NEW YORK,
Trustee
Indenture
Dated as of ,
SEARS, ROEBUCK AND CO.
INDENTURE
dated as of ,
TABLE OF CONTENTS*
*This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
PAGE
PARTIES 1
RECITALS 1
ARTICLE I
DEFINITIONS OF CERTAIN TERMS
SECTION 1.1. Definitions I-1
Affiliate I-1
Assets I-1
Attributable Debt I-1
Authenticating Agent I-1
Board I-1
Business Day I-1
Certified Resolution I-2
Commission I-2
Company I-2
Consolidated Net Tangible Assets I-2
Currency I-2
Defaulted Interest I-2
Depository I-2
Dollar I-2
ECU I-2
Eligible Obligations I-3
European Communities I-3
Foreign Currency I-3
Funded Debt I-3
Global Security I-3
Holder I-3
Indenture I-3
Interest I-3
Interest Payment Date I-4
Investments I-4
Liabilities I-4
Market Exchange Rate I-4
Maturity I-4
Officers' Certificate I-4
Opinion of Counsel I-4
Original Issue Discount Security I-4
Outstanding I-5
Person I-5
Principal Property I-5
Redemption Date I-5
Redemption Price I-5
Regular Record Date I-5
Responsible Officer I-6
Sale and Lease-Back Transaction I-6
Securities I-6
Security Register I-6
Special Record Date I-6
Stated Maturity I-6
Subordinated Debt I-6
Subsidiary; Voting Stock I-6
Trustee I-7
U.S. Government Obligations I-7
SECTION 1.2. Trust Indenture Act definitions controlling I-7
ARTICLE II
THE SECURITIES
SECTION 2.1. Amount Unlimited; Issuable in Series; Forms
Generally; Form of Trustee's Certificate of
Authentication II-1
SECTION 2.2. Denominations II-3
SECTION 2.3. Execution, Authentication, Delivery and Dating II-3
SECTION 2.4. Temporary Securities II-4
SECTION 2.5. Registration, Registration of Transfer and
Exchange II-4
SECTION 2.6. Mutilated, Destroyed, Lost and Stolen
Securities II-5
SECTION 2.7. Payment of Interest; Interest Rights Preserved II-6
SECTION 2.8. Persons Deemed Owners II-7
SECTION 2.9. Cancellation II-7
SECTION 2.10. Securities Issuable as a Global Security II-7
SECTION 2.11. Currency of Payments in Respect of Securities II-8
SECTION 2.12. Availability of Currency of Payment in Respect
of Securities II-8
ARTICLE III
COVENANTS OF THE COMPANY
SECTION 3.1. Payment of principal and interest III-1
SECTION 3.2. Maintenance of office or agency for notices
and demands III-1
SECTION 3.3. Maintenance of properties III-1
SECTION 3.4. Insurance matters III-1
SECTION 3.5. Limitation on Liens III-1
SECTION 3.6. Limitation on Sale and Lease-Back Transactions III-2
SECTION 3.7. Limitations on Transfers of Principal Property III-3
SECTION 3.8. File certain reports and information with the
Trustee and the Securities and Exchange
Commission III-3
Transmit to Holders summaries of certain
documents filed with the Trustee III-3
Furnish list of Holders to the Trustee III-4
SECTION 3.9. File statement by officers annually with
the Trustee III-4
SECTION 3.10. Duties of paying agent III-4
ARTICLE IV
REDEMPTION OF SECURITIES
SECTION 4.1. Applicability of Article IV-1
SECTION 4.2. Election to Redeem; Notice to Trustee IV-1
SECTION 4.3. Selection by Trustee of Securities to Be
Redeemed IV-1
SECTION 4.4. Notice of Redemption IV-1
SECTION 4.5. Deposit of Redemption Price IV-2
SECTION 4.6. Securities Payable on Redemption Date IV-2
SECTION 4.7. Securities Redeemed in Part IV-2
ARTICLE V
SINKING FUNDS
SECTION 5.1. Applicability of Article V-1
SECTION 5.2. Satisfaction of Sinking Fund Payments with
Securities V-1
SECTION 5.3. Redemption of Securities for Sinking Fund V-1
ARTICLE VI
REMEDIES UPON DEFAULT
SECTION 6.1. Defaults defined-acceleration of maturity upon
default-waiver of default VI-1
SECTION 6.2. Covenant of Company to pay to Trustee whole
amount due on default in payment of principal
or interest-Trustee may recover judgment for
whole amount due-application of moneys
received by the Trustee VI-2
SECTION 6.3. Trustee may enforce rights of action without
possession of Securities VI-4
SECTION 6.4. Delays or omissions not to impair any rights
or powers accruing upon default VI-4
SECTION 6.5. In event of default Trustee may protect and
enforce its rights by appropriate proceedings-
holders of a majority in principal amount of
Securities of a particular series may waive
default VI-4
SECTION 6.6. Holders of a majority in principal amount of
Securities of a particular series may direct
exercise of remedies VI-4
SECTION 6.7. Limitation on suits by Holders VI-5
SECTION 6.8. No Securities owned or held by or for the
account of the Company to be deemed
outstanding for purpose of payment or
distribution VI-5
SECTION 6.9. Company and Trustee restored to former
position on discontinuance or abandonment
of proceedings VI-6
ARTICLE VII
CONCERNING THE HOLDERS
SECTION 7.1. Evidence of action by Holders VII-1
SECTION 7.2. Proof of execution of instruments and holding
of Securities VII-1
SECTION 7.3. Who may be deemed owners of Securities VII-1
SECTION 7.4. Securities owned by Company or its Affiliates
disregarded for certain purposes VII-2
SECTION 7.5. Action by Holders binds future Holders VII-2
ARTICLE VIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
SECTION 8.1. No recourse against incorporators or others VIII-1
ARTICLE IX
MERGER, CONSOLIDATION OR SALE
SECTION 9.1. Merger, consolidation, sale or conveyance of
property not prohibited except under certain
conditions-execution of supplemental indenture IX-1
SECTION 9.2. Rights and duties of successor corporation IX-1
Issuance of Securities by successor corporation IX-1
SECTION 9.3. Covenant to secure Securities IX-1
SECTION 9.4. Opinion of Counsel to Trustee IX-2
ARTICLE X
CONCERNING THE TRUSTEE
SECTION 10.1. Acceptance of Trust X-1
Trustee not relieved from liability for
negligence or misconduct X-1
Trustee not responsible for validity or
execution of Indenture or of Securities or
for recitals in Indenture or Securities X-1
Trustee may rely upon documents believed
genuine-may consult with counsel-may accept
officers' certificates-may require
indemnity-not to be liable for action taken
in good faith X-1
Prior to default and after curing of defaults
Trustee not bound to investigate unless
requested by Holders of majority in principal
amount of Securities of a series-may require
indemnification X-2
Trustee may execute trusts or powers directly
or by attorneys X-2
SECTION 10.2. Trustee to be entitled to compensation-Trustee
not to be accountable for application of
proceeds-moneys held by Trustee to be trust
funds X-2
SECTION 10.3. Trustee to give Holders notice of default X-3
SECTION 10.4. Trustee acquiring conflicting interest must
eliminate it or resign; Definition of
conflicting interest; Definition of certain
terms X-3
Calculation of percentages of securities X-7
SECTION 10.5. Eligibility of Trustee X-7
SECTION 10.6. Resignation or removal of Trustee X-8
SECTION 10.7. Acceptance by successor Trustee X-9
SECTION 10.8. Successor to Trustee by merger or consolidation X-9
SECTION 10.9. Limitations on right of Trustee as a creditor
to obtain payment of certain claims X-10
SECTION 10.10. Trustee to make annual report to Holders X-13
Trustee to make other reports to Holders X-13
Holders to whom reports to be transmitted X-13
SECTION 10.11. Preservation of information by Trustee X-14
Trustee to give certain information to
Holders upon application X-14
SECTION 10.12. Trustee or an Authenticating Agent may hold
Securities and otherwise deal with Company X-15
SECTION 10.13. Trustee may comply with any rule, regulation
or order of the Securities and Exchange
Commission X-15
SECTION 10.14. Authenticating Agent X-15
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1. Purposes for which supplemental indentures
may be entered into without consent of
Holders XI-1
SECTION 11.2. Modification of Indenture with consent of
Holders of a majority in principal amount of
Securities of any series XI-1
SECTION 11.3. Effect of supplemental indentures XI-2
SECTION 11.4. Securities may bear notation of changes XI-2
SECTION 11.5. Trustee may rely upon opinion of counsel XI-3
SECTION 11.6. Instruments of further assurance XI-3
ARTICLE XII
MEETINGS OF HOLDERS
SECTION 12.1. Purposes for which meetings may be called XII-1
SECTION 12.2. Manner of calling meetings XII-1
SECTION 12.3. Call of meetings by Company or Holders XII-1
SECTION 12.4. Who may attend and vote at meetings XII-1
SECTION 12.5. Regulations may be made by Trustee-conduct of
the meeting-voting rights-adjournment XII-2
SECTION 12.6. Manner of voting at meetings and record to be
kept XII-2
SECTION 12.7. Exercise of rights of Trustee or Holders may
not be hindered or delayed by call of
meeting of Holders XII-3
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
OR CERTAIN OBLIGATIONS
SECTION 13.1. Satisfaction and discharge of Indenture XIII-1
SECTION 13.2. Deposits for payment or redemption of
Securities to be held in trust XIII-1
SECTION 13.3. Repayment of moneys held by Trustee;
Repayment of moneys held by paying agent XIII-2
SECTION 13.4. Defeasance of Securities of any series XIII-2
SECTION 13.5. Application of Trust Money XIII-3
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.1. Rights under Indenture limited to the
parties, and Holders of Securities XIV-1
SECTION 14.2. Certificate of independent accountants
conclusive XIV-1
SECTION 14.3. Remaining provisions not affected by
invalidity of any other provisions-required
provisions of Trust Indenture Act of 1939,
as amended, to control XIV-1
SECTION 14.4. Company released from Indenture requirements
if entitled to have Indenture cancelled XIV-1
SECTION 14.5. Date of execution XIV-1
SECTION 14.6. Officers' certificates and Opinions of Counsel
to be furnished Trustee XIV-1
SECTION 14.7. Payments and deposits due other than on a
business day XIV-2
SECTION 14.8. Presentation of notices and demands XIV-2
SECTION 14.9. Successors and assigns bound by Indenture XIV-2
SECTION 14.10. Descriptive headings for convenience only XIV-2
SECTION 14.11. Indenture may be executed in counterparts XIV-2
SECTION 14.12. Controlling law XIV-2
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
SEARS, ROEBUCK AND CO.
Reconciliation and Tie between Indenture
dated as of
and
Trust Indenture Act of 1939, as amended
Trust Indenture Act Section Indenture Section
310(a)(1) 10.5
(a)(2) 10.5
(a)(3) Not applicable
(a)(4) Not applicable
(a)(5) 10.5
(b) 10.4, 10.5
(c) Not applicable
311(a) 10.9(a), (c)
(b) 10.9(b)
(c) Not applicable
312(a) 3.8(d), 10.11
(b) 10.11
(c) 10.11
313(a) 10.10(a)
(b)(1) Not applicable
(b)(2) 10.10(b)
(c) 10.10(c)
(d) 10.10(c)
314(a)(1) 3.8(a)
(a)(2) 3.8(b)
(a)(3) 3.8(c)
(a)(4) 3.9
(b) Not applicable
(c) 14.6
(d) Not applicable
(e) 14.6
(f) Not required
315(a)(1) 10.1(a), (b)
(a)(2) 10.1(a), (b), (d)
(b) 10.3
(c) 10.1(a)
(d) 10.1(a), (b)
(e) 6.7
316(a)(1A) 6.6
(a)(1B) 6.5
(a)(2) Not required
(b) 6.7
(c) 7.1
317(a)(1) 6.2
(a)(2) 6.2
(b) 3.10
318(a) 14.3
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
INDENTURE, dated as of the day of , , between SEARS,
ROEBUCK AND CO. (hereinafter called the ``Company''), a corporation
organized and existing under the laws of the State of New York, and THE
BANK OF NEW YORK, (hereinafter called the ``Trustee''), a banking
corporation organized and existing under the laws of the State of New York
as Trustee:
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
``Securities''), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Holders of the Securities or of series
thereof, as follows:
ARTICLE I
DEFINITIONS OF CERTAIN TERMS
SECTION 1.1. Unless the context otherwise requires, the terms defined in
this Article I shall for all purposes of this Indenture and of any
indenture supplemental hereto have the meaning herein specified, the
following definitions to be equally applicable to both the singular and
plural forms of any of the terms herein defined:
Affiliate
An ``Affiliate'' of a specified Person shall mean another Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such first Person.
Assets
The term ``Assets'' shall mean the total amount of assets (less reserves
properly deductible from such assets) other than good will, trade names,
trademarks, patents, and other like intangibles, which under good
accounting practice would appear on a consolidated balance sheet of the
Company and its Subsidiaries; provided, however, that inventories shall be
included in Assets in an amount equal to that which would appear on such
balance sheet if the first-in, first-out method of inventory accounting
were used in determining the amount of such inventories.
Attributable Debt
The term ``Attributable Debt'' shall mean, in respect of any Sale and
Lease-Back Transaction, as of the time of the determination, the lesser of
(i) the sale price of the Principal Property so leased multiplied by a
fraction the numerator of which is the remaining portion of the base term
of the lease included in such transaction and the denominator of which is
the base term of such lease, and (ii) the total obligation (discounted to
present value at the highest rate of interest specified by the terms of any
series of Securities then outstanding compounded semiannually) of the
lessee for rental payments (other than percentage rents based on sales and
amounts required to be paid on account of property taxes as well as
maintenance, repairs, insurance, water rates and other items which do not
constitute payments for property rights) during the remaining portion of
the base term of the lease included in such transaction.
Authenticating Agent
The term ``Authenticating Agent'' shall mean any Authenticating Agent
appointed by the Trustee pursuant to Section 10.14.
Board
The term ``Board'' or ``Board of Directors'' shall mean the Board of
Directors of the Company or the Executive Committee of such Board.
Business Day
The term ``Business Day'' shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a legal holiday for banking institutions
in any of the City of Chicago, The City of New York or the city in which
the principal corporate trust office of the Trustee is located.
Certified Resolution
The term ``Certified Resolution'' shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification.
Commission
The term ``Commission'' shall mean the Securities and Exchange Commission.
Company
The term ``Company'' shall mean Sears, Roebuck and Co. and, subject to the
provisions of Article IX, shall also include its successors and assigns.
Consolidated Net Tangible Assets
The term ``Consolidated Net Tangible Assets'' shall mean the sum of (a) the
difference between (i) the total amount of Assets on a consolidated balance
sheet of the Company and its Subsidiaries as of the end of the most recent
fiscal quarter for which such a consolidated balance sheet is available,
prepared in accordance with good accounting practice and (ii) the total
amount of Liabilities on a consolidated balance sheet of the Company and
its Subsidiaries as of the end of the most recent fiscal quarter for which
such a consolidated balance sheet is available, prepared in accordance with
good accounting practice, and (b) the total Funded Debt on a consolidated
balance sheet of the Company and its Subsidiaries prepared in accordance
with good accounting practice.
Currency
The term ``Currency'' shall mean Dollars or Foreign Currency.
Defaulted Interest
The term ``Defaulted Interest'' shall have the meaning specified in Section
2.7.
Depository
The term ``Depository'' shall mean, with respect to Securities of any
series for which the Company shall determine that such Securities will be
issued in whole or in part as one or more Global Securities, The Depository
Trust Company, New York, New York, another clearing agency or any successor
registered under the Securities Exchange Act of 1934, as amended, or other
applicable statute or regulation, which, in each case, shall be designated
by the Company pursuant to either Section 2.1 or 2.10.
Dollar
The term ``Dollar'' shall mean the currency issued by the government of the
United States.
ECU
The term ``ECU'' shall mean the European Currency Unit as defined and
revised from time to time by the Council of the European Communities.
Eligible Obligations
The term ``Eligible Obligations'' shall mean obligations as a result of the
deposit of which (along with the simultaneous deposit, if any, of money or
U.S. Government Obligations or both) the relevant series of Securities will
be rated in the highest generic long term debt rating category assigned by
one or more nationally recognized rating agencies to debt with respect to
which the issuer thereof has been released from its obligations to the same
extent that the Company has been released from its obligations under this
Indenture pursuant to Section 13.4 hereof.
European Communities
The term ``European Communities'' shall mean the European Economic
Community, the European Coal and Steel Community and the European Atomic
Energy Community.
Foreign Currency
The term ``Foreign Currency'' shall mean either (i) a currency issued by
the government of any country other than the United States or (ii) ECU's or
another composite currency the value of which is determined by reference to
the values of the currencies of any group of countries.
Funded Debt
The term ``Funded Debt'' shall mean all indebtedness for borrowed money
(other than Subordinated Debt) which under good accounting practice would
appear as long-term debt on a consolidated balance sheet of the Company and
its Subsidiaries.
Global Security
The term ``Global Security'' shall mean, with respect to any series of
Securities, a Security executed by the Company and authenticated and held
by the Trustee as agent for the Depository or delivered pursuant to the
Depository's instruction, all in accordance with this Indenture and
pursuant to a Company Order, which (i) shall be registered in the name of
the Depository or its nominee and (ii) shall constitute, and shall be
denominated in an amount equal to the aggregate principal amount of, all or
part of the Outstanding Securities of such series.
Holder
The terms ``Holder,'' ``Holder of Securities'' or other similar terms,
shall mean the person in whose name a particular Security shall be
registered on the books of the Company kept for that purpose in accordance
with the terms hereof, and the word ``majority,'' used in connection with
the terms ``Holder,'' ``Holder of Securities,'' or other similar terms,
shall signify the ``majority in principal amount'' whether or not so
expressed.
Indenture
The term ``Indenture'' shall mean this instrument as originally executed
or, if amended or supplemented as herein provided, as so amended or
supplemented, and shall include the terms of particular series of
Securities established as contemplated by Section 2.1.
Interest
The term ``Interest,'' when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity.
Interest Payment Date
The term ``Interest Payment Date,'' when used with respect to any Security,
shall mean the Stated Maturity of any installment of interest on the
Security.
Investments
The term ``Investments'' shall mean and include all investments, whether by
acquisition of stock or indebtedness, or by loan, advance, transfer of
property, capital contribution or otherwise.
Liabilities
The term ``Liabilities'' shall mean the amount of all liabilities
(excluding reserves deducted in determining Assets and liabilities which
under good accounting practice would be contingent) which under good
accounting practice would be included as liabilities in a consolidated
balance sheet of the Company and its Subsidiaries (excluding liabilities
due to pension and other post-retirement liabilities, unearned maintenance
agreement income, Subordinated Debt, deferred income taxes, capital stock,
capital in excess of par or stated value, surplus and surplus reserves)
plus the amount of all guarantees of liabilities of others or of dividends
not already included in such calculation.
Market Exchange Rate
The ``Market Exchange Rate'' on a given date for a given foreign currency
shall mean the noon buying rate in New York City for cable transfers in
such currency as certified for customs purposes by the Federal Reserve Bank
of New York on such date; provided, however, that in the case of European
Currency Units, Market Exchange Rate shall mean the rate of exchange
determined by the Council of European Communities (or any successor
thereto) as published on such date or the most recently available date in
the Official Journal of the European Communities (or any successor
publication).
Maturity
The term ``Maturity,'' when used with respect to any Security, shall mean
the date on which the principal of such Security or an installment of
principal becomes due and payable as therein or herein provided, whether at
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
Officers' Certificate
The term ``Officers' Certificate'' shall mean a certificate signed by the
Chairman of the Board of Directors, the Vice Chairman, the President or any
Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company.
Opinion of Counsel
The term ``Opinion of Counsel'' shall mean an opinion in writing signed by
legal counsel (who may be counsel to the Company) acceptable to the
Trustee.
Original Issue Discount Security
The term ``Original Issue Discount Security'' shall mean any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 6.1.
Outstanding
The term ``outstanding'' or ``principal amount outstanding,'' when used
with respect to the Securities, shall not, except as otherwise provided
herein, include (i) Securities held by the Company in its treasury, or (ii)
Securities for the payment or redemption of which moneys in the necessary
amount shall have been deposited in trust with the Trustee, provided that
if such Securities are to be redeemed prior to the Maturity thereof, notice
of such redemption shall have been duly given or provision satisfactory to
the Trustee shall have been made for giving such notice, or (iii)
Securities in lieu of or in substitution for which other Securities shall
have been authenticated and delivered pursuant to the terms of Section 2.3,
or (iv) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation. The term ``outstanding'' or ``principal amount
outstanding,'' when used with respect to indebtedness other than the
Securities, shall not include any such indebtedness held by the Company in
its treasury or for the payment or redemption of which moneys in the
necessary amount shall have been deposited in trust or set aside and
segregated in trust by the Company, provided that, if such other
indebtedness is to be redeemed prior to the maturity thereof, any notice of
such redemption required by the terms thereof shall have been duly given or
provision satisfactory to the trustee shall have been made for giving such
notice.
Person
The term ``Person'' shall mean an individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Principal Property
The term ``Principal Property'' shall mean all real property owned by the
Company constituting a part of any store, warehouse or distribution center
located within one of the 50 states of the United States or the District of
Columbia; provided, however, that such term shall not include any such
property constituting a part of any such store, warehouse or distribution
center unless the net book value on the consolidated balance sheet of the
Company and its Subsidiaries as of the end of the most recent fiscal
quarter for which such a consolidated balance sheet is available, prepared
in accordance with good accounting practice, of all real property
constituting a part of such store, warehouse or distribution center exceeds
.30% of Consolidated Net Tangible Assets and provided, further, that such
term shall not include any such property that, as set forth in an Officers'
Certificate, is not of material importance to the total business conducted
by the Company and its Subsidiaries, considered as a whole.
Redemption Date
The term ``Redemption Date,'' when used with respect to any Security to be
redeemed, shall mean the date fixed for such redemption by or pursuant to
this Indenture.
Redemption Price
The term ``Redemption Price'' shall mean the amount payable for the
redemption of any Security on the Redemption Date, and shall always include
interest accrued and unpaid to the Redemption Date, unless otherwise
specifically provided.
Regular Record Date
The term ``Regular Record Date'' for the interest payable on any Interest
Payment Date on the Securities of any series shall mean the date specified
for that purpose as contemplated by Section 2.1.
Responsible Officer
The term ``Responsible Officer,'' when used with respect to the Trustee,
shall mean any officer in its corporate trust division, or to whom any
corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
Sale and Lease-Back Transaction
The term ``Sale and Lease-Back Transaction'' shall mean any arrangement
whereby (a) property has been or is to be sold or transferred by the
Company to any Person with the intention on the part of the Company of
taking back a lease of such property pursuant to which the rental payments
are calculated to amortize the purchase price of such property
substantially over the useful life of such property and (b) such property
is in fact so leased by the Company.
Securities
The term ``Securities'' shall mean any Securities authenticated and
delivered under this Indenture.
Security Register
The term ``Security Register'' shall have the meaning specified in Section
2.5.
Special Record Date
The term ``Special Record Date'' for the payment of any Defaulted Interest
shall mean a date fixed by the Trustee pursuant to Section 2.7.
Stated Maturity
The term ``Stated Maturity,'' when used with respect to any Security or any
installment of interest thereon, shall mean the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of interest is due and payable.
Subordinated Debt
The term ``Subordinated Debt'' shall mean indebtedness of the Company with
respect to which, in the event of any liquidation, dissolution or other
winding up of the Company or any receivership, insolvency, bankruptcy,
liquidation, readjustment, reorganization or other similar proceedings
relative to the Company or its property, all principal, premium (if any)
and interest due on those Securities which, by their terms, are not
subordinate in right of payment to any other securities (whether or not
outstanding) and on all other debt of the Company ranking on a parity with
such Securities shall first be paid in full before any payment is made upon
such indebtedness, and if in the event and during the continuation of any
default, irrespective of any period of grace, in the payment of principal,
premium (if any) or interest on such Securities or such parity debt, no
payment of principal, premium (if any) or interest is permitted to be made
on such indebtedness.
Subsidiary; Voting Stock
The term ``Subsidiary'' shall mean any corporation of which shares of
Voting Stock entitled to elect a majority of the directors are at the time
owned directly or indirectly by the Company and its other Subsidiaries. The
term ``Voting Stock'' shall mean outstanding shares of stock having voting
power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power because of default in
dividends or some other default.
Trustee
The term ``Trustee'' shall mean the party named as such above until a
successor becomes such pursuant hereto and thereafter shall mean or include
each party who is then a trustee hereunder, and if at any time there is
more than one such party, ``Trustee'' as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities
of that series. If Trustees with respect to different series of Securities
are trustees hereunder, nothing herein shall constitute the Trustees as
co-trustees of the same trust, and each Trustee shall be the trustee of a
trust separate and apart from any trust administered by any other Trustee
with respect to a different series of Securities.
U.S. Government Obligations
The term ``U.S. Government Obligations'' shall mean securities which are
(i) direct obligations of the United States of America for the payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
U.S. Government Obligations or a specific payment of interest on or
principal of any such U.S. Government Obligations held by such custodian
for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt
from any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of interest on or principal of the U.S.
Government Obligations evidenced by such depository receipt.
SECTION 1.2. All terms used in this Indenture which are defined in the
Trust Indenture Act of 1939, as amended, or which are by reference therein
defined in the Securities Act of 1933, as amended (except as herein
otherwise expressly provided or unless the context otherwise requires),
shall have the meanings assigned to such terms in the Trust Indenture Act
of 1939, as amended, and the Securities Act of 1933, as amended, as they
were respectively in force at the date of this Indenture.
ARTICLE II
THE SECURITIES
SECTION 2.1. (a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a resolution of the Board and set forth in an
Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.4, 2.5, 2.6, 4.7 or
11.4);
(3) the date or dates on which the principal of the Securities of the
series is payable;
(4) the rate or rates (which may be fixed or variable) per annum at
which the Securities of the series shall bear interest, if any, the
date or dates from which such interest shall accrue, the date or dates
on which payment of such interest shall commence, the Interest Payment
Dates on which such interest shall be payable and the Regular Record
Date for the interest payable on any Interest Payment Date;
(5) if other than as set forth in Section 3.2, the place or places
where the principal of (and premium, if any, on) and interest, if any,
on Securities of the series shall be payable;
(6) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may
be redeemed, in whole or in part, at the option, or as an obligation,
of the Company;
(7) the obligation or right, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation or right;
(8) the terms, if applicable, of conversion or exchange for other
securities, at the option of the Company or the Holder, of Securities
of the series;
(9) any subordination provisions;
(10) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(11) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the Maturity thereof pursuant to
Section 6.1;
(12) the terms of any warrants attached to the Securities of the
series;
(13) the currency or currencies, including ECU or other composite
currencies, in which the Securities may be purchased and in which
principal of (and premium, if any) and interest, if any, on the
Securities of the series shall be payable (if other than Dollars);
(14) if the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of the series may be determined
with reference to an index, the manner in which such amounts shall be
determined;
(15) provisions, if any, for the defeasance of Securities of a
particular series (including provisions permitting defeasance of less
than all Securities of a particular series), which provisions may be
in addition to, in substitution for, in subtraction from, or in
modification of (or any combination of the foregoing) the provisions
of Article Thirteen;
(16) whether the Securities of the series are issuable in whole or in
part as one or more Global Securities and, in such case, the identity
of the Depository for such Global Security or Securities; and
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture but which may
modify or delete any such provision of this Indenture insofar as it
applies to such series; provided that no term thereof shall be
modified or deleted if imposed by operation of subsection (c) of
Section 318 of the Trust Indenture Act of 1939, as amended, and
provided further that any modification or deletion of the rights,
duties or immunities of the Trustee shall have been consented to in
writing by the Trustee).
If any of the foregoing terms are not available at the time such
resolutions are adopted, or such Officers' Certificate or any supplemental
indenture is executed, such resolutions, Officers' Certificate or
supplemental indenture may reference the document or documents to be
created in which such terms will be set forth prior to the issuance of such
Securities.
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to
such resolution of the Board and set forth in such Officers' Certificate or
in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a resolution of the Board, a copy of an appropriate record of such
action shall be included in the Officers' Certificate setting forth the
terms of the series.
(b) The Securities of each series shall be in substantially the form as
shall be established by or pursuant to a resolution of the Board or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required
or permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may be required to comply with any law or with any rules made pursuant
thereto or with any rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
(c) The Trustee's certificate of authentication on all Securities shall be
in substantially the following form:
This is one of the Securities of the series designated and referred to in
the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By
Authorized Signatory
SECTION 2.2. The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as
contemplated by Section 2.1. In the absence of any contrary provisions with
respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple
thereof and shall be payable only in Dollars.
SECTION 2.3. The Securities shall be executed on behalf of the Company by
any two of its Chairman of the Board of Directors, its Vice Chairman, its
President or one of its Vice Presidents, under its corporate seal
reproduced thereon. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a written order of
the Company signed by its Chairman of the Board of Directors, its Vice
Chairman, its President or one of its Vice Presidents for the
authentication and delivery of such Securities, and the Trustee in
accordance with such order shall authenticate and deliver such Securities.
If the form or terms of the Securities of the series have been established
in or pursuant to one or more resolutions of the Board as permitted by
Section 2.1, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to
Section 10.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(a) if the form and terms of such Securities have been established by
or pursuant to a resolution of the Board as permitted by Section 2.1,
that such form and terms have been established in conformity with the
provisions of this Indenture; and
(b) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and binding obligations of the Company in accordance with their terms,
subject to insolvency, bankruptcy, reorganization and other laws
relating to or affecting the enforcement of creditors' rights or by
general equity principles.
The Trustee shall have the right to decline to authenticate and deliver any
Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in
good faith by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees and/or responsible officers shall
determine (i) that such action would expose the Trustee to liability to
existing Holders, or (ii) in the case of Securities designated pursuant to
one or more resolutions of the Board as permitted by Section 2.1, that such
action would affect the Trustees' own rights, duties or immunities under
this Indenture or otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
SECTION 2.4. Pending the preparation of definitive Securities of any
series, the Company may execute, and upon a written order of the Company
signed by its Chairman of the Board of Directors, its Vice Chairman, its
President or one of its Vice Presidents, the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which
they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series, without charge to the Holder, upon surrender of
the temporary Securities of such series at the office or agency of the
Company for that series to be maintained in accordance with the provisions
of Section 3.2. Upon surrender for cancellation of any one or more
temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations. Until so exchanged the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture
as definitive Securities of such series.
SECTION 2.5. The Company shall keep or cause to be kept a register for
each series of Securities issued hereunder (herein called a ``Security
Register'') at any office or agency of the Company to be maintained in
accordance with the provisions of Section 3.2 in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for
the registration of Securities and of transfers of Securities. The Security
Register shall be in written form or capable of being converted into
written form within a reasonable time. Unless otherwise specifically
designated by the Company in a written notice to the Trustee, the Security
Register shall be maintained at the principal corporate trust office of the
Trustee.
Upon surrender for registration of transfer of any Security of any series
at the office or agency for that series to be maintained in accordance with
the provisions of Section 3.2, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and Stated Maturity
and bearing a number not contemporaneously outstanding.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and Stated Maturity and bearing a number
not contemporaneously outstanding upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Sections 2.4, 4.7 or 11.4, not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption
of Securities of that series selected for redemption under Section 4.3 and
ending at the close of business on the day of such mailing, or (ii) to
register the transfer of or exchange any Security theretofore designated
for redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part.
SECTION 2.6. If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a Security of the same series and principal amount and
Stated Maturity and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired
by a bona fide purchaser, the Company shall execute and upon its request
the Trustee shall authenticate and deliver, in lieu of any such destroyed,
lost or stolen Security, a Security of the same series and principal amount
and Stated Maturity and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a Security in substitution of such Security, pay such
Security, provided the conditions set forth in the next preceding paragraph
are satisfied.
Upon the issuance of any Security pursuant to this Section, the Company may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses, including counsel fees, of the Company and the Trustee, any
Authenticating Agent, and any paying agent or Security registrar connected
therewith and in addition a further sum not exceeding two dollars for each
Security so issued in substitution.
Every Security of any series issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost
or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen securities.
SECTION 2.7. Each installment of interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to or upon the written order of the Person in
whose name that Security is registered at the close of business on the
Regular Record Date for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called ``Defaulted Interest'') shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) the Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series are
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the
following manner: (a) the Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment which
shall be at least 20 days from the date of such notice, and at the
same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Clause
provided; (b) thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment; and (c) the Trustee
shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at his address as it appears in
the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series are registered at the close of business on
such Special Record Date; or
(2) the Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such
other Security.
SECTION 2.8. Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Security is registered upon
the Security Register as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any, on) and (subject to
Section 2.7) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee, or any agent of the Company or the Trustee from giving effect
to any written certification, proxy or other authorization furnished by the
Depository or its nominee, or impair, as between the Depository and holders
of beneficial interests in any Global Security, the operation of customary
practices governing the exercise of the rights of the Depository as holder
of such Global Security, including without limitation the granting of
proxies or other authorization, direction, notice, consent, waiver or other
action which a Holder is entitled to give or take under this Indenture.
SECTION 2.9. All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall be delivered to the Trustee and shall be promptly cancelled
by it. The Company may at any time deliver to the Trustee for cancellation
any Securities previously authenticated and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall
be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture.
The Trustee shall (i) deliver to the Company all cancelled Securities or
(ii) hold on behalf of the Company all or part of any such cancelled
Securities, in either case as directed by a written order of the Company
signed by its Chairman of the Board of Directors, its Vice Chairman, its
President or one of its Vice Presidents.
SECTION 2.10. (a) If the Company shall establish pursuant to Section 2.1
that the Securities of a particular series are to be issued in whole or in
part as one or more Global Securities, then the Company shall execute and
the Trustee shall, in accordance with Section 2.3 and the order of the
Company delivered to the Trustee thereunder, authenticate and deliver, one
or more Global Securities which (i) shall constitute, and shall be
denominated in an amount equal to the aggregate principal amount of, all or
part of the outstanding Securities of such series, (ii) shall be registered
in the name of the Depository or its nominee, (iii) shall be held by the
Trustee as agent for the Depository or delivered pursuant to the
Depository's instruction and (iv) shall bear a legend substantially to the
following effect: ``Except as otherwise provided in Section 2.10 of the
Indenture, this Security may be transferred, in whole but not in part, only
to another nominee of the Depository or to a successor Depository or to a
nominee of such successor Depository.''
(b) Notwithstanding any other provision (other than Section 2.10(c)) of
this Section 2.10 or of Section 2.5, the Global Securities of a series may
be transferred, in whole but not in part and in the manner provided in
Section 2.5, only to another nominee of the Depository for such series, or
to a successor Depository for such series selected or approved by the
Company or to a nominee of such successor Depository.
(c) If (i) the Company advises the Trustee in writing that the Depository
is no longer willing or able to discharge properly its responsibilities
with respect to any Securities of any series represented by one or more
Global Securities, and the Trustee or the Company is unable to locate a
qualified successor, or (ii) the Company, at its option, advises the
Trustee in writing that it has determined that any Securities of any series
represented by one or more Global Securities shall no longer be represented
by one or more Global Securities, then, in either event the Company will
execute and the Trustee, upon receipt of an Officers' Certificate
evidencing such determination by the Company will authenticate and deliver
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of such Global Securities in exchange for such Global
Securities. Upon the exchange of Global Securities for such Securities in
definitive registered form without coupons, in authorized denominations,
the Global Securities shall be cancelled by the Trustee and the provisions
of this Section 2.10 shall no longer be applicable to such Securities. Such
Securities in definitive registered form issued in exchange for Global
Securities pursuant to this Section 2.10(c) shall be registered in such
names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Persons in whose names such Securities are so registered.
SECTION 2.11. (a) Except as otherwise specified pursuant to Section 2.1,
payment of the principal of (and premium, if any) and interest on
Securities of any series will be made in Dollars.
(b) For purposes of any provision of this Indenture where the Holders of
outstanding Securities of a series may perform an act which requires that a
specified percentage of the outstanding Securities of such series perform
such act and for purposes of any decision or determination by the Trustee
of amounts due and unpaid for the principal (and premium, if any) and
interest on the outstanding Securities of such series in respect of which
moneys are to be disbursed ratably, the principal of (and premium, if any)
and interest on the outstanding Securities of such series denominated in a
Foreign Currency will be the amount in Dollars based upon the Market
Exchange Rate for such Foreign Currency on the latest date for which such
rate was established on or before the date for determining the Holders
entitled to perform such act, or the date of such decision or determination
by the Trustee, as the case may be.
SECTION 2.12. If the principal of (and premium, if any) and interest on
any Securities is payable in a Foreign Currency and such Foreign Currency
is not available for payment due to the imposition of exchange controls or
other circumstances beyond the control of the Company, then the Company
shall be entitled to satisfy its obligations to Holders under this
Indenture by making such payment in Dollars on the basis of the Market
Exchange Rate for such Foreign Currency on the latest date for which such
rate was established on or before the date on which payment is due. Any
payment made pursuant to this Section 2.12 in Dollars where the required
payment is in a Foreign Currency shall not constitute a default under this
Indenture.
ARTICLE III
COVENANTS OF THE COMPANY
Subject to the provisions of Section 13.4, so long as Securities are
outstanding hereunder, the Company covenants for the benefit of each series
of Securities that:
SECTION 3.1. The Company will punctually pay the principal (premium, if
any) and interest, if any, to become due in respect of all the Securities
of that series according to the terms of the Securities of that series and
this Indenture. Such interest on Securities shall be payable without
presentation of such Securities and (subject to the provisions of Section
2.7) only to or upon the written order of the Holders of such Securities.
Except as otherwise specified as contemplated by Section 2.1 for Securities
of any series, payments of interest shall be made either, at the option of
the Company, by check mailed to the address of the person entitled thereto
as such address shall appear on the Security Register for that series, or
at either of the offices or agencies of the Company maintained in
accordance with Section 3.2.
SECTION 3.2. The Company will maintain in the Borough of Manhattan of The
City of New York, and may maintain in the City of Chicago, the city in
which the principal executive offices of the Company are located or the
city in which the principal corporate trust office of the Trustee is
located, an office or agency where, except as otherwise provided herein,
the Securities of that series may be presented for payment, an office or
agency where the Securities of that series may be presented for
registration of transfer and for exchange as in this Indenture provided and
an office or agency where notices and demands to or upon the Company in
respect of such Securities or of this Indenture may be served. Until
otherwise designated by the Company in a written notice to the Trustee,
such office or agency in the Borough of Manhattan of The City of New York
shall be the principal corporate trust office of the Trustee.
SECTION 3.3. The Company will at all times cause all buildings and
equipment operated by it or any Wholly-Owned Subsidiary to be maintained
and kept in such condition, repair and working order as in its judgment is
necessary in the interest of its business and that of its Wholly-Owned
Subsidiaries. Nothing contained herein shall prevent or restrict the sale,
abandonment or other disposition of any property by the Company or its
Wholly-Owned Subsidiaries.
SECTION 3.4. The Company will at all times insure or act as self-insurer,
and cause its Wholly-Owned Subsidiaries to insure or act as self-insurers,
to such extent as the Company may determine is not unreasonably prejudicial
to the interests of the Holders.
SECTION 3.5.
(a) The Company will not issue, assume or guarantee any notes, bonds,
debentures or other similar evidences of Funded Debt secured by any
mortgage, security interest, pledge or lien (herein referred to as
``mortgage'') of or upon any Principal Property, whether owned at the
date of this Indenture or thereafter acquired, without making
effective provision, and the Company in each case will make or cause
to be made effective provision, whereby the principal amount of all of
the Securities from time to time outstanding shall be secured by such
mortgage equally and ratably with any and all other Funded Debt
thereby secured, so long as such Funded Debt shall be so secured;
provided, however, that the foregoing restriction shall not apply to
Funded Debt secured by any of the following:
(1) mortgages on any property existing at the time of acquisition
thereof by the Company;
(2) mortgages on property of a Person existing at the time such
Person is merged into or consolidated with the Company or at the
time of a sale, lease or other disposition of the properties of
such Person (or a division thereof) as an entirety or
substantially as an entirety to the Company, but only to the
extent that such mortgage as a result of such merger,
consolidation, sale, lease or other disposition is not extended
to property owned by the Company immediately prior thereto;
(3) mortgages on property to secure all or part of the cost of
acquiring, substantially repairing or altering, constructing,
developing or substantially improving such property, or to secure
Funded Debt incurred to provide funds for any such purpose or for
reimbursement of funds previously expended for any such purpose,
provided the commitment of the creditor to extend the credit
secured by any such mortgage shall have been obtained not later
than twelve months after the later of (a) the completion of the
acquisition, substantial repair or alteration, construction,
development or substantial improvement of such property or (b)
the placing in operation of such property or of such property as
so substantially repaired or altered, constructed, developed or
substantially improved;
(4) mortgages securing Funded Debt payable on demand or not more
than one year after the date as of which the determination is
made (excluding any Funded Debt renewable or extendable at the
option of the Company for a period or periods ending more than
one year after the date as of which such determination is made);
(5) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of
any mortgage referred to in the foregoing clauses (1) to (4),
inclusive, and not otherwise authorized by said clauses (1) to
(4); provided, however, that Funded Debt may only be secured
pursuant to this Section to the extent of the principal amount of
Funded Debt, plus any premium or fee payable in connection with
any such extension, renewal or replacement, so secured at the
time of such extension, renewal or replacement.
(b) Notwithstanding the provisions of Section 3.5(a), the Company may
issue, assume or guarantee Funded Debt secured by mortgages which
would otherwise be subject to the restrictions of Section 3.5(a)
provided that the amount being issued, assumed or guaranteed, together
with all Attributable Debt outstanding pursuant to Section 3.6(b) and
all Funded Debt outstanding pursuant to this Section 3.5(b), does not
exceed 15% of Consolidated Net Tangible Assets. Notwithstanding the
foregoing, nothing herein shall restrict the ability of the Company to
transfer a Principal Property, subject to the limitations set forth in
Sections 3.6 and 3.7 and Article IX.
SECTION 3.6.
(a) The Company will not enter into any Sale and Lease-Back Transaction
with respect to any Principal Property (except for a transaction providing
for a lease for a term, including any renewal thereof at the option of the
lessor, of not more than three years), if the commitment by or on behalf of
the purchaser is obtained more than twelve months after the later of (i)
the completion of the acquisition, substantial repair or alteration,
construction, development or substantial improvement of such Principal
Property or (ii) the placing in operation of such Principal Property or of
such Principal Property as so substantially repaired or altered,
constructed, developed or substantially improved, unless either (x) the
Attributable Debt with respect to such transaction does not exceed the
principal amount of Funded Debt of the Company secured by a mortgage on
such property to which the restrictions in Section 3.5(a) would not apply
pursuant to subsections (1), (2), (3), or (5) of Section 3.5(a) or (y) the
Company shall apply or cause to be applied, in the case of a sale or
transfer for cash, an amount equal to the net proceeds thereof (but not in
excess of the net book value of such Principal Property at the date of such
sale or transfer) and, in the case of a sale or transfer otherwise than for
cash, an amount equal to the fair value (as set forth in an Officer's
Certificate) of the Principal Property so leased, to the retirement, within
180 days after the effective date of such Sale and Lease-Back Transaction,
of Securities or other Funded Debt of the Company; provided, however, that
any such retirement of Securities shall be in accordance with Article IV
and any other terms and provisions of this Indenture and the Securities
applicable to optional redemption of such Securities. It is understood that
retirement of Securities pursuant to this Section shall not be deemed to be
a redemption subject to any limitation contained in this Indenture or the
terms of such Securities with respect to such Securities on the right to
redeem such Securities from, or in anticipation of, moneys borrowed at an
interest cost less than a specified rate per annum.
(b) Notwithstanding the provisions of Section 3.6(a), the Company may enter
into a Sale and Lease-Back Transaction which would otherwise be subject to
the restrictions of Section 3.6(a) if the amount of Attributable Debt
resulting therefrom, together with all Funded Debt outstanding pursuant to
Section 3.5(b) and all Attributable Debt outstanding pursuant to this
Section 3.6(b), does not exceed 15% of Consolidated Net Tangible Assets.
SECTION 3.7.
The Company will not transfer any Principal Property to any Subsidiary,
unless the Subsidiary, in connection with such transfer, shall deliver to
the Company the fair value of such property, at the time of such transfer
(as set forth in an Officer's Certificate), within 120 days of the
effective date of such transfer.
SECTION 3.8.
The Company will
(a) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports which the Company may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended (or copies of such portions
thereof as may be prescribed by the Commission under the provisions of the
Trust Indenture Act of 1939, as amended); or, if the Company is not
required to file with the Commission information, documents or reports
pursuant to either Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended, then the Company will file with the Trustee and
will file with the Commission, in accordance with rules and regulations
prescribed by the Commission, such of the supplementary and periodic
information, documents and reports required pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended, in respect of a security
listed and registered on a national securities exchange as may be
prescribed in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants provided for in this
Indenture as may be required by such rules and regulations, including, in
the case of annual reports, if required by such rules and regulations,
certificates or opinions of independent public accountants, conforming to
the requirements of Section 14.6, as to compliance with conditions or
covenants, compliance with which is subject to verification by accountants;
(c) transmit to the Holders of that series of Securities, in the manner and
to the extent provided in Subdivision (c) of Section 10.10 hereof, such
summaries of any information, documents and reports required to be filed
with the Trustee pursuant to the provisions of Subdivisions (a) and (b) of
this Section 3.8 as may be required by the rules and regulations of the
Commission under the provisions of the Trust Indenture Act of 1939, as
amended; and
(d) furnish or cause to be furnished to the Trustee semi-annually not later
than each Interest Payment Date for each series of Securities, provided
that interest on such Securities is payable at least semi-annually, and at
such other times as the Trustee may request in writing, within 30 days
after receipt by the Company of any such request, a list in such form as
the Trustee may reasonably require containing all information in the
possession or control of the Company or of any paying agent, other than the
Trustee, as to the names and addresses of the Holders of such series of
Securities obtained since the date as of which the next previous list, if
any, was furnished. Any such list may be dated as of a date not more than
15 days prior to the time such information is furnished or caused to be
furnished, and need not include information received after such date.
SECTION 3.9. Within 120 days after the close of each fiscal year of the
Company ending after the date hereof, the Company will file with the
Trustee a statement signed by the Chairman of the Board of Directors, or
its Vice Chairman or its President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company (provided, that one of such signatures shall be
the Company's principal executive officer, principal financial officer or
principal accounting officer), stating that in the course of the
performance by the signers of their duties as officers of the Company they
would normally obtain knowledge of any default by the Company in the
performance or fulfillment of any covenant, agreement or condition
contained in this Indenture, and stating whether or not they have obtained
knowledge of any such default, and, if so, specifying each such default of
which the signers have knowledge and the nature thereof. For purposes of
this Section 3.9, ``default'' shall mean any default defined in Section 6.1
hereof, irrespective of the giving of any specified notice and excluding
any periods of grace provided for therein.
SECTION 3.10. The Company will cause any paying agent which it may
appoint, other than the Trustee, to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee,
(a) that it will hold all sums held by it as such agent for the
payment of the principal of and premium, if any, or interest on the
Securities of that series (whether such sums have been paid to it by
the Company or by any other obligor on such Securities) in trust for
the benefit of the Holders of such Securities or of the Trustee, as
the case may be,
(b) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on such Securities) to make any payment of
the principal (and premium, if any, on) or interest on such Securities
when the same shall be due and payable, and
(c) that in the case of a default by the Company hereunder, it will
deliver to the Trustee any sums then held by it in respect of the
Securities.
If the Company acts as its own paying agent, it will, on or before each due
date of principal (and premium, if any) or of any installment of interest
on such Securities, set aside and segregate and hold in trust for the
benefit of the Holders of such Securities or the Trustee a sum sufficient
to pay such principal (and premium, if any) or interest and will notify the
Trustee of such action.
ARTICLE IV
REDEMPTION OF SECURITIES
SECTION 4.1. Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section 2.1 for
Securities of any series) in accordance with this Article.
SECTION 4.2. The election of the Company to redeem any Securities shall be
evidenced by an Officers' Certificate. In case of any redemption at the
election of the Company of less than all the Securities of any series, the
Company shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities of such series to be redeemed. In the case of any redemption of
Securities which is subject to any restriction on such redemption provided
in the terms of such Securities or elsewhere in this Indenture, the Company
shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
SECTION 4.3. If less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed shall be selected from
the outstanding Securities of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal
to the minimum authorized denomination for Securities of that series or any
integral multiple thereof, if less than all the Securities of that series
are to be redeemed on the applicable Redemption Date) of the principal
amount of Securities of such series of a denomination larger than the
minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of the Securities selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in
the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to
be redeemed.
SECTION 4.4. Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his
address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Securities to be
redeemed;
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date;
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price; and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Any notice which is mailed in the manner herein provided shall be
conclusively presumed to be duly given, whether or not the Holder receives
such notice; any failure to give such notice by mail or any defect in such
notice to the Holder of a particular Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
SECTION 4.5. On or prior to any Redemption Date, the Company shall deposit
with the Trustee or with a paying agent (or, if the Company is acting as
its own paying agent, segregate and hold in trust as provided in Section
3.10) an amount of money sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 4.6. Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such
date (unless the Company shall default on the payment of the Redemption
Price and accrued interest) such Securities shall cease to bear interest.
Upon surrender of any such Security for redemption in accordance with said
notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; provided, however,
that installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities,
registered as such at the close of business on the relevant Regular or
Special Record Dates according to their terms and the provisions of Section
2.7.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until
paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 4.7. Any Security which is to be redeemed only in part shall be
surrendered at the office or agency of the Company to be maintained
pursuant to Section 3.2 (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and to the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a Security or Securities of the same
series and Stated Maturity of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered and
bearing a number not contemporaneously outstanding. If a Global Security is
so surrendered such new Security so issued shall be a Global Security.
ARTICLE V
SINKING FUNDS
SECTION 5.1. The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as
otherwise specified as contemplated by Section 2.1 for Securities of such
series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a ``mandatory sinking
fund payment'', and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
``optional sinking fund payment''. Unless otherwise provided for by the
terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 5.2. Each
sinking fund payment shall be applied to the redemption of Securities of
any series as provided for by the terms of Securities of such series.
SECTION 5.2. The Company (1) may deliver outstanding Securities (including
for purposes of this Clause (1) any Securities held by the Company in its
treasury) of a series (other than any previously called for redemption) and
(2) may, by written notice to the Trustee, apply as a credit Securities of
a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be
made pursuant to the terms of such Securities; provided, however, that such
Securities have not been previously so credited. Such Securities shall be
credited for such purpose by the Trustee at the Redemption Price specified
in such Securities for redemption through operation of the sinking fund and
the amount of such sinking fund payment shall be reduced accordingly.
SECTION 5.3. Not less than 45 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash and
the portion thereof, if any, which is to be satisfied by crediting
Securities of that series pursuant to Section 5.2 and will also deliver to
the Trustee any Securities to be delivered pursuant to Clause (1) of
Section 5.2. Not less than 30 days before each such sinking fund payment
date the Trustee shall select or cause to be selected the Securities to be
redeemed upon such sinking fund payment date in the manner specified in
Section 4.3 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section
4.4. Such notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Sections 4.6 and
4.7.
ARTICLE VI
REMEDIES UPON DEFAULT
SECTION 6.1. Subject to the provisions of Section 2.12, the following
events are hereby defined for all purposes of this Indenture with respect
to Securities of any series (except where the term is otherwise defined for
specific purposes) as ``defaults'':
(a) Failure to pay the principal of (and premium, if any, on) any of
the Securities of that series, when and as the same shall become due
and payable, whether at Stated Maturity thereof, by call for
redemption or otherwise; or
(b) Failure to pay any installment of interest on any of the
Securities of that series, when and as the same shall become payable
as therein expressed, and such failure shall continue for a period of
30 days (it being understood that if the entire amount of such payment
of interest is deposited by the Company with the Trustee, or with
another paying agent duly appointed hereunder, before the expiration
of such period of 30 days, such default shall no longer be considered
to be continuing under this Indenture); or
(c) Failure to perform or observe any other of the covenants,
conditions or agreements on the part of the Company in this Indenture
(other than a covenant, condition or agreement a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture
solely for the benefit of series of Securities other than that series)
or in the Securities of that series contained, and such failure shall
continue for a period of 60 days after written notice to the Company
from the Trustee or to the Company and to the Trustee from the Holders
of not less than 25% of the Securities of that series then outstanding
under this Indenture; or
(d) Except as a result of compliance with any court order to which the
Company is subject or any applicable law or any government decree, if
an event of default as defined in any mortgage, indenture or
instrument, under which there may be issued, or by which there may be
secured or evidenced, any indebtedness for borrowed money of the
Company (including this Indenture), whether such indebtedness now
exists or shall hereafter be created, shall happen and shall result in
such indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable, and such
acceleration shall not be rescinded or annulled within 30 days after
written notice to the Company from the Trustee or to the Company and
to the Trustee from the Holders of not less than 25% of the Securities
of that series then outstanding under this Indenture; provided,
however, that it shall not be a default hereunder if the principal
amount of indebtedness the maturity of which is so accelerated is less
than $100,000,000; provided, further, that if, prior to a declaration
of acceleration of the maturity of the Securities then outstanding or
the entry of judgment in favor of the Trustee in a suit pursuant to
Section 6.2, such default shall be remedied or cured by the Company or
waived by the holders of such indebtedness, or such indebtedness shall
be discharged, then the default hereunder by reason thereof shall be
deemed likewise to have been thereupon remedied, cured or waived
without further action upon the part of either the Trustee or any of
the Holders of the Securities; or
(e) If the Company shall file a petition commencing a voluntary case
under any chapter of the Federal bankruptcy laws; or the Company shall
file a petition or answer or consent seeking reorganization,
arrangement, adjustment, or composition under any other similar
applicable Federal law, or shall consent to the filing of any such
petition, answer, or consent; or the Company shall appoint, or consent
to the appointment of a custodian, receiver, liquidator, trustee,
assignee, sequestrator or other similar official in bankruptcy or
insolvency of it or of any substantial part of its property; or shall
make an assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due;
or
(f) If any order for relief against the Company shall have been
entered by a court having jurisdiction in the premises under any
chapter of the Federal bankruptcy laws, and such order shall have
continued undischarged or unstayed for a period of 120 days; or a
decree or order by a court having jurisdiction in the premises shall
have been entered approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of the Company
under any other similar applicable Federal law, and such decree or
order shall have continued undischarged or unstayed for a period of
120 days; or a decree or order of a court having jurisdiction in the
premises for the appointment of a custodian, receiver, liquidator,
trustee, assignee, sequestrator, or other similar official in
bankruptcy or insolvency of the Company or of any substantial part of
its property, or for the winding up or liquidation of its affairs,
shall have been entered, and such decree or order shall have remained
in force undischarged or unstayed for a period of 120 days; or
(g) Any other default provided with respect to Securities of that
series.
If one or more defaults with respect to Securities of any series shall
happen and be continuing, then, and in each and every such case, either the
Trustee, by notice in writing to the Company, or the Holders of not less
than 25% in principal amount of the Securities of that series then
outstanding, by notice in writing to the Company and to the Trustee, may
declare due and payable, if not already due and payable, the principal
amount (or, if the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all of the Securities of that series; and upon any
such declaration all Securities of that series shall become and be
immediately due and payable, anything in this Indenture or in any of such
Securities contained to the contrary notwithstanding. This provision,
however, is subject to the condition that if, at any time after the
principal (or portion thereof) of the Securities of that series shall have
been declared due and payable, and prior to the Stated Maturity of the
principal thereof, all arrears of interest upon all such Securities (with
interest so far as may be lawful on any overdue installments of interest at
the rate specified in such Securities) and the expenses of the Trustee, its
agents or attorneys shall be paid by or for the account of the Company, and
all defaults as aforesaid (other than the payment of principal which has
been so declared due and payable) shall have been made good or secured to
the satisfaction of the Trustee and provision deemed by the Trustee to be
adequate shall be made therefor, then and in every such case the Trustee
shall, upon the written request of the Holders of a majority in principal
amount of the Securities of that series then outstanding, delivered to the
Company and to the Trustee, waive such default and its consequences and
rescind or annul such declaration; but no such waiver shall extend to or
affect any subsequent default, or impair any right consequent thereon.
Notwithstanding the foregoing, to the extent the Company shall have been
relieved of any of its obligations under this Indenture with respect to
Securities of any series pursuant to Section 13.4 hereof, the failure of
the Company to perform any such obligations as to which it has been
relieved shall not constitute a default as contemplated by this Indenture.
SECTION 6.2. In case the Company:
(a) shall fail to pay any installment of interest on any Security of
any series when and as it shall become payable and such failure shall
have continued for a period of 30 days (it being understood that if
the entire amount of such payment of interest is deposited by the
Company with the Trustee, or with another paying agent duly appointed
hereunder, before the expiration of such period of 30 days, such
default shall no longer be considered to be continuing under this
Indenture); or
(b) shall fail to pay the principal, or portion thereof, of (or
premium, if any, on) any Security of any series when it shall have
become due and payable, whether at the Stated Maturity thereof, by
call for redemption, by declaration as authorized by this Indenture
(unless annulled pursuant to Section 6.1), or otherwise;
then, upon demand of the Trustee, the Company shall pay to the Trustee, for
the benefit of the Holders of the Securities of that series then
outstanding, the whole amount which then shall have become due on all such
Securities for principal (or premium, if any) or interest, as the case may
be, including interest at the rate specified in the Securities of that
series on overdue principal (and premium, if any) and, so far as may be
lawful, on overdue installments of interest; and in case the Company shall
fail to pay the same forthwith upon such demand, the Trustee in its own
name and as trustee of an express trust, shall be entitled to recover
judgment for the whole amount so due and unpaid against the Company or any
other obligor on the Securities of that series. The right of the Trustee to
recover such judgment shall not be affected by the exercise of any other
right, power or remedy for the enforcement of the provisions of this
Indenture.
The Trustee shall be entitled and empowered, either in its own name or as
trustee of an express trust, or as attorney-in-fact for the Holders of the
Securities of any series, or in any one or more of such capacities, to file
such proof of debt, amendment of proof of debt, claim, petition or other
document as may be necessary or advisable in order to have the claims of
the Trustee and of the Holders of the Securities of that series allowed in
any equity receivership, insolvency, bankruptcy, liquidation, readjustment,
reorganization or other judicial proceedings relative to the Company or any
other obligor on such Securities or their creditors, or affecting their
property. The Trustee is hereby irrevocably appointed (and the successive
respective Holders of the Securities of that series by taking and holding
the same shall be conclusively deemed to have so appointed the Trustee) the
true and lawful attorney-in-fact of the respective Holders of the
Securities of that series, with authority to make and file in the
respective names of the Holders of such Securities, or on behalf of the
Holders of the Securities of that series as a class, subject to deduction
from any such claims of the amounts of any claims filed by any of the
Holders of the Securities of that series themselves, any proof of debt,
amendment of proof of debt, claim, petition or other document in any such
proceeding and to receive payment of any sums becoming distributable on
account thereof, and to execute any such other papers and documents and to
do and perform any and all such acts and things including participating as
a member of any official or unofficial committee of creditors acting with
respect to such proceedings for and on behalf of such holders of the
Securities of that series, as may be necessary or advisable in the opinion
of the Trustee in order to have the respective claims of the Trustee and of
the Holders of the Securities of that series allowed in any such
proceedings, and to receive payment of or on account of such claims;
provided, however, that nothing contained in this Indenture shall be deemed
to give the Trustee any right to accept or consent to any plan of
reorganization or otherwise by action of any character in any such
proceedings to waive or change in any way any right of any Holder.
Any moneys received by the Trustee under this Section 6.2 shall be applied
in the order following, at the date or dates fixed by the Trustee for the
distribution of such moneys, upon presentation of the several Securities of
any series, and stamping thereon the payment, if only partially paid, and
upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection, and
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses incurred, and all advances made, by
the Trustee except as a result of its negligence or bad faith;
Second: In case the principal of (and premium, if any, on) the
outstanding Securities of that series shall not have become due and be
unpaid, to the payment of interest on the Securities of that series,
in the order of the maturity of the installments of such interest,
with interest, so far as may be lawful, upon the overdue installments
of interest at the rate specified in the Securities of that series,
such payments to be made ratably to the persons entitled thereto,
without discrimination or preferences;
Third: In case the principal of (or premium, if any, on) the
outstanding Securities of that series shall have become due, by
declaration or otherwise, to the payment of the whole amount then
owing and unpaid upon such Securities of that series for principal
(and premium, if any) and interest, with interest at the rate
specified in the Securities of that series on the overdue principal
(and premium, if any) and, so far as may be lawful, on the overdue
installments of interest; and in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon
such Securities, then to the payment of such principal (and premium,
if any) and interest, without preference or priority of principal over
interest, or of interest over principal or of any installment of
interest over any other installment of interest, ratably to the
aggregate of such principal and accrued and unpaid interest;
Fourth: In case the Trustee shall retain possession of any funds after
all obligations of the Company hereunder have been fully paid and
satisfied, such funds shall be paid to the Company, its successors or
assigns;
provided, however, that when interest alone is to be paid, the Trustee at
its election may waive presentation of the Securities of that series.
SECTION 6.3. All rights of action under this Indenture or any of the
Securities outstanding hereunder, enforceable by the Trustee, may be
enforced by the Trustee without possession of any of the Securities or the
production thereof at the trial or other proceeding relative thereto, and
any such suit or proceedings instituted by the Trustee shall be brought for
the ratable benefit of the Holders of the Securities in respect of which
any judgment has been recovered, subject to the provisions of this
Indenture.
SECTION 6.4. No delay or omission of the Trustee or of the Holders of any
Securities to exercise any rights or powers accruing upon any default shall
impair any such right or power, or shall be construed to be a waiver of any
such default or acquiescence therein; and every power and remedy given by
this Article to the Trustee or the Holders may be exercised from time to
time and as often as may be deemed expedient by the Trustee or by the
Holders.
SECTION 6.5. If any one or more defaults shall happen and be continuing,
the Trustee may, in its discretion, proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee, being advised by its counsel, shall deem most
effectual to protect and enforce any of said rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific performance of any covenant or agreement contained
in the Indenture or in aid of the exercise of any power granted in the
Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.
Provided the Securities of any series shall not then be due and payable by
reason of a declaration pursuant to Section 6.1 hereof, the Holders of a
majority in principal amount of the Securities of that series at the time
outstanding may on behalf of the Holders of all of such Securities waive
any past default hereunder and its consequences, except a default in the
payment of interest on or the principal of (or premium, if any, on) any of
such Securities. In the case of any such waiver, the Company, the Trustee
and the Holders of such Securities shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 6.6. The Holders of a majority in principal amount of the
Securities of any series then outstanding shall have the right, by an
instrument in writing executed and delivered to the Trustee, to direct the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any power or trust conferred
upon the Trustee under this Indenture; provided, however, that subject to
the provisions of Section 10.1 of this Indenture, the Trustee shall have
the right to decline to follow any such direction if the Trustee being
advised by counsel determines that the action or proceeding so directed may
not lawfully be taken or if the Trustee in good faith shall by Responsible
Officers determine that the action or proceeding so directed would involve
the Trustee in liability.
SECTION 6.7. No Holder of any Security of any series shall have the right
to institute any suit, action or proceeding, in equity or at law, for the
execution of any trust or power hereof, or for the enforcement of any other
remedy under or upon this Indenture, unless such Holder previously shall
have given to the Trustee written notice of default with respect to the
Securities of that series, and unless also the Holders of a majority in
principal amount of the Securities of that series then outstanding shall
have made written request upon the Trustee and shall have afforded to it a
reasonable opportunity either to proceed to exercise the powers
hereinbefore granted or to institute such action, suit or proceeding in its
own name, and shall have offered to the Trustee security and indemnity
satisfactory to it against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee shall have refused or
neglected to comply with such request within a reasonable time; it being
understood and intended that no one or more Holders of Securities of that
series shall have any right in any manner whatever hereunder or under the
Securities of that series by his or their action to enforce any right
hereunder except in the manner herein provided, and that all proceedings
hereunder, at law or in equity, shall be instituted, had and maintained in
the manner herein provided and for the ratable benefit of all Holders of
such Securities. Nothing herein contained shall, however, affect or impair
the right which is absolute and unconditional, of any Holder of any
Security to institute suit to enforce the payment of the principal of (or
premium, if any, on) and interest on his Security at and after the
respective due dates expressed in such Security (including Maturity by call
for redemption, declaration {unless annulled pursuant to Section 6.1
hereof} of the acceleration of the Maturity of such principal {or premium
if any, on} or interest, or otherwise), or the obligation of the Company,
which is also absolute and unconditional, to pay the principal of (or
premium, if any, on) and interest on each of the Securities of that series
to the respective Holders thereof at the times and places in the Securities
expressed.
Anything to the contrary notwithstanding contained in this Section 6.7, the
parties to this Indenture agree and each Holder of any Security of any
series by his acceptance thereof shall be deemed to have agreed that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee
for any action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and
such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merit and good faith of the claims or defenses made by
such party litigant; provided, however, that the provisions of this
paragraph shall not apply to any suit instituted, directly or through an
agent or agents, by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than 10% in principal
amount of the Securities of any series outstanding or to any suit
instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any, on) or interest on his Securities of that
series at and after the respective due dates of such principal (premium, if
any) or interest expressed in his Securities of that series.
SECTION 6.8. No Securities of any series which are known by the Trustee to
be owned or held by, for the account of or for the benefit of, the Company
or any other obligor under this Indenture or any Affiliate of the Company
or of such other obligor (other than Securities of that series pledged in
good faith which would be deemed outstanding under the provisions of
Section 7.4) shall be deemed outstanding for the purpose of any payment or
distribution provided for in this Article.
SECTION 6.9. If the Trustee or any Holder shall have proceeded to enforce
any right under this Indenture, and such proceedings shall have been
discontinued or abandoned because of waiver, or for any other reason, or
shall have been determined adversely to the Trustee or such Holder, then,
and in any such case, the Company and the Trustee and such Holder or
Holders shall each be restored to its former position and rights hereunder,
and all rights, remedies and powers of the Trustee and the Holders shall
continue as though no such proceedings had been taken.
ARTICLE VII
CONCERNING THE HOLDERS
SECTION 7.1. Whenever in this Indenture it is provided that the Holders of
a specified percentage or a majority in aggregate principal amount of the
Securities of any series may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the
taking of any other action) the fact that at the time of taking any such
action the Holders of such specified percentages have joined therein may be
evidenced (a) by any instrument or any number of instruments of similar
tenor executed by Holders of Securities of that series in person or by
attorney or proxy appointed in writing, or (b) by the record of the Holders
of Securities of that series voting in favor thereof at any meeting of such
Holders duly called and held in accordance with the provisions of Article
XII, or (c) by a combination of such instrument or instruments and any such
record of such a meeting of such Holders. The Company or the Trustee may
(and in case of any action taken by Holders of a specified percentage or
majority in aggregate principal amount of the Securities of any series
pursuant to Sections 6.1 or 6.6 hereof, the Trustee shall) set a record
date and time for purposes of determining the identity of Holders of any
series entitled to vote or consent to any action, which shall be the later
of 30 days prior to the first solicitation of such consent or the date of
the most recent list of Holders of such series of Securities furnished to
the Trustee prior to such solicitation pursuant to Section 3.8(d) hereof.
If the Company or the Trustee sets such a record date, only those persons
who are registered Holders of such Securities at the record date and time
so fixed shall be entitled to vote or consent with respect to such action
whether or not they are Holders at the time of such vote or consent.
SECTION 7.2. Subject to the provisions of Section 10.1, proof of the
execution of any instrument by a Holder of Securities of any series or his
attorney or proxy and proof of the holding by any person of any of the
Securities of that series shall be sufficient for any purpose of this
Indenture if made in the following manner:
(a) The fact and date of the execution by any such person of any
instrument may be proved by the certificate of any notary public, or
other officer of any jurisdiction of or within the United States of
America authorized to take acknowledgments of deeds to be recorded in
such jurisdiction, that the person executing such instrument
acknowledged to him the execution thereof, or by an affidavit of a
witness to such execution sworn to before any such notary or other
such officer. Where such execution is by an officer of a corporation
or association or a member of a partnership on behalf of such
corporation, association or partnership, such certificate or affidavit
shall also constitute sufficient proof of his authority.
(b) The ownership of Securities of that series shall be proved by the
Security Register with respect to such Securities or by a certificate
of any duly appointed registrar thereof.
The Trustee shall not be bound to recognize any person as a Holder of
Securities of any series unless and until his authority to vote the
Securities held by him is proved in the manner in this Article VII
provided.
The record of any Holders' meeting shall be proved in the manner provided
in Section 12.6.
The Trustee may require such additional proof of any matter referred to in
this Section 7.2 as it shall deem necessary.
SECTION 7.3. The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the person in
whose name any Security shall be registered upon the Security Register as
the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notice of ownership or writing thereon made
by anyone other than the Company or any Security registrar) for the purpose
of receiving payment of or on account of the principal of (premium, if any,
on) and interest on such Security and for all other purposes; and neither
the Company nor the Trustee nor any Authenticating Agent nor any paying
agent nor any Security registrar shall be affected by any notice to the
contrary. All such payments so made to any such registered Holder for the
time being or upon his order shall be valid and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Security.
SECTION 7.4. In determining whether the Holders of the requisite aggregate
principal amount of Securities of any series have concurred in any
direction, consent or waiver under this Indenture, Securities of that
series which are owned by or held by or for the account of or interest of
the Company or any other obligor upon the Securities of that series, or any
Affiliate of the Company or of any other obligor upon the Securities of
that series, shall be disregarded and deemed not to be outstanding for the
purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver only Securities of that series which the
Trustee knows are so owned or held shall be so disregarded. The Securities
of that series so owned or held which have been pledged in good faith may
be regarded as outstanding for the purposes of this Section 7.4 if the
pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Securities and that the pledgee is not an Affiliate of
the Company or of any such other obligor. In case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
SECTION 7.5. Any demand, request, waiver, consent or vote of the Holder of
any Security of any series shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Security, and of any
Security issued in exchange therefor or in place thereof, irrespective of
whether or not any notation in regard thereto is made upon such Security.
Any action taken by the Holders of the majority or percentage in aggregate
principal amount of the Securities of that series specified in this
Indenture in connection with such action shall be conclusively binding upon
the Company, the Trustee and the Holders of all the Securities of that
series.
ARTICLE VIII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
SECTION 8.1. No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security of any series, or for any
claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, shareholder, officer or director, as such, past, present
or future, of the Company or of any successor corporation, either directly
or through the Company, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no
such personal liability whatever shall attach to, or is or shall be
incurred by the incorporators, shareholders, officers or directors, as
such, of the Company or of any successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Securities of any series or implied therefrom;
and that any and all such personal liability, either at common law or in
equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, shareholder, officer or director,
as such, because of the creation of the indebtedness hereby authorized, or
under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any Security of any series or implied therefrom, are
hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of such
Securities.
ARTICLE IX
MERGER, CONSOLIDATION OR SALE
SECTION 9.1. Nothing in this Indenture shall prevent any consolidation or
merger of the Company with or into any other corporation, or any
consolidation or merger of any other corporation with or into the Company,
or any sale or transfer of its assets and liabilities substantially as an
entirety to any other corporation lawfully entitled to acquire the same;
provided, however, that, so long as Securities are outstanding hereunder,
the Company covenants and agrees that no such consolidation, merger, sale
or transfer shall be made unless after giving effect to any such
transaction no Event of Default, and no event which, after notice or lapse
of time, or both, would become an Event of Default, shall have happened and
be continuing; and provided, further, that, so long as Securities are
outstanding hereunder, the Company covenants and agrees, that any such
consolidation, merger, sale or transfer shall be upon the condition that
the due and punctual payment of the principal of (or premium, if any, on)
and interest on, all the Securities according to their tenor, and the due
and punctual performance and observance of all the terms, covenants and
conditions of this Indenture to be kept or performed by the Company shall,
by an indenture supplemental hereto, executed and delivered to the Trustee,
be assumed by the corporation (if other than the Company) formed by or
resulting from any such consolidation or merger, or which shall have
received the transfer of the assets and liabilities of the Company
substantially as an entirety, just as fully and effectually as if such
successor corporation had been the original party of the first part hereto;
and in the event of any such sale or transfer the predecessor Company may
be dissolved, wound up and liquidated at any time thereafter.
SECTION 9.2. Every such successor corporation upon executing an indenture
supplemental hereto, as provided in Section 9.1, in form satisfactory to
the Trustee, shall succeed to and be substituted for the Company with the
same effect as if it had been named herein as the Company; and any order,
certificate or resolution of officers of the Company or the Board provided
for in this Indenture may be made by like officials of such successor
corporation. Such successor corporation may thereupon cause to be signed,
either in its own name or in the name of the Company, with such suitable
reference, if any, to such consolidation, merger, sale or transfer as may
be required by the Trustee, any or all of the Securities of any series
which shall not theretofore have been signed by the Company and
authenticated by the Trustee or an Authenticating Agent on its behalf; and
upon the written order of such successor corporation in lieu of the
Company, and subject to all the terms, conditions and restrictions herein
prescribed with respect to the authentication and delivery of the
Securities of any series, the Trustee or an Authenticating Agent on its
behalf shall authenticate and deliver any and all Securities of that series
which shall have been previously signed by the proper officers of the
Company and delivered to the Trustee or an Authenticating Agent on its
behalf for authentication, and any of such Securities which such successor
corporation shall thereafter, in accordance with the provisions of this
Indenture, cause to be signed and delivered to the Trustee or an
Authenticating Agent on its behalf for such purpose. All Securities of that
series so authenticated and delivered shall in all respects have the same
rank as the Securities of that series theretofore or thereafter
authenticated and delivered in accordance with the terms of this Indenture.
In case of any such consolidation, merger, sale or transfer, such changes
in phraseology and form (but not in substance) may be made in the
Securities of any series thereafter to be issued as may be appropriate.
SECTION 9.3. Anything in this Article to the contrary notwithstanding, no
such consolidation, merger, sale or transfer shall be entered into or made
by the Company with or to another corporation which has outstanding any
obligations secured by mortgage if, as a result of such consolidation,
merger, sale or transfer, the property owned by the Company immediately
prior thereto would be subjected to the lien of such mortgage, unless
simultaneously therewith or prior thereto effective provision shall be made
for the securing of all of the Securities of any series equally and ratably
with (or prior to) all such obligations.
SECTION 9.4. The Trustee may receive and shall, subject to the provisions
of Section 10.1 of this Indenture, be fully protected in relying upon an
Opinion of Counsel or an Officers' Certificate as conclusive evidence that
any supplemental indenture executed under the foregoing Section 9.1
complies with the foregoing conditions and provisions of this Article.
ARTICLE X
CONCERNING THE TRUSTEE
SECTION 10.1. (a) The Trustee undertakes, prior to default and after the
curing of all defaults which may have occurred, to perform such duties and
only such duties as are specifically set forth in this Indenture, and in
case of default (but only during the continuance thereof) to exercise such
of the rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
The Trustee, upon receipt of any resolution, certificate, statement,
opinion, report, document, order or other instrument furnished to the
Trustee pursuant to any provision of this Indenture, shall examine them to
determine whether they conform to the requirements of this Indenture.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that:
(i) prior to default hereunder and after the curing of all defaults
which may have occurred, the Trustee shall not be liable except for
the performance of such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into
this Indenture against the Trustee but the duties and obligations of
the Trustee, prior to default and after the curing of all defaults
which may have occurred, shall be determined solely by the express
provisions of this Indenture;
(ii) prior to default hereunder and after the curing of all defaults
which may have occurred, and in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon certificates or opinions conforming to the requirements of this
Indenture;
(iii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iv) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in principal
amount of the Securities of any series then outstanding relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred
upon the Trustee, under this Indenture.
None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any personal financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there shall be reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(c) The Trustee shall not be responsible for the validity, sufficiency or
the execution by the Company of this Indenture, or of any indentures
supplemental hereto, or of the Securities of any series, or for the
recitals herein or in the Securities contained (such recitals being made
solely by the Company).
(d) Subject to the limitations contained in subdivisions (a) and (b) of
this Section 10.1:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, opinion,
notice, consent, request, order, appraisal, report, bond or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(ii) the Trustee may consult with counsel (who may be counsel to the
Company) and any advice or opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken,
omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel;
(iii) whenever in the administration of this Indenture, prior to a
default hereunder and after the curing of all defaults which may have
occurred, the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering any
action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by an Officers' Certificate
delivered to the Trustee, and such certificate shall be full warrant
to the Trustee for any action taken or suffered by it under the
provisions of this Indenture upon the faith thereof;
(iv) the Trustee shall be under no obligation to exercise any of the
trusts or powers hereof at the request, order or direction of any of
the Holders of Securities of any series, pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses
and liabilities to be incurred therein or thereby; and
(v) the Trustee shall not be liable for any action taken by it in good
faith and believed by it to be authorized or within the discretion or
power conferred upon it by this Indenture.
(e) Subject to the provisions of subdivision (b) of this Section 10.1,
prior to a default hereunder and after the curing of all defaults which may
have occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, opinion,
notice, consent, request, order, appraisal, report, bond or other document
or instrument unless requested in writing so to do by the Holders of not
less than a majority in principal amount of the Securities of any series
then outstanding; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it without negligence or bad faith in the making of such
investigation is, in the opinion of the Trustee (subject to the provisions
of subdivisions (a) and (b) of this Section 10.1), not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs,
expenses or liabilities as a condition to so proceeding; and provided
further, that nothing in this subdivision (e) shall require the Trustee to
give the Holders of such Securities any notice other than that required by
Section 10.3 hereof. The reasonable expense of every such examination shall
be paid by the Company or, if paid by the Trustee, shall be repaid by the
Company upon demand.
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 10.2. The Trustee shall be entitled to reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for services rendered by it
in the execution of the trusts hereby created, and shall also be entitled
to payment of all expenses and disbursements actually made or incurred
hereunder, which shall include the reasonable fees and expenses of counsel,
accountants and of all persons not regularly in its employ (except any such
expenses and disbursements as may arise from its negligence or bad faith),
and all taxes which may have been assessed against the Trustee as such on
any funds on deposit with the Trustee, and the Company agrees to pay the
same. The Company also agrees to indemnify the Trustee for and hold it
harmless against loss, liability or expense incurred without negligence or
bad faith on the part of the Trustee arising out of or in connection with
the acceptance or administration of this trust, including the costs and
expenses of defending against any claim of liability in the premises. The
Trustee shall have a first lien on all moneys coming into its possession
hereunder, for the payment to it of its compensation and for the repayment
to it of all expenses and disbursements payable by the Company hereunder.
The Trustee shall not be accountable for the use or application by the
Company of any Securities of any series authenticated and delivered
hereunder or of the proceeds of such Securities, or for the use or
application of any moneys paid over by the Trustee in accordance with any
provision of this Indenture, or for the use or application of any moneys
received by any paying agent.
All moneys received by the Trustee under or pursuant to any provision of
this Indenture shall constitute trust funds for the purposes for which they
were paid or are held, but need not be segregated in any manner from any
other moneys and may be deposited by the Trustee, under such conditions as
may be prescribed by law, in its general banking department, and the
Trustee shall not be liable for any interest thereon, except that, so long
as the Company is not in default hereunder, the Trustee will allow and
credit to the Company interest, if any, upon such moneys at such rate as
may then be customary for similar deposits.
SECTION 10.3. The Trustee shall give to the Holders of Securities of any
series notice, in the manner and to the extent provided in subdivision (c)
of Section 10.10, of the happening of all defaults known to it with respect
to Securities of such series, within 90 days after the occurrence thereof
unless such defaults shall have been cured before the giving of such
notice; but, except in the case of a default resulting from the failure to
make any payment of principal of, premium, if any, on or interest on the
Securities of such series the Trustee may withhold the giving of such
notice if and so long as the board of directors, the executive committee or
a trust committee of directors and/or Responsible Officers, of the Trustee
in good faith determines that the withholding of such notice is in the
interest of the Holders of Securities of such series. For the purposes of
this Section 10.3, the term ``default'' shall mean any default defined in
Section 6.1, irrespective of the giving of any specified notice and
excluding any periods of grace provided for therein.
SECTION 10.4. If the Trustee has or shall acquire any conflicting interest
as defined in this Section 10.4, with respect to the Securities of any
series it shall, within 90 days after ascertaining that it has such
conflicting interest, if the default (as defined in Section 10.3) to which
such conflicting interest relates has not been cured or duly waived or
otherwise eliminated before the end of such 90-day period, either eliminate
such conflicting interest or, except as otherwise provided below, resign
with respect to the Securities of that series, such resignation to become
effective upon the appointment of a successor trustee and such successor's
acceptance of such appointment, and the Company shall take prompt steps to
have a successor appointed in the manner provided in Section 10.6. Except
in the case of a default (as defined in Section 10.3) in the payment of
the principal of (or premium, if any) or interest on any such Security, or
in the payment of any sinking or purchase fund installment, the Trustee
shall not be required to resign as otherwise provided by this Section if
the Trustee shall have sustained the burden of proving, on application to
the Commission and after opportunity for hearing thereon, that (i) the
default (as defined in Section 10.3) may be cured or waived during a
reasonable period and under the procedures described in such application;
and (ii) a stay of the Trustee's duty to resign will not be inconsistent
with the interests of Holders of such Securities. The filing of such an
application shall automatically stay the performance of the duty to resign
until the Commission orders otherwise. For the purposes of this Section
10.4 the Trustee shall be deemed to have a conflicting interest with
respect to the Securities of any series if such Securities are in default
(as defined in Section 10.3) and:
(1) the Trustee is trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the Company are outstanding, unless such other
indenture is a collateral trust indenture under which the only
collateral consists of Securities issued and outstanding under this
Indenture, provided that there shall be excluded from the operation of
this paragraph (a) the Indenture dated as of November 15, 1991 between
the Company and The Bank of New York as trustee (and the series of
securities designated as the "Medium-Term Notes, Series VI" and (b)
any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the
Company are outstanding if (i) such other indenture or indentures (and
all series of securities issuable thereunder) are at the time wholly
unsecured and rank equally and such other indenture or indentures (and
such series) are hereafter qualified under the Trust Indenture Act of
1939, as amended, unless the Commission shall have found and declared
by order pursuant to Subsection (b) of Section 305 or Subsection (c)
of Section 307 of the Trust Indenture Act of 1939, as amended, that
differences exist between the provisions of this Indenture and the
provisions of such other indenture or indentures (or such series)
which are so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under this
Indenture and under such other indenture or indentures, or (ii) the
Company shall have sustained the burden of proving, on application to
the Commission and after opportunity for hearing thereon, that the
trusteeship under this Indenture and such other indenture is not so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture and
under such other indenture or indentures;
(2) the Trustee or any of its directors or executive officers is an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control
with an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of
the Company or of an underwriter (other than the Trustee itself) for
the Company who is currently engaged in the business of underwriting,
except that (A) one individual may be a director and/or an executive
officer of the Trustee and a director and/or an executive officer of
the Company, but may not be at the same time an executive officer of
both the Trustee and of the Company, and (B) if and so long as the
number of directors of the Trustee in office is more than nine, one
additional individual may be a director and/or an executive officer of
the Trustee and a director of the Company, and (C) the Trustee may be
designated by the Company or by any underwriter for the Company to act
in the capacity of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent, or depositary, or in any other similar
capacity, or, subject to the provisions of subdivision (1) of this
Section 10.4, to act as trustee, whether under an indenture or
otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner
or executive officer of the Company or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more of
such persons; or 10% or more of the voting securities of the Trustee
is beneficially owned either by an underwriter for the Company or by
any director, partner or executive officer of any such underwriter, or
is beneficially owned, collectively, by any two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default as hereinafter in this
Section 10.4 defined, (A) 5% or more of the voting securities or 10%
or more of any other class of security of the Company, not including
the Securities issued under this Indenture and the securities issued
under any other indenture of the Company under which the Trustee is
also trustee, or (B) 10% or more of any class of security of any
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default as hereinafter in this
Section 10.4 defined, 5% or more of any voting securities of any
person who, to the knowledge of the Trustee, owns 10% or more of the
voting securities of, or controls directly or indirectly or is under
direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default as hereinafter in this
Section 10.4 defined, 10% or more of any class of security of any
person who, to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Company;
(9) the Trustee owns, on the date of such default (as defined in
Section 10.3) or any anniversary of such default while such default
remains outstanding, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or
conservator, or in any other similar capacity, an aggregate of 25% or
more of the voting securities, or of any class of security, of any
person, the beneficial ownership of a specified percentage of which
would have constituted a conflicting interest under subdivisions (6),
(7), or (8) of this Section 10.4. As to any such securities of which
the Trustee acquired ownership through becoming executor,
administrator or testamentary trustee of an estate which included
them, the provisions of the preceding sentence shall not apply, for a
period of not more than two years from the date of such acquisition,
to the extent that such securities included in such estate do not
exceed 25% of such voting securities or 25% of any such class of
security. Promptly after the date of any such default and annually in
each succeeding year that the Securities of any series remain in
default, the Trustee shall make a check of its holdings of such
securities in any of the abovementioned capacities as of such dates.
If the Company fails to make payment in full of principal of, or
premium, if any, on and interest on any of the Securities issued under
this Indenture when and as the same becomes due and payable, and such
failure continues for 30 days thereafter, the Trustee shall make a
prompt check of its holdings of such securities in any of the
abovementioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this subdivision (9), all such securities so held by the
Trustee, with sole or joint control over such securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee, for the purposes of
subdivisions (6), (7), and (8) of this Section 10.4; or
(10) except under the circumstances described in paragraphs (1), (3),
(4), (5) or (6) of Section 10.9(b), the Trustee shall be or become a
creditor of the Company.
In determining whether the Trustee has a conflicting interest with respect
to any series of Securities under this Section 10.4, each other series of
Securities will be treated as having been issued under an indenture other
than this Indenture unless such series of Securities rank equally and are
wholly unsecured.
The specification of percentages in subdivisions (5) to (9), inclusive, of
this Section 10.4 shall not be construed as indicating that the ownership
of such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
subdivision (3) or (7) of this Section 10.4.
For the purposes of subdivisions (6), (7), (8), and (9) of this Section
10.4, (A) the term ``security'' and ``securities'' shall include only such
securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies, or banking firms, or any certificate of interest or
participation in any such note or evidence of indebtedness; (B) an
obligation shall be deemed to be in default when a default in payment of
principal shall have continued for 30 days or more, and shall not have been
cured; and (C) the Trustee shall not be deemed the owner or holder of (i)
any security which it holds as collateral security (as trustee or
otherwise) for an obligation which is not in default as defined in clause
(B) above, or (ii) any security which it holds as collateral security under
this Indenture, irrespective of any default hereunder, or (iii) any
security which it holds as agent for collection, or as a custodian, escrow
agent or depositary, or in any similar representative capacity.
Except as provided in the next preceding paragraph, the word ``security''
or ``securities'' as used in this Section 10.4 shall mean any note, stock,
treasury stock, bond, debenture, evidence of indebtedness, certificate of
interest or participation in any profit-sharing agreement, collateral trust
certificate, pre-organization certificate or subscription, transferable
share, investment contract, voting-trust certificate, certificate of
deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, or, in general, any interest or instrument commonly known
as a ``security'', or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the foregoing.
For the purposes of this Section 10.4:
(I) The term ``underwriter'' when used with reference to the Company
shall mean every person who, within one year prior to the time as of
which the determination is made, has purchased from the Company with a
view to, or has offered or sold for the Company in connection with,
the distribution of any security of the Company outstanding at such
time, or has participated or has had a direct or indirect
participation in any such undertaking, or has participated or has had
a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest
was limited to a commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers'
commission.
(II) The term ``director'' shall mean any director of a corporation or
any individual performing similar functions with respect to any
organization whether incorporated or unincorporated.
(III) The term ``person'' shall mean an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term ``trust'' shall include
only a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(IV) The term ``voting security'' shall mean any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement, or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person.
(V) The term ``Company'' shall mean any obligor upon the Securities.
(VI) The term ``executive officer'' shall mean the president, every
vice president, every trust officer, the cashier, the secretary, and
the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated but shall not include the chairman of
the board of directors.
The percentages of voting securities and other securities specified in this
Section 10.4 shall be calculated in accordance with the following
provisions:
(a) A specified percentage of the voting securities of a person means
such amount of the outstanding voting securities of such person as
entitles the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(b) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(c) The term ``amount'', when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number
of shares if relating to capital shares, and the number of units if
relating to any other kind of security.
(d) The term ``outstanding'' means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(1) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(2) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as
to principal or interest or otherwise;
(3) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or
interest or otherwise;
(4) securities held in escrow if placed in escrow by the issuer
thereof;
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(e) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges, provided, however, that,
in the case of secured evidences of indebtedness, all of which are
issued under a single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes, and provided,
further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not
be deemed sufficient to constitute them securities of different
classes, whether or not they are issued under a single indenture.
SECTION 10.5. There shall at all times be at least one corporate Trustee
under this Indenture which shall be a bank or trust company in good
standing, organized and doing business under the laws of the United States,
the State of Illinois or the State of New York, or a corporation or other
person permitted to act as trustee by the Commission, and having a combined
capital and surplus of not less than $20,000,000, which is authorized under
the laws of the jurisdiction of incorporation to exercise corporate trust
powers and is subject to supervision or examination by Federal or state
authority. No obligor upon the Securities or Affiliate of such obligor
shall serve as Trustee. If the Trustee or any successor publishes reports
of condition at least annually, pursuant to law or to the requirements of
the aforesaid supervising or examining authority, the combined capital and
surplus of the Trustee or of such successor Trustee shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If the Trustee shall at any time cease to satisfy
the foregoing qualifications, then the Trustee shall resign within 30 days
thereafter, such resignation to become effective upon the appointment of a
successor Trustee and such successor's acceptance of such appointment. If
the Trustee shall fail or refuse to resign within such 30-day period, or if
the Trustee has or shall acquire any conflicting interest of the character
specified in Section 10.4 with respect to the Securities of one or more
series and shall fail or refuse either to eliminate such conflicting
interest or to resign within the period in Section 10.4 provided in respect
of such resignation, then (i) the Trustee shall, within 10 days after the
expiration of such period, transmit notice of such failure or refusal to
the Holders of Securities of any such series in the manner and to the
extent provided in subdivision (c) of Section 10.10; and (ii) any Holder of
Securities of such series, who has been the bona fide Holder of a Security
of such series for at least six months, may, subject to the provisions of
the last paragraph of Section 6.7 hereof, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee, and the appointment of a successor, if the
Trustee fails, after written request therefor by such Holder of Securities
of such series, to comply with the provisions of Section 10.4.
SECTION 10.6. The Trustee may resign and be discharged from the trust
hereby created with respect to the Securities of one or more series by
giving notice thereof to the Company specifying the date when such
resignation shall take effect, and by giving notice thereof to the Holders
of Securities of such series, in the manner and to the extent provided in
subdivision (c) of Section 10.10. Except as otherwise provided in Sections
10.4 and 10.5, such resignation shall take effect on the date specified in
such notice unless previously a successor Trustee shall have been appointed
as hereinafter provided, in which event such resignation shall take effect
upon the appointment of such successor Trustee.
The Trustee may be removed at any time with respect to the Securities of
any series by an instrument or instruments in writing delivered to the
Trustee and to the Company signed by the Holders of a majority in principal
amount of the Securities of that series then outstanding or by their duly
authorized attorneys-in-fact.
In case the Trustee shall resign or be removed or otherwise shall become
incapable of acting as Trustee, with respect to the Securities of one or
more series, a successor Trustee may be appointed by the Holders of a
majority in principal amount of the Securities of any series then
outstanding by an instrument or instruments in writing filed with the
Company and with the Trustee and signed by such Holders or by their duly
authorized attorneys-in-fact, or, in the case of the removal of the Trustee
pursuant to the provisions of Section 10.5, by any court of competent
jurisdiction acting pursuant to the provisions of Section 10.5; but until a
new trustee shall be appointed by the Holders of Securities of that series
or a court of competent jurisdiction as herein authorized, the Company, by
an instrument executed by order of its Board, shall appoint a Trustee to
fill the vacancy. Every such successor Trustee so appointed by the Holders
of Securities of that series, by a court of competent jurisdiction or by
the Company, shall be a bank or trust company meeting the requirements
provided in Section 10.5.
If in a proper case no appointment of a successor Trustee with respect to
the Securities of any series shall be made pursuant to the foregoing
provisions of this Article within six months after a vacancy shall have
occurred in the office of Trustee, the Holder of any Security of that
series or any retiring Trustee may apply to any court of competent
jurisdiction to appoint a successor Trustee. The court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a
successor Trustee.
SECTION 10.7. (a) Any successor Trustee appointed under any of the methods
herein provided with respect to all Securities shall execute, acknowledge
and deliver to its predecessor Trustee and to the Company an instrument in
writing accepting such appointment hereunder and thereupon such successor
Trustee, without any further act, deed or conveyance, shall become fully
vested with the rights, powers, trusts, duties and obligations of its
predecessor in the trust hereunder with like effect as if originally named
as Trustee hereunder. The predecessor Trustee shall, nevertheless, at the
written request of the successor Trustee, pay over to the successor Trustee
all moneys at the time held by it hereunder; and the Company and the
predecessor Trustee, upon payment or provision therefor of any amounts then
due the predecessor Trustee pursuant to the provisions of Section 10.2,
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming
in the successor Trustee all such rights, powers, trusts, duties and
obligations. The Company shall promptly give notice of the appointment of
such successor Trustee to the Holders of all Securities in the manner and
to the extent provided in subdivision (c) of Section 10.10.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series under any of
the methods herein provided, the Company, the predecessor Trustee and each
successor Trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain
such provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor Trustee all the rights, powers, trusts
and duties of the predecessor Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates, (2) if the predecessor Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Securities of that or those series
as to which the predecessor Trustee is not retiring shall continue to be
vested in the predecessor Trustee, and (3) shall add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any
other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the predecessor
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request
of the Company or any successor Trustee, such predecessor Trustee shall
duly assign, transfer and deliver to such successor Trustee all property
and money held by such predecessor Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates. The Company shall promptly give notice of the
appointment of such successor Trustee with respect to one or more (but not
all) series of Securities to the Holders of such series in the manner and
to the extent provided in subdivision (c) of Section 10.10.
SECTION 10.8. Any corporation into which the Trustee or any successor to
it in the trust created by this Indenture may be merged or converted, or
with which it or any successor to it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
the Trustee or any successor to it shall be a party, shall be the successor
Trustee under this Indenture without the execution or filing of any
instruments or any further act on the part of any of the parties hereto.
SECTION 10.9. (a) Subject to the provisions of subdivision (b) of this
Section 10.9, if the Trustee, in its individual capacity, shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the
Company or of any other obligor upon the Securities of any series (other
than a relationship of the nature specified in subdivision (b) of this
Section 10.9) within three months prior to a default (as defined in
subdivision (c) of this Section 10.9) or subsequent to such a default,
then, unless and until such default shall be cured, the Trustee shall set
apart and hold in a special account for the benefit of the Trustee
individually, the Holders of the Securities and the holders of other
indenture securities (as defined in subdivision (c) of this Section 10.9):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three months' period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subdivision, or from the
exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against the
Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three
months' period, or an amount equal to the proceeds of any such
property, if disposed of, subject, however, to the rights, if any, of
the Company and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third person, and (iii) distributions made in
cash, securities or other property in respect of claims filed against
the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal bankruptcy laws or applicable
state law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three months' period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of
such three months' period and such property was received as security
therefor simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such property was
so received the Trustee had no reasonable cause to believe that a
default as defined in subdivision (c) of this Section 10.9 would occur
within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three months' period for property held as security at
the time of such substitution shall, to the extent of fair value of the
property released, have the same status as the property released, and, to
the extent that any claim referred to in any of such paragraphs is created
in renewal of or in substitution for or for the purpose of repaying or
refunding any pre-existing claim of the Trustee as such creditor, such
claim shall have the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between
the Trustee, the Holders of Securities of any series and the holders of
other indenture securities in such manner that the Trustee, the Holders of
Securities of any series and the holders of other indenture securities
realize, as a result of payments from such special account and payments of
dividends on claims filed against the Company in bankruptcy or receivership
or in proceedings for reorganization pursuant to the Federal bankruptcy
laws or applicable state law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on
account of the receipt by it from the Company of the funds and property in
such special account and before crediting to the respective claims of the
Trustee, the Holders of Securities of any series and the holders of other
indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal bankruptcy laws or applicable state law, but after crediting
thereon receipts on account of the indebtedness represented by their
respective claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term ``dividends'' shall include
any distribution with respect to such claim, in bankruptcy or receivership
or in proceedings for reorganization pursuant to the Federal bankruptcy
laws or applicable state law, whether such distribution is made in cash,
securities, or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in
which such bankruptcy, receivership or proceeding for reorganization is
pending shall have jurisdiction (i) to apportion between the Trustee, the
Holders of Securities of any series, and the holders of other indenture
securities, in accordance with the provisions of this paragraph, the funds
and property held in such special account and the proceeds thereof, or (ii)
in lieu of such apportionment, in whole or in part, to give to the
provisions of this paragraph due consideration in determining the fairness
of the distributions to be made to the Trustee, the Holders of Securities
of any series, and the holders of other indenture securities, with respect
to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held
in such special account or as security for any such claim, or to make a
specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of
this paragraph as a mathematical formula.
Any trustee who has resigned or been removed after the beginning of such
three months' period shall be subject to the provisions of this subsection
as though such resignation or removal had not occurred. If any trustee has
resigned or been removed prior to the beginning of such three months'
period, it shall be subject to the provisions of this subdivision if and
only if the following conditions exist-
(i) the receipt of property or reduction of claim which would have
given rise to the obligation to account, if such Trustee had continued
as Trustee, occurred after the beginning of such three months' period;
and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of subdivision (a) of this
Section 10.9 a creditor relationship arising from-
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee; and for the
purposes of this clause the term ``security'' shall mean any note,
bond, debenture, evidence of indebtedness, certificate of interest or
participation in any profit-sharing agreement, collateral-trust
certificate, investment contract, certificate of deposit for a
security, or, in general, any interest or instrument commonly known as
a ``security'' or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, or guaranty of, any
of the foregoing;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advance and of the
circumstances surrounding the making thereof is given to the Holders
of Securities of any series as provided in Section 10.10 with respect
to advances by the Trustee as such;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subdivision (c) of
this Section 10.9;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper as defined in
subdivision (c) of this Section 10.9.
(c) As used in this Section 10.9:
(1) the term ``default'' shall mean any failure to make payment in
full of the principal of (or premium, if any, on) or interest on any
of the Securities or upon the other indenture securities when and as
such principal, premium, if any, or interest becomes due and payable;
(2) the term ``other indenture securities'' shall mean securities upon
which the Company is an obligor (as defined in the Trust Indenture Act
of 1939, as amended) outstanding under any other indenture (A) under
which the Trustee is also trustee, (B) which contains provisions
substantially similar to the provisions of subdivision (a) of this
Section 10.9, and (C) under which a default exists at the time of the
apportionment of the funds and property held in said special account;
(3) the term ``cash transaction'' shall mean any transaction in which
full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(4) the term ``self-liquidating paper'' shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacture, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation
of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation; and
(5) the term ``Company'' shall mean any obligor upon the Securities at
the time in question.
SECTION 10.10. (a) The Trustee shall, so long as any Securities of any
series are outstanding hereunder, transmit to the Holders, as hereinafter
provided, within 60 days after May 15 of each year beginning with the year
, a brief report as of such May 15 with respect to any of the following
events which may have occurred within the previous twelve months (but if no
such event has occurred within such period no report need be transmitted)-
(1) any change to the eligibility under Section 10.5 and qualification
under Section 10.4 of the Trustee to serve as Trustee under this
Indenture;
(2) the creation of or any material change to a relationship specified
in subsections (1) through (10) of the first paragraph of Section 10.4
hereof;
(3) the character and amount of any advances (and if the Trustee
elects so to state the circumstances surrounding the making thereof)
made by it as Trustee which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Securities, on property or funds held or
collected by it as a Trustee, except that the Trustee shall not be
required (but may elect) to state such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal
amount of the Securities outstanding on such date;
(4) the amount, interest rate and maturity date of all other
indebtedness owing to it in its individual capacity, on the date of
such report, by the Company or any other obligor under this Indenture,
with a brief description of any property held as collateral security
therefor, except an indebtedness based upon a creditor relationship
arising in any manner described in paragraph (2), (3), (4) or (6) of
subdivision (b) of Section 10.9;
(5) any change to the property and funds physically in the possession
of the Trustee in such capacity on the date of such report;
(6) any additional issue of Securities which it has not previously
reported; and
(7) any action taken by the Trustee in the performance of its duties
under this Indenture which it has not previously reported and which in
the opinion of the Trustee materially affects the Securities, except
action in respect of a default, notice of which has been or is to be
withheld by the Trustee in accordance with Section 10.3.
(b) The Trustee shall, so long as any Securities of any series shall be
outstanding hereunder, also transmit to the Holders, as hereinafter
provided, within the times hereinafter specified, a brief report with
respect to the character and amount of any advances (and if the Trustee
elects so to state the circumstances surrounding the making thereof) made
by the Trustee, as such, since the date of the last report transmitted
pursuant to the provisions of subdivision (a) of this Section 10.10 (or if
no such report has been so transmitted, since the date of the execution of
this Indenture), for the reimbursement of which it claims or may claim a
lien or charge prior to that of the Securities, on property or funds held
or collected by the Trustee, as such, and which it has not previously
reported pursuant to this paragraph, if such advances remaining unpaid at
any time aggregate more than 10% of the principal amount of Securities
outstanding at such time, such report to be so transmitted within 90 days
after such time.
(c) All reports required by this Section 10.10, and all other reports or
notices which are required by any other provision of this Indenture to be
transmitted in accordance with the provisions of this Section, shall be
transmitted by mail, first class postage pre-paid to all Holders, as the
names and addresses of such holders appear upon the Security Register.
The Trustee shall, at the time of the transmission to the Holders of any
report or notice pursuant to this Section 10.10, file a copy thereof with
each stock exchange, if any, upon which the Securities are listed and with
the Commission. The Company will notify the Trustee when Securities are
listed on a stock exchange.
SECTION 10.11. The Trustee shall preserve, in as current a form as is
reasonably practicable, all information furnished it pursuant to
subdivision (d) of Section 3.6 hereof, or received by it as paying agent
hereunder. The Trustee may destroy (1) any information so furnished to it
by the Company upon receipt of new information from the Company, (2) any
information received by it as a paying agent, by delivering to itself, as
Trustee, not earlier than 45 days after an interest payment date on the
Securities, a list containing the names and addresses of the Holders of
Securities obtained from such information since the delivery of the last
previous list, if any, and (3) any list delivered to itself, as Trustee,
which was compiled from information received by it as paying agent upon the
receipt of a new list so delivered.
Within five business days after receipt by the Trustee of a written
application by any three or more Holders of Securities stating that the
applicants desire to communicate with other Holders with respect to their
rights under this Indenture or under the Securities, and accompanied by a
copy of the form of proxy or other communication which such applicants
proposed to transmit, and by reasonable proof that each such applicant has
owned a Security or Securities for a period of at least six months
preceding such application, the Trustee shall, at its election, either (1)
afford to such applicants access to all information so furnished to or
received by the Trustee and not destroyed pursuant to the provisions of
this Section 10.11, or (2) inform such applicants as to the approximate
number of Holders according to the most recent information so furnished to
or received by the Trustee, and as to the approximate cost of mailing to
the Holders the form of proxy or other communication, if any, specified in
such application. If the Trustee shall elect not to afford to such
applicants access to such information, the Trustee shall, upon the written
request of such applicants, mail to all Holders whose names and addresses
are contained in the then current information filed with the Trustee as
aforesaid, copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and the payment, or provision for the
payment, of the reasonable expenses of such mailing, unless within five
days after such tender, the Trustee shall mail to such applicants, and file
with the Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee, such
mailing would be contrary to the best interest of the Holders or would be
in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after granting opportunity for a
hearing upon the objections specified in said written statement and on
notice to the Trustee, shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of
such objections, the Commission shall find, after notice and opportunity
for a hearing, that all objections sustained have been met and shall enter
an order so declaring, the Trustee shall comply with such determination
with reasonable promptness after such determination and the renewal of the
aforesaid tender; otherwise the Trustee shall be relieved of any obligation
or duty to such applicants respecting their application.
Neither the Company nor the Trustee nor any Authenticating Agent nor any
paying agent nor any Security registrar shall be liable or accountable to
the Company or to any Holder by reason of disclosure of any such
information as to the names and addresses of Holders in accordance with the
provisions of this Section 10.11, regardless of the source from which such
information was derived, nor by reason of the mailing of any material
pursuant to a request made under this Section 10.11.
SECTION 10.12. The Trustee or any Authenticating Agent or any paying agent
or Security registrar in its individual or any other capacity may buy, own,
hold and sell any of the Securities or any other evidences of indebtedness
or other securities, whether heretofore or hereafter created or issued, of
the Company or any Subsidiary or Affiliate of the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, paying
agent or Security registrar; and any Authenticating Agent and, subject to
the provisions of this Article X, the Trustee may engage or be interested
in any financial or other transaction with the Company or any Subsidiary or
Affiliate, including, without limitation, secured and unsecured loans to
the Company or any Subsidiary or Affiliate, and may maintain any and all
other general banking and business relations with the Company and any
Subsidiary or Affiliate, and may act as trustee under an indenture with
respect to indebtedness thereof, with like effect and in the same manner
and to the same extent as if the Trustee were not a party to this
Indenture; and no implied covenant shall be read into this Indenture
against the Trustee in respect of any such matters.
SECTION 10.13. The Trustee may comply in good faith with any rule,
regulation or order of the Commission made pursuant to the terms and
provisions of the Trust Indenture Act of 1939, as amended, and shall be
fully protected in so doing notwithstanding that such rule, regulation or
order may thereafter be amended or rescinded or determined by judicial or
other authority to be invalid for any reason, but nothing herein contained
shall require the Trustee to take any action or omit to take any action in
accordance with such rule, regulation or order, except as otherwise
required by subdivisions (a) and (b) of Section 10.1.
SECTION 10.14. At any time when any of the Securities remain outstanding
there may be an Authenticating Agent with respect to one or more series of
Securities appointed by the Trustee to act on its behalf and subject to its
direction in connection with the authentication of the Securities of such
series as set forth in Articles III, IV, V, IX and XI. Such Authenticating
Agent shall be acceptable to the Company and shall at all times be a
corporation organized and doing business under the laws of the United
States or of any State or Territory or of the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $20,000,000, and being
subject to supervision or examination by Federal, State, Territorial, or
District of Columbia authority and (if there be such a corporation willing
and able to act as Authenticating Agent on reasonable and customary terms)
having its principal office and place of business in the City of Chicago,
the Commonwealth of Massachusetts or the Borough of Manhattan in The City
of New York. If such corporation publishes reports of conditions at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section
10.14 the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which any
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent without the execution or filing of any paper or
any further act on the part of the Trustee or such Authenticating Agent.
Any Authenticating Agent with respect to one or more series of Securities
may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination
to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 10.14, the Trustee may appoint a successor
Authenticating Agent with respect to any series of Securities which shall
be acceptable to the Company, shall give written notice of such appointment
to the Company, and the Company shall mail notice of such appointment to
all Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as the names and addresses of such Holders
appear upon the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers, duties and responsibilities of its predecessor hereunder,
with like effect as if originally named as Authenticating Agent herein. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 10.14.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services, and the Trustee shall be entitled
to be reimbursed for such payments subject to the provisions of Section
10.2. An Authenticating Agent shall have no responsibility or liability for
any action taken by it as such at the direction of the Trustee.
If an appointment is made pursuant to this Section, the Securities shall
have endorsed thereon, in addition to the Trustee's Certificate, an
Authenticating Agent's Certificate in the following form:
This is one of the Securities of the series designated and referred to in
the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By
as Authenticating Agent
By
Authorized Signatory
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1. The Company, when authorized by resolution of its Board, and
the Trustee, subject to the conditions and restrictions in this Indenture
contained, may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of
the Trust Indenture Act of 1939 as then in effect) for one or more of the
following purposes:
(a) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the
Company pursuant to Article IX;
(b) to add to the covenants and agreements of the Company for the
benefit of the Holders of all or any series of Securities (and if such
covenants and agreements are for the benefit of less than all series
of Securities, stating that such covenants and agreements are
expressly being included solely for the benefit of such series), and
to surrender any right or power herein reserved to or conferred upon
the Company;
(c) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the issuance
of Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons;
(d) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination (i) shall become
effective only when there is no Security outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision or (ii) shall not apply to
any such outstanding Security;
(e) to establish the form or terms of Securities of any series as
permitted by Section 2.1;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 10.7(b);
(g) to cure any ambiguity or to correct or supplement any defective or
inconsistent provision contained in this Indenture or in any
supplemental indenture; or
(h) to make such provisions with respect to matters or questions
arising under this Indenture as may be necessary or desirable and not
inconsistent with this Indenture.
The Trustee is hereby authorized to join with the Company in the execution
of any supplemental indenture authorized or permitted by the terms of this
Indenture, to make any further appropriate agreements and stipulations
which may be therein contained, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without consent of the
Holders of any of the Securities at the time outstanding, notwithstanding
any of the provisions of Section 11.2.
SECTION 11.2. With the consent (evidenced as provided in Section 7.1) of
the Holders (or persons entitled to vote, or to give consents respecting
the same) of not less than a majority in principal amount of the
outstanding Securities of each series affected by such supplemental
indenture, the Company, when authorized by a resolution of its Board, and
the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto (which shall conform to the provisions of
the Trust Indenture Act of 1939 as then in effect) for the purpose of
adding any provisions to or modifying or altering in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying or altering in any manner the rights and
obligations of the Holders of such Securities and of the Company; provided,
however, that no such supplemental indenture shall (i) change the Stated
Maturity of the principal of (premium, if any, on), or the interest on, any
Security, or reduce the principal amount of (premium, if any, on), or the
rate of interest on any Security, or change the Currency in which the
principal of (and premium, if any) or interest on such Securities is
denominated or payable, or reduce the amount of the principal of an
Original Issue Discount Security that would be payable upon a declaration
of acceleration of the Maturity thereof pursuant to Section 6.1 without the
consent of the Holder of each outstanding Security so affected, or (ii)
reduce the aforesaid percentage of Securities of any series the Holders of
which are required to consent to any such supplemental indenture, without
the consent of the Holders of each outstanding Security affected thereby.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of any other
series.
Upon the request of the Company accompanied by a Certified Resolution
authorizing the execution of any such supplemental indenture and upon the
filing with the Trustee of evidence of the consent of Holders of Securities
affected thereby as aforesaid, the Trustee shall join with the Company in
the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion,
but shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Holders under this Section
11.2 to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance
thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 11.2 the
Company shall mail, first class postage prepaid, to the Holders of the
Securities affected thereby at their last addresses as they shall appear
upon the Security Register, a notice, setting forth in general terms the
substance of such supplemental indenture. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 11.3. Upon the execution of any supplemental indenture pursuant to
the provisions of this Article XI, or of Section 9.1, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and
immunities under this Indenture of the Trustee, the Company and the Holders
of Securities affected thereby shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
SECTION 11.4. Securities of any series authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of
this Article XI, or after any action taken at a Holders' meeting pursuant
to Article XII, may bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture or as to any action
taken at any such meeting; and in such case, suitable notation may be made
upon outstanding Securities affected thereby after proper presentation and
demand. If the Company shall so determine, Securities of any series so
modified as to conform, in the opinion of the Trustee and the Board, to any
modification or alteration of this Indenture contained in any such
supplemental indenture, or to any action taken at any such meeting, may be
prepared by the Company, authenticated by the Trustee or an Authenticating
Agent on its behalf and delivered in exchange for outstanding Securities of
such series upon demand of and without cost to, the Holders thereof, upon
surrender of such Securities.
SECTION 11.5. The Trustee may receive and shall, subject to the provisions
of Section 10.1, be fully protected in relying upon an Opinion of Counsel
as conclusive evidence that any supplemental indenture executed pursuant to
this Article XI is authorized or permitted by the terms of this Indenture
and that it is not inconsistent therewith.
SECTION 11.6. Nothing in this Article contained shall affect or limit the
right or obligation of the Company to execute and deliver to the Trustee
any instrument of further assurance or other instrument which elsewhere in
this Indenture it is provided shall be delivered to the Trustee.
ARTICLE XII
MEETINGS OF HOLDERS
SECTION 12.1. A meeting of Holders of any series of Securities may be
called at any time and from time to time pursuant to the provisions of this
Article XII for any of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to give
any direction to the Trustee or to waive or consent to the waiving of
any default hereunder and its consequences, or to take any other
action authorized to be taken by such Holders pursuant to any of the
provisions of Article VI;
(2) to remove the Trustee or appoint a successor trustee pursuant to
the provisions of Article X;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.2; or
(4) to take any other action authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the
Securities of that series under any other provision of this Indenture,
or authorized or permitted by law.
SECTION 12.2. The Trustee may at any time call a meeting of Holders of
Securities of any series to take any action specified in Section 12.1, to
be held at such time and at such place in any of the city in which the
principal executive offices of the Company are located, the city in which
the principal corporate trust office of the Trustee is located, the
Commonwealth of Massachusetts, the City of Chicago or the Borough of
Manhattan of The City of New York, as the Trustee shall determine. Notice
of every meeting of such Holders, setting forth the time and place of such
meeting and in general terms the action proposed to be taken at such
meeting, shall be mailed by the Trustee, first class postage prepaid, to
the Company, and to the Holders of Securities of that series at their last
addresses as they shall appear upon the Security Register, not less than 20
nor more than 60 days prior to the date fixed for the meeting.
Any meeting of the Holders of Securities of any series shall be valid
without notice if the Holders of all Securities of that series then
outstanding are present in person or by proxy, or if notice is waived
before or after the meeting by the Holders of all outstanding Securities of
that series, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived
notice.
SECTION 12.3. In case at any time the Company, pursuant to resolution of
its Board, or Holders of not less than 20% in aggregate principal amount of
the Securities of any series then outstanding, shall have requested the
Trustee to call a meeting of Holders of Securities of that series to take
any action specified in Section 12.1, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days
after receipt of such request, then the Company or such Holders in the
amount above specified may determine the time and the place in any of the
city in which the principal executive offices of the Company are located,
the city in which the principal corporate trust office of the Trustee is
located, the City of Chicago or the Borough of Manhattan of The City of New
York, for such meeting and may call such meeting for the purpose of taking
such action, by mailing or causing to be mailed notice thereof as provided
in Section 12.2.
SECTION 12.4. To be entitled to vote at any meeting of Holders of
Securities of any series a person shall (a) be a registered Holder of one
or more Securities of that series, or (b) be a person appointed by an
instrument in writing as proxy for the registered Holder or Holders of
Securities of that series. The only persons who shall be entitled to be
present or to speak at any meeting of Holders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the
Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 12.5. Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities of any series, in regard to proof of
the holding of Securities of that series and of the appointment of proxies,
and in regard to the appointment and duties of inspectors of votes, and
submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the
meeting as it shall think fit. Unless otherwise determined by the Company
pursuant to Section 7.1, such regulations may fix a record date and time
for purposes of determining the registered Holders of any series of
Securities entitled to vote at such meeting, which record date shall be (i)
the later of 30 days prior to the first solicitation of the vote at such
meeting or the date of the most recent list of Holders furnished to the
Trustee prior to such solicitation pursuant to Section 3.6(d) hereof or
(ii) such other date determined by the Trustee. If the Trustee sets such a
record date only those persons who are registered Holders of such
Securities at the record date and time so fixed shall be entitled to vote
at such meeting whether or not they shall be such Holders at the time of
the meeting. Such regulations may further provide that written instruments
appointing proxies, regular on their face, may be presumed valid and
genuine without the proof specified in Section 7.2 or other proof. Except
as otherwise permitted or required by any such regulations, the holding of
such Securities shall be proved in the manner specified in Section 7.2 and
the appointment of any proxy shall be proved in the manner specified in
Section 7.2 or by having the signature of the person executing the proxy
witnessed or guaranteed by any bank, banker or trust company satisfactory
to the Trustee.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities of any series as provided in Section
12.3, in which case the Company or such Holders calling the meeting, as the
case may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by vote
of the Holders of a majority in principal amount of the Securities of that
series represented at the meeting and entitled to vote.
Subject to the provisions of Section 7.4, at any meeting each Holder of
Securities of any series or proxy shall be entitled to one vote for each
$1,000 principal amount at Stated Maturity (or the Dollar equivalent
thereof based upon the Market Exchange Rate on the latest date for which
such rate was established on or before the date for determining the Holders
entitled to perform such act, if the principal amount of any Securities of
any series is denominated in any Foreign Currency) of Securities of that
series, provided, however, that no vote shall be cast or counted at any
meeting in respect of any Securities of that series challenged as not
outstanding and ruled by the chairman of the meeting to be not outstanding.
The chairman of the meeting shall have no right to vote other than by
virtue of Securities of that series held by him or instruments in writing
as aforesaid duly designating him as the person to vote on behalf of other
such Holders. At any meeting of Holders of Securities of that series, the
presence of persons holding or representing any number of such Securities
shall be sufficient for a quorum. Any meeting of such Holders duly called
pursuant to the provisions of Section 12.2 or 12.3 may be adjourned from
time to time by vote of the Holders of a majority in principal amount of
the Securities of that series represented at the meeting and entitled to
vote, and the meeting may be held as so adjourned without further notice.
SECTION 12.6. The vote upon any resolution submitted to any meeting of
Holders of Securities of any series shall be by written ballots on which
shall be subscribed the signatures of the Holders of Securities of that
series or of their representatives by proxy and the principal amount of the
Securities of that series voted by the ballot. The permanent chairman of
the meeting shall appoint two inspectors of votes, who shall count all
votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports
in duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Holders shall be prepared by the secretary
of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts, setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 12.2. The record shall be signed and verified
by the affidavits of the permanent chairman and secretary of the meeting
and one of the duplicates shall be delivered to the Company and the other
to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 12.7. Nothing in this Article XII contained shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of
Holders of Securities of any series or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee
or to the Holders of Securities of that series under any of the provisions
of this Indenture or of such Securities.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
OR CERTAIN OBLIGATIONS
SECTION 13.1. If (a) the Company shall deliver to the Trustee for
cancellation all Securities theretofore authenticated (other than any
Securities which shall have been destroyed, lost or stolen and in lieu of
or in substitution for which other Securities shall have been authenticated
and delivered) and not theretofore cancelled, or (b) all the Securities not
theretofore cancelled or delivered to the Trustee for cancellation shall
have become due and payable, or are by their terms to become due and
payable at their Stated Maturity within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with
the Trustee as trust funds the entire amount sufficient to pay at Stated
Maturity or upon redemption all of the Securities (other than any
Securities which shall have been destroyed, lost or stolen and in lieu of
or in substitution for which other Securities shall have been authenticated
and delivered) not theretofore cancelled or delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or
to become due to such date of Stated Maturity or Redemption Date, as the
case may be, but, excluding, however, the amount of any moneys for the
payment of principal of (and premium, if any, on) or interest on the
Securities theretofore deposited with the Trustee and (1) repaid by the
Trustee to the Company in accordance with the provisions of Section 13.3,
or (2) paid by the Trustee to any State pursuant to its unclaimed property
or similar laws, and if in either case the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company, then this
Indenture shall cease to be of further effect, and the Trustee, on demand
of the Company accompanied by an Officers' Certificate and an Opinion of
Counsel, each stating that in the opinion of the signers all conditions
precedent to the satisfaction and discharge of this Indenture have been
complied with, and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging this
Indenture. The Company agrees to reimburse the Trustee for any costs or
expenses thereafter reasonably and properly incurred by the Trustee in
connection with the Indenture or the Securities, and any such obligation
for reimbursement shall survive this Indenture.
SECTION 13.2. Any moneys, U.S. Government Obligations, and Eligible
Obligations which at any time shall be deposited by the Company or on its
behalf with the Trustee or any paying agent (other than the Company) for
the purpose of paying or redeeming any of the Securities shall be held in
trust and applied by the Trustee to the payment, to the Holders of the
particular Securities for the payment or redemption of which such moneys
have been deposited, of all sums due and to become due thereon for
principal (and premium, if any) and interest, or analogous payments as
contemplated by Section 13.4, upon presentation and surrender of such
Securities at the office of the Trustee or any paying agent, all subject,
however, to the provisions hereinafter contained in this Article XIII.
Neither the Company nor the Trustee (except as provided in Section 10.2)
nor any paying agent shall be required to pay interest on any moneys so
deposited.
The Company shall pay and shall indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against U.S. Government Obligations
or Eligible Obligations deposited pursuant to Section 13.4 or the interest
and principal received in respect of such obligations other than any
payable by or on behalf of Holders.
The Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money, U.S. Government Obligations, or Eligible
Obligations held by it as provided in Section 13.4 which, in the opinion of
any independent firm of public accountants of recognized standing selected
by the Board expressed in a written certification thereof delivered to the
Trustee, are then in excess of the amount thereof which then would have
been required to be deposited for the purpose for which such money, U.S.
Government Obligations, or Eligible Obligations were deposited or received.
SECTION 13.3. Any moneys deposited with the Trustee or any paying agent
remaining unclaimed by the Holders of Securities for three years after the
date upon which the principal of (premium if any, on) or interest on such
Securities shall have become due and payable, shall be repaid to the
Company by the Trustee or such paying agent, upon demand, and such Holders
shall thereafter be entitled to look only to the Company for payment
thereof; provided, however, that, before being required to make any such
payment to the Company, the Trustee may, at the expense of the Company,
cause to be mailed to the Holders of such Securities, at their last
addresses as they appear on the Security Register, notice that such moneys
remain unclaimed and that, after a date named in said notice, the balance
of such moneys then unclaimed will be returned to the Company.
Upon the satisfaction and discharge of this Indenture as to the Securities
of any series, all moneys then held by any paying agent other than the
Trustee hereunder shall, upon demand of the Company, be repaid to it and
thereupon such paying agent shall be released from all further liability
with respect to such moneys.
SECTION 13.4. Except as otherwise provided in this Section 13.4 or
pursuant to Section 2.1, the Company may terminate its obligations as to
the Securities of any series if:
(a) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities which have
been replaced or Securities which are paid pursuant to Section 3.1 or
Securities for whose payment money or securities have theretofore been
held in trust and thereafter repaid to the Company, as provided in
Sections 13.2 and 13.3) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it
hereunder; or
(b) (1) the Company has irrevocably deposited or caused to be
deposited with the Trustee or a paying agent (and conveyed all right,
title and interest for the benefit of the Holders, under the terms of
an irrevocable trust agreement in form and substance satisfactory to
the Trustee, as trust funds in trust solely for the benefit of the
Holders for that purpose), (A) money in an amount sufficient, or (B)
U.S. Government Obligations (if the Securities of the series are
denominated in Dollars) or Eligible Obligations (if the Securities of
the series are denominated in a Foreign Currency) maturing as to
principal and interest in such amounts and at such times as are
sufficient in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee (without consideration of any
reinvestment of such interest), or (C) a combination thereof in an
amount sufficient, to pay principal (and premium, if any) and interest
on the outstanding Securities of such series on the dates such
installments are due to redemption or maturity, and any mandatory
sinking fund payments or analogous payments applicable to such
outstanding Securities;
(2) such deposit as described in this Section 13.4 will not result in
a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound;
(3) no defaults as defined in Section 6.1 shall have occurred and be
continuing on the date of such deposit, and no default under Section
6.1(e) or 6.1(f) shall have occurred and be continuing on the 91st day
after such date;
(4) the Company shall have delivered to the Trustee (i) either (A) a
ruling received from the Internal Revenue Service to the effect that
the Holders of the Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of
the Company's exercise of its option under this Section 13.4 and will
be subject to Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such
option had not been exercised, or (B) an Opinion of Counsel by
recognized counsel who is not an employee of the Company to the same
effect as the ruling described in clause (A) and (ii) an Opinion of
Counsel to the effect that, after the passage of 90 days following the
deposit, (x) the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally, or (y) if a court was to rule
under any such law in any case or proceeding that the trust funds
remained property of the Company (AA) assuming such trust funds
remained in the Trustee's possession prior to such court ruling to the
extent not paid to Holders of Securities of such series, the Trustee
will hold, for the benefit of the Holders of such Securities, a valid
and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise, and (BB) the Holders of
Securities will be entitled to receive adequate protection of their
interests in such trust funds if such trust funds are used;
(5) the Company has paid or caused to be paid all sums then payable by
the Company hereunder and under such Securities; and
(6) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture with respect to Securities of such series have been complied
with.
Notwithstanding the foregoing Clause (b), prior to the end of the 90-day
period referred to in subclause (b)(4)(ii) above, none of the Company's
obligations under this Indenture shall be discharged, and subsequent to the
end of such 90-day period only the Company's obligations in Sections 2.5,
2.6, 3.1, 3.2, 10.2 and 13.2 shall survive until the Securities of such
series are no longer outstanding. If and when a ruling from the Internal
Revenue Service or Opinion of Counsel referred to in subclause (b)(4)(i)
above is able to be provided specifically without regard to, and not in
reliance upon, the continuance of the Company's obligations under Section
3.1, then the Company's obligations under such Section 3.1 shall cease upon
delivery to the Trustee of such ruling or Opinion of Counsel and compliance
with the other conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture with respect to Securities of
such series.
After any such irrevocable deposit the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities of such series and this Indenture with respect to such
Securities except for those surviving obligations specified above.
SECTION 13.5. The Trustee or a paying agent (other than the Company) shall
hold, in trust, the money, U.S. Government Obligations or Eligible
Obligations deposited with it pursuant to Section 13.4 hereof. The Trustee
or paying agent shall have been irrevocably instructed to apply the
deposited money and the proceeds from the U.S. Government Obligations or
Eligible Obligations in accordance with the terms of this Indenture and the
terms of the Securities of the series to the payment of principal (and
premium, if any) and interest on such Securities.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.1. Nothing in this Indenture, expressed or implied, is intended
or shall be construed to confer upon, or to give to, any person or
corporation, other than the parties hereto, their successors and assigns,
and the Holders of the Securities of any series, any right, remedy or claim
under or by reason of this Indenture or any provisions hereof; and the
provisions of this Indenture are for the exclusive benefit of the parties
hereto, their successors and assigns, any Authenticating Agent or paying
agent and the Holders of the Securities of any series.
SECTION 14.2. Unless otherwise specifically provided, the certificate or
opinion of any independent firm of public accountants of recognized
standing selected by the Board shall be conclusive evidence of the
correctness of any computation made under the provisions of this Indenture.
The Company shall furnish to the Trustee upon its request a copy of any
such certificate or opinion.
SECTION 14.3. In case any one or more of the provisions contained in this
Indenture or in the Securities of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of
this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provisions had never been contained herein.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by operation of subsection (c) of Section 318 of the Trust
Indenture Act of 1939, as amended, the imposed duties shall control.
SECTION 14.4. Whenever in this Indenture the Company shall be required to
do or not to do anything so long as any of the Securities of any series
shall be outstanding, the Company shall, notwithstanding any such
provision, not be required to comply with such provisions if it shall be
entitled to have this Indenture satisfied and discharged pursuant to the
provisions hereof, even though in either case the Holders of any of the
Securities of that series shall have failed to present and surrender them
for payment pursuant to the terms of this Indenture.
SECTION 14.5. Although this Indenture, for convenience and for the purpose
of reference, is dated as of , the actual date of
execution by the Company and by the Trustee is as indicated by their
respective acknowledgments hereto annexed.
SECTION 14.6. Unless otherwise expressly provided, any order, notice,
request, demand, certificate or statement of the Company required or
permitted to be made or given under any provision hereof shall be
sufficiently executed if signed by its Chairman of the Board of Directors,
its Vice Chairman, its President or one of its Vice Presidents and by its
Treasurer or one of its Assistant Treasurers or its Secretary or one of its
Assistant Secretaries.
Upon any application, demand or request by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to
the proposed action, have been complied with, and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent
have been complied with.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than certificates provided
pursuant to Section 3.9 of this Indenture) shall include (1) a statement
that the person making such certificate or opinion has read such covenant
or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that,
in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of or representations by counsel, unless such officer knows that
the certificate or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid
are erroneous, or in the exercise of reasonable care should know that the
same are erroneous. Any certificate, statement or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon information which is
in the possession of the Company, upon the certificate, statement or
opinion of or representations by an officer or officers of the Company,
unless such counsel knows that the certificate, statement or opinion or
representations with respect to the matters upon which his certificate,
statement, or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel,
as the case may be, knows that the certificate or opinion or
representations with respect to the accounting matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm
is independent.
SECTION 14.7. If any Interest Payment Date or other payment date shall
fall on a day other than a Business Day, then any payment or deposit by or
on behalf of the Company required under the terms hereof to be made on such
date may be made instead on the next succeeding Business Day with the same
force and effect as if made on such date.
SECTION 14.8. All notices to or demands upon the Trustee shall be in
writing and may be served or presented, and such demands may be made, at
the principal corporate trust office of the Trustee, The Bank of New York,
101 Barclay Street, New York, New York 10286, attention: Corporate Trust
Trustee Administration. Any notice to or demand upon the Company shall be
deemed to have been sufficiently given or served by the Trustee or any
Holder for all purposes, by being mailed by registered mail addressed to
the Company, attention of the Senior Vice President, General Counsel and
Secretary, at Sears Tower, Chicago, Illinois 60684, or at such other
address as may be filed in writing by the Company with the Trustee.
SECTION 14.9. All the covenants, promises and agreements in this Indenture
contained by or on behalf of the Company, or by or on behalf of the
Trustee, shall bind and inure to the benefit of their respective successors
and assigns, whether so expressed or not.
SECTION 14.10. The descriptive headings of the several Articles of this
Indenture are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
SECTION 14.11. This Indenture may be simultaneously executed in any number
of counterparts, each of which when so executed and delivered shall be an
original; but such counterparts shall together constitute but one and the
same instrument.
SECTION 14.12. This Indenture shall be governed in accordance with the
internal laws of the State of Illinois.
IN WITNESS WHEREOF, SEARS, ROEBUCK AND CO. has caused this Indenture to be
signed in its corporate name by its
, and its corporate seal to be affixed hereto
and attested by its and THE BANK OF NEW YORK has caused
this Indenture to be signed in its corporate name by
and impressed with its corporate seal, attested by .
SEARS, ROEBUCK AND CO.
By
(CORPORATE SEAL)
Attest:
{ Dated: }
THE BANK OF NEW YORK
By
(CORPORATE SEAL)
Attest:
{ Dated: }
STATE OF ILLINOIS
{RIGHT BRACE}
COUNTY OF COOK
I, a Notary Public in and for the County and State aforesaid,
DO HEREBY CERTIFY
, of SEARS, ROEBUCK AND CO., who are personally known
to me to be the same persons whose names are subscribed to the foregoing
Indenture as such ,
appeared before me this day in person, and acknowledged that they signed,
sealed and delivered the said Indenture as their free and voluntary act,
and as the free and voluntary act of said Company for the uses and purposes
therein set forth, and caused the corporate seal of said Company to be
thereto affixed.
GIVEN under my hand and notarial seal, this day of , .
Notary Public
My Commission Expires:
{SEAL}
{RIGHT BRACE}
I, , a Notary Public in and for the
County and Commonwealth aforesaid, DO HEREBY CERTIFY that
, and , a , of
THE BANK OF NEW YORK, Trustee under the foregoing Indenture, who are
personally known to me to be the same persons whose names are subscribed to
the foregoing instrument appeared before me this day in person, and
acknowledged that they signed, sealed and delivered the said Indenture as
their free and voluntary act, and as the free and voluntary act of said
bank for the uses and purposes therein set forth, and caused the corporate
seal of said bank to be thereto affixed.
GIVEN under my hand and notarial seal, this day of , .
Notary Public
My Commission Expires:
{SEAL}
Exhibit 1(a)
UNDERWRITING AGREEMENT
, 199
Dear Sirs:
Sears, Roebuck and Co., a New York corporation (the
"Company") proposes to issue and sell from time to time
certain of its debt securities registered under the
registration statement referred to in Section 2(a) (the
"Securities"). The Company intends to enter into one or
more Pricing Agreements (each a "Pricing Agreement") in the
form of Annex I hereto, with such additions and deletions as
the parties thereto may determine, and, subject to the terms
and conditions stated herein and therein, to issue and sell
to the firms named in Schedule I to the applicable Pricing
Agreement (such firms constituting the "Underwriters" with
respect to such Pricing Agreement and the securities
specified therein) certain of the Securities specified in
Schedule II to such Pricing Agreement (with respect to such
Pricing Agreement, the "Designated Securities"), less the
principal amount of Designated Securities covered by Delayed
Delivery Contracts, if any, as provided in Section 3 hereof
and as may be specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, any
Designated Securities to be covered by Delayed Delivery
Contracts being herein sometimes referred to as "Contract
Securities" and the Designated Securities to be purchased by
the Underwriters (after giving effect to the deduction, if
any, for Contract Securities) being herein sometimes
referred to as "Underwriters' Securities"). The Designated
Securities with respect to each Pricing Agreement shall be
issued under an indenture (the "Indenture") identified in
such Pricing Agreement.
1. Particular sales of Designated Securities may be
made from time to time to the Underwriters of such
Securities, for whom you will act as representatives. This
Underwriting Agreement shall not be construed as an
obligation of the Company to sell any of the Securities or
as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell
any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be
evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing
Agreement shall specify the aggregate principal amount of
such Designated Securities, the public offering price of
such Designated Securities, the purchase price to the
Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the principal
amount of such Designated Securities to be purchased by each
Underwriter and whether any of such Designated Securities
shall be covered by Delayed Delivery Contracts (as defined
in Section 3 hereof) and the commission payable to the
Underwriters with respect thereto and shall set forth the
date, time and manner of delivery of such Designated
Securities and payment therefor. The Pricing Agreement
shall also describe, in a manner consistent with the
Indenture and the registration statement and prospectus with
respect thereto, the principal terms of such Designated
Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or
any other rapid transmission device designed to produce a
written record of communications transmitted. The
obligations of the Underwriters under this Agreement and
each Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees
with, each of the Underwriters that:
(a) A registration statement in respect of the
Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement
and any post-effective amendment thereto, each in the form
heretofore delivered or to be delivered to you and,
excluding exhibits to such registration statement, but
including all documents incorporated by reference in the
prospectus included therein, to you for each of the other
Underwriters have been declared effective by the Commission
in such form (any preliminary prospectus included in such
registration statement being hereinafter called a
"Preliminary Prospectus;" the various parts of such
registration statement, including all exhibits thereto
except Form T-1, each as amended at the time such part
became effective, being hereinafter collectively called the
"Registration Statement;" the prospectus relating to the
Securities, in the form in which it has most recently been
filed with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus;" any
reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to include the documents, if any,
incorporated by reference therein pursuant to the applicable
form under the Securities Act of 1933, as amended (the
"Act"), as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to include any documents filed
after the date of such Preliminary Prospectus or Prospectus,
as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and so incorporated by
reference; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable
Designated Securities in the form in which it is first filed
with the Commission pursuant to Rule 424(b) of Regulation C
under the Act, including any documents incorporated by
reference therein as of the date of such filing);
(b) Except for statements in such documents
which do not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the
Act and after substituting therefor any statements modifying
or superseding such excluded statements (i) the documents
incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder,
and none of such documents, when they became effective or
were so filed, as the case may be, contained, in the case of
documents which became effective under the Act, an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading, and (ii) any
further documents so filed and incorporated by reference
when they become effective or are filed with the Commission,
as the case may be, will conform in all material respects to
the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder and will not contain, in the case of documents
which become effective under the Act, an untrue statement of
a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading, and, in the case of documents which
are filed under the Exchange Act with the Commission, an
untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
are made, not misleading; provided, however, that this
representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by an Underwriter of Designated Securities through
you expressly for use therein; at the Time of Delivery (as
defined in Section 4 hereof), the Indenture will be
duly qualified under, and will conform in all material
respects to the requirements of, the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act");
(c) Except for statements in documents
incorporated therein by reference which do not constitute
part of the Registration Statement or the Prospectus
pursuant to Rule 412 of Regulation C under the Act and after
substituting therefor any statements modifying or
superseding such excluded statements, the Registration
Statement and the Prospectus conformed, and any amendments
or supplements thereto will, when they become effective or
are filed with the Commission, as the case may be, conform,
in all material respects to the requirements of the Act and
the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement
and as of the applicable filing date as to the Prospectus,
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to the Company by an Underwriter of Designated
Securities through you expressly for use in the Prospectus
as amended or supplemented relating to such Securities;
(d) Upon payment therefor as provided herein, the
Securities will have been duly and validly authorized
and (assuming their due authentication by the Trustee)
will have been duly and validly issued and will be
valid outstanding obligations of the Company in
accordance with their terms, except as the same may be
limited by insolvency, bankruptcy, reorganization, or
other laws relating to or affecting the enforcement of
creditors' rights or by general equity principles, and
will be entitled to the benefits of the Indenture;
(e) The issue and sale of the Securities pursuant
to any Pricing Agreement and under any Delayed Delivery
Contract and the compliance by the Company with all of the
provisions of the Securities, the Indenture, this Agreement
and any Delayed Delivery Contract will not conflict with or
result in any breach which would constitute a material
default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the property or
assets of the Company or any subsidiary thereof, material to
the Company and its subsidiaries (whether or not
consolidated) considered as a whole, pursuant to the terms
of, any indenture, loan agreement or other agreement or
instrument for borrowed money to which either the Company or
any of Sears Roebuck Acceptance Corp. ("SRAC"), Sears
Receivables Financing Group, Inc. ("SRFG"), Sears Credit
Corp. I ("SCCI"), Sears Credit Corp. II ("SCCII"), Sears DC
Corp. ("SDCC"), or Sears Overseas Finance N.V. ("SOFNV")
(collectively, the "Designated Subsidiaries") is a party or
by which the Company or any Designated Subsidiary may be
bound or to which any of the property or assets of the
Company or any Designated Subsidiary, material to the
Company and its subsidiaries (whether or not consolidated)
considered as a whole, is subject, nor will such action
result in any material violation of the provisions of the
Restated Certificate of Incorporation or the By-Laws of the
Company or, to the best of its knowledge, any statute or any
order, rule or regulation applicable to the Company of any
court or any Federal, State or other regulatory authority or
other governmental body having jurisdiction over the
Company, and no consent, approval, authorization or other
order of, or filing with, any court or any such regulatory
authority or other governmental body is required for the
issue and sale of the Designated Securities except as may be
required under the Act, the Exchange Act, the Trust
Indenture Act and securities laws of the various states and
other jurisdictions in which the Underwriters will offer and
sell the Designated Securities; and
(f) In the event any of the Securities are
purchased pursuant to Delayed Delivery Contracts, each of
such Delayed Delivery Contracts has been duly authorized by
the Company and, when duly executed and delivered by the
Company and the institutional purchaser named therein, will
constitute a valid and legally binding agreement of the
Company enforceable in accordance with its terms, except as
the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general equity
principles.
3. Upon the execution of the Pricing Agreement
applicable to any Designated Securities and authorization by
you of the release of the Underwriters' Securities, the
several Underwriters propose to offer the Underwriters'
Securities for sale upon the terms and conditions set forth
in the Prospectus as amended or supplemented.
The Company may specify in Schedule II to the Pricing
Agreement applicable to any Designated Securities that the
Underwriters are authorized to solicit offers to purchase
Designated Securities from the Company pursuant to delayed
delivery contracts (herein called "Delayed Delivery
Contracts"), substantially in the form of Annex II attached
hereto but with such changes therein as you and the Company
may authorize or approve. If so specified, the Underwriters
will endeavor to make such arrangements, and as compensation
therefor the Company will pay to you, for the accounts of
the Underwriters, at the Time of Delivery (as defined in
Section 4 hereof), such commission, if any, as may be set
forth in such Pricing Agreement. Delayed Delivery
Contracts, if any, are to be with institutional investors of
the types mentioned under the subcaption "Delayed Delivery
Arrangements" in the Prospectus and subject to other
conditions therein set forth. The Underwriters will not
have any responsibility in respect of the validity or
performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be
deducted from the principal amount of Designated Securities
to be purchased by each Underwriter as set forth in Schedule
I to the Pricing Agreement applicable to such Designated
Securities shall be, in each case, the principal amount of
Contract Securities which the Company has been advised by
you have been attributed to such Underwriter, provided that,
if the Company has not been so advised, the amount of
Contract Securities to be so deducted shall be, in each
case, that proportion of Contract Securities which the
principal amount of Designated Securities to be purchased by
such Underwriter under such Pricing Agreement bears to the
total principal amount of the Designated Securities (rounded
as you may determine to the nearest $1,000 principal
amount). The total principal amount of Underwriters'
Securities to be purchased by all the Underwriters pursuant
to such Pricing Agreement shall be the total principal
amount of Designated Securities set forth in Schedule I to
such Pricing Agreement less the principal amount of the
Contract Securities. The Company will deliver to you not
later than 3:30 p.m., New York time, on the third business
day preceding the Time of Delivery specified in the
applicable Pricing Agreement (or such other time and date as
you and the Company may agree upon in writing) a written
notice setting forth the principal amount of Contract
Securities.
The Pricing Agreement applicable to any Designated
Securities may provide that the Company and any entity
acting as an underwriter with respect to such Designated
Securities may enter into a deferred pricing agreement in
the form set forth in a schedule attached to such Pricing
Agreement.
4. Underwriters' Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating
thereto, in definitive form to the extent practicable, and
in such authorized denominations and registered in such
names as you may request upon at least two business days
prior notice to the Company, shall be delivered by or on
behalf of the Company to you for the account of such
Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor, by certified or
official bank check or checks or wire transfer, as specified
in such Pricing Agreement, payable to the order of the
Company in the funds specified in such Pricing Agreement,
all at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as you
and the Company may agree upon in writing, such time and
date being herein called the "Time of Delivery" for such
Securities.
Concurrently with the delivery of and payment for the
Underwriters' Securities, the Company will deliver to you
for the accounts of the Underwriters payment, by certified
or official bank check or checks or wire transfer, as
specified in the Pricing Agreement relating to such
Securities, payable to the order of the party designated in
such Pricing Agreement in the amount of any compensation
payable by the Company to the Underwriters in respect of any
Delayed Delivery Contracts as provided in Section 3 hereof
and in the Pricing Agreement relating to such Securities.
5. The Company agrees with each of the Underwriters
of Designated Securities:
(a) To make no further amendment or any
supplement to the Registration Statement or the Prospectus
as amended or supplemented after the date of the Pricing
Agreement relating to such Securities and prior to the Time
of Delivery for such Securities without first having
furnished you with a copy of the proposed form thereof and
given you a reasonable opportunity to review the same; to
advise you promptly of any such amendment or supplement
after such Time of Delivery and furnish you with copies
thereof and to file promptly all reports and any definitive
proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13 or 14 of
the Exchange Act for so long as the delivery of a prospectus
is required in connection with the offering or sale of such
Securities, and during such same period to advise you,
promptly after it receives notice thereof, of the time when
the Registration Statement, or any amendment thereto, or any
amended Registration Statement has become effective or any
supplement to the Prospectus or any amended Prospectus has
been filed, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of
any Prospectus, or the suspension of the qualification of
such Securities for offering or sale in any jurisdiction, or
the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or
Prospectus or for additional information; and in the event
of the issuance of any such stop order or of any such order
preventing or suspending the use of any such Prospectus or
suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such
action as you may reasonably request to qualify such
Securities for offering and sale under the securities laws
of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be
necessary to complete the distribution of such Securities,
provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of
the Prospectus as amended or supplemented in such quantities
as you may from time to time reasonably request, and, if the
delivery of a prospectus is required at any time in
connection with the offering or sale of such Securities and
if at such time any event shall have occurred as a result of
which the Prospectus 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 when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to
comply with the Act, the Exchange Act or the Trust Indenture
Act, to notify you and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many
copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security
holders, in accordance with Rule 158 under the Act or
otherwise, as soon as practicable, but in any event not
later than forty-five days after the end of the fourth full
fiscal quarter (ninety days in the case of the last fiscal
quarter in any fiscal year) following the fiscal quarter
ending after the effective date of the Registration
Statement and of the post-effective amendment thereto
hereinafter referred to, an earning statement of the Company
and its consolidated subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and
covering a period of at least twelve consecutive months
beginning (i) after the effective date of such Registration
Statement and (ii) after the date of the post-effective
amendment, if any, to such Registration Statement next
preceding the date of the Pricing Agreement relating to the
Designated Securities;
(e) During the period beginning from the date of
the Pricing Agreement for such Designated Securities and
continuing to and including the earlier of (i) the
termination of trading restrictions for such Designated
Securities, of which termination you agree to give the
Company prompt notice confirmed in writing, and (ii) the
Time of Delivery for such Designated Securities, not to
offer, sell, contract to sell or otherwise dispose of any
debt securities of the Company which mature more than one
year after such Time of Delivery and which are substantially
similar to such Designated Securities, without your prior
written consent, which consent shall not be unreasonably
withheld, except pursuant to arrangements of which you have
been advised by the Company prior to the time of execution
of such Pricing Agreement, which advice is confirmed in
writing to you by the end of the business day following the
date of such Pricing Agreement; and
(f) To pay or cause to be paid all expenses,
preapproved by the Company, incident to the performance of
its obligations hereunder and under any Pricing Agreement or
any Delayed Delivery Contract, including the cost of all
qualifications of the Securities under state securities laws
(including reasonable fees of counsel to the Underwriters in
connection with such qualifications and in connection with
legal investment surveys) and the cost of printing this
Agreement, any Pricing Agreement, and any blue sky and legal
investment memoranda.
6. The obligations of the Underwriters of any
Designated Securities under the Pricing Agreement relating
to such Designated Securities shall be subject, in their
discretion, to the condition that all representations and
warranties and other statements of the Company herein are,
at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that the Company
shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional
conditions:
(a) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for
additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction.
(b) All corporate proceedings and related matters
in connection with the organization of the Company, the
validity of the Indenture and the registration,
authorization, issue, sale and delivery of the Designated
Securities shall have been satisfactory to counsel to the
Underwriters, and such counsel shall have been furnished
with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred
to in this subdivision (b).
(c) Counsel to the Company shall have furnished
to you such counsel's written opinion, dated the Time of
Delivery for such Designated Securities, in form and
substance satisfactory to you in your reasonable judgment,
to the effect that:
(i) The Company, SRAC, SRFG, SCCI, SCCII,
and SDCC have been duly incorporated and are validly
existing as corporations in good standing under the laws of
their respective states of incorporation;
(ii) The Company has authorized capital stock
as set forth in the Registration Statement, and all of the
outstanding capital stock of SRAC, SRFG, SCCI, SCCII, and
SDCC is owned by the Company;
(iii) This Agreement and the Pricing
Agreement with respect to the Designated Securities have
been duly authorized, executed and delivered on the part of
the Company;
(iv) In the event any of the Designated
Securities are to be purchased pursuant to Delayed Delivery
Contracts, each of such Delayed Delivery Contracts has been
duly authorized, executed and delivered on the part of the
Company and, assuming such Contracts have been duly executed
and delivered by the institutional purchasers named therein,
constitutes a valid and legally binding agreement of the
Company in accordance with its terms, except as the
foregoing may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the
enforcement of creditors' rights or by general equity
principles;
(v) The issue and sale of the Designated
Securities and the compliance by the Company with all of the
provisions of the Designated Securities, the Indenture, each
of the Delayed Delivery Contracts, if any, this Agreement
and the Pricing Agreement with respect to the Designated
Securities will not (a) conflict with or result in any
breach which would constitute a material default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the
Company or any subsidiary thereof, material to the Company
and its subsidiaries (whether or not consolidated)
considered as a whole, pursuant to the terms of, any
indenture, loan agreement or other agreement or instrument
for borrowed money known to such counsel to which the
Company or any Designated Subsidiary is a party or by which
the Company or any Designated Subsidiary may be bound or to
which any of the property or assets of the Company or of any
Designated Subsidiary, material to the Company and its
subsidiaries (whether or not consolidated) considered as a
whole, is subject, (b) result in any material violation of
the provisions of the Restated Certificate of Incorporation
or the By-Laws of the Company or (c) to the best of the
knowledge of such counsel, result in any material violation
of any statute or any order, rule or regulation applicable
to the Company of any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over the Company, other than the Act, the
Exchange Act, the Trust Indenture Act and the rules and
regulations under each such act, and other than the
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Designated
Securities; and, to the best knowledge of such counsel, no
consent, approval, authorization or other order of, or
filing with, any court or any such regulatory authority or
other governmental body is required for the issue and sale
of the Designated Securities except as may be required under
the Act, the Exchange Act, the Trust Indenture Act and
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Designated
Securities;
(vi) The Indenture has been duly authorized,
executed and delivered on the part of the Company and, as to
the Company, is a valid and binding instrument in accordance
with its terms except as the foregoing may be limited by
insolvency, bankruptcy, reorganization or other laws
relating to or affecting the enforcement of creditors'
rights or by general equity principles, and has been
qualified under the Trust Indenture Act; the Underwriters'
Securities have been duly authorized and (assuming their due
authentication by the Trustee) have been duly executed,
issued and delivered on the part of the Company and
constitute valid and binding obligations of the Company in
accordance with their terms, entitled to the benefits of the
Indenture, except as the same may be limited by insolvency,
bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general
equity principles; the Contract Securities, if any, when
executed, authenticated, issued and delivered pursuant to
the Indenture and Delayed Delivery Contracts, will
constitute valid and binding obligations of the Company in
accordance with their terms, entitled to the benefits of the
Indenture, except as the foregoing may be limited by
insolvency, bankruptcy, reorganization or other laws
relating to or affecting the enforcement of creditors'
rights or by general equity principles;
(vii) Such counsel does not know of any
pending legal or governmental proceedings required to be
described in the Prospectus as amended or supplemented which
are not described as required;
(viii) Except for statements in such
documents which do not constitute part of the Registration
Statement or the Prospectus pursuant to Rule 412 of
Regulation C under the Act and after substituting therefor
any statements modifying or superseding such excluded
statements, the documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements and related schedules, the analyses of
operations and financial condition and other financial,
statistical and accounting data therein, as to which such
counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
(ix) Except for statements in such documents
which do not constitute part of the Registration Statement
or the Prospectus pursuant to Rule 412 of Regulation C under
the Act and after substituting therefor any statements
modifying or superseding such excluded statements, the
Registration Statement and the Prospectus as amended or
supplemented (excluding the documents incorporated by
reference therein) (other than the financial statements and
related schedules, the analyses of operations and financial
condition and other financial, statistical and accounting
data therein as to which such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder; the answers in the Registration Statement to
Items 9 and 10 (insofar as it relates to such counsel) of
Form S-3 are to the best of such counsel's knowledge
accurate statements or summaries of the matters therein set
forth and fairly present the information called for with
respect to those matters by the Act and the rules and
regulations thereunder; and
(x) Such counsel does not know of any
contract or other document to which the Company or any
subsidiary thereof is a party required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Prospectus
as amended or supplemented which has not been so filed,
incorporated by reference or described.
In rendering such opinion, such counsel may rely
to the extent such counsel deems appropriate upon
certificates of officers or other executives of the Company,
its business groups and its subsidiaries and of public
officials as to factual matters and upon opinions of other
counsel. Such counsel shall also state that: (a) nothing
has come to such counsel's attention which has caused such
counsel to believe that any of the documents referred to in
subdivision (viii) above (other than the financial
statements, the analyses of operations and financial
condition and other financial, statistical and accounting
data therein, as to which such counsel need express no
belief), in each case after excluding any statement in any
such document which does not constitute part of the
Registration Statement or the Prospectus as amended or
supplemented pursuant to Rule 412 of Regulation C under the
Act and after substituting therefor any statement modifying
or superseding such excluded statement, when they became
effective or were filed, as the case may be, contained, in
the case of documents which became effective under the Act,
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, and, in the case
of documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading, and (b) nothing
has come to such counsel's attention which has caused such
counsel to believe that the Registration Statement or the
Prospectus as amended or supplemented (other than the
financial statements, the analyses of operations and
financial condition and other financial, statistical and
accounting data therein, as to which such counsel need
express no belief) contains an untrue statement of a
material fact or omits to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading.
(d) At the Time of Delivery for such Designated
Securities, Deloitte & Touche shall have furnished you a
letter or letters, dated the date of delivery thereof in
form and substance satisfactory to you as to such matters as
you may reasonably request.
(e) (i) The Company and its subsidiaries
(whether or not consolidated) considered as a whole, shall
not have sustained, since the date of the latest audited
financial statements included or incorporated by reference
in the Prospectus as amended or supplemented any material
loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or
governmental action, order or decree and (ii) since the
respective dates as of which information is given in the
Prospectus as amended or supplemented there shall not have
been any material change in the capital stock accounts or
long-term debt of the Company or any material adverse change
in the general affairs, financial position, shareholders'
equity or results of operations of the Company and its
subsidiaries (whether or not consolidated) considered as a
whole, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, the effect of which
in any such case described in clause (i) or (ii), in your
judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Designated
Securities on the terms and in the manner contemplated in
the Prospectus as amended or supplemented.
(f) Subsequent to the date of the Pricing
Agreement relating to the Designated Securities, no
downgrading shall have occurred in the rating accorded to
the Company's senior debt securities by Moody's Investors
Service, Inc. or Standard & Poor's Corporation; provided,
however, that this subdivision (f) shall not apply to any
such rating agencies which shall have notified you of the
rating of the Designated Securities prior to the execution
of the Pricing Agreement.
(g) Subsequent to the date of the Pricing
Agreement relating to the Designated Securities neither (i)
the United States shall have become engaged in the outbreak
or escalation of hostilities involving the United States or
there has been a declaration by the United States of a
national emergency or a declaration of war, (ii) a banking
moratorium shall have been declared by either Federal or New
York State authorities, nor (iii) trading in securities
generally on the New York Stock Exchange shall have been
suspended nor limited or minimum prices shall have been
established by such Exchange, any of which events, in your
judgment, renders it inadvisable to proceed with the public
offering or the delivery of the Designated Securities.
(h) The Company shall have furnished or caused to
be furnished to you at the Time of Delivery for the
Designated Securities certificates satisfactory to you as to
the accuracy at and as of such Time of Delivery of the
representations, warranties and agreements of the Company
herein and as to the performance by the Company of all its
obligations hereunder to be performed at or prior to such
Time of Delivery and the Company shall have also furnished
you similar certificates satisfactory to you as to the
matters set forth in subdivision (a) of this Section 6.
7. (a) The Company will indemnify and hold harmless
each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement, any prospectus relating to the Securities or the
Prospectus as amended or supplemented, or any amendment or
supplement thereto furnished by the Company, or arise out of
or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or (in
the case of the Registration Statement or the Prospectus as
amended or supplemented, or any amendment or supplement
thereto) necessary to make the statements therein not
misleading or (in the case of any Preliminary Prospectus)
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading; and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending
any such action or claim; provided, however, that the
Company shall 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 or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement, the
Prospectus or the Prospectus as amended or supplemented or
any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company
by any Underwriter of Designated Securities through you
expressly for use in the Prospectus as amended or
supplemented relating to such Securities; and provided,
further, that the Company shall not be liable to any
Underwriter or any person controlling such Underwriter under
the indemnity agreement in this subdivision (a) with respect
to the Preliminary Prospectus or the Prospectus or the
Prospectus as amended or supplemented, as the case may be,
to the extent that any such loss, claim, damage or liability
of such Underwriter or controlling person results solely
from the fact that such Underwriter sold Designated
Securities to a person to whom there was not sent or given,
at or prior to the written confirmation of such sale, a copy
of the Prospectus (excluding documents incorporated by
reference) or of the Prospectus as then amended or
supplemented (excluding documents incorporated by reference)
if the Company has previously furnished copies thereof to
such Underwriter.
(b) Each Underwriter will indemnify and hold
harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, the
Prospectus or the Prospectus as amended or supplemented, or
any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein
a material fact required to be stated therein or (in the
case of the Registration Statement or the Prospectus or the
Prospectus as amended or supplemented, or any amendment or
supplement thereto) necessary to make the statements therein
not misleading or (in the case of any Preliminary
Prospectus) necessary 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 any
Preliminary Prospectus, the Registration Statement, the
Prospectus or the Prospectus as amended or supplemented, or
any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company
by such Underwriter through you expressly for use therein;
and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim.
(c) Within a reasonable period after receipt by
an indemnified party under subdivision (a) or (b) above of
notice of the commencement of any action with respect to
which indemnification is sought under such subdivision or
contribution may be sought under subdivision (d) below, such
indemnified party shall notify the indemnifying party in
writing of the commencement thereof. In case any such
action shall be brought against any indemnified party, the
indemnifying party shall be entitled to participate in, and,
to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this
Section 7 is unavailable to an indemnified party under
subdivision (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
Underwriters of the Designated Securities on the other from
the offering of the Designated Securities to which such
loss, claim, damage or liability (or action in respect
thereof) relates and also the relative fault of the Company
on the one hand and the Underwriters of the Designated
Securities on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative
benefits received by the Company on the one hand and such
Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering
(before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by
such Underwriters, in each case as set forth on the cover
page of the Prospectus as amended or supplemented. 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 on the one hand or the Underwriters on the other and
the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission of the Company on the one hand and the
Underwriters, directly or through you, on the other hand.
With respect to any Underwriter, such relative fault shall
also be determined by reference to the extent (if any) to
which such losses, claims, damages or liabilities (or
actions in respect thereof) with respect to any Preliminary
Prospectus result from the fact that such Underwriter sold
Designated Securities to a person to whom there was not sent
or given, at or prior to the written confirmation of such
sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by
reference) if the Company has previously furnished copies
thereof to such Underwriter. The Company and the
Underwriters agree that it would not be just and equitable
if contribution pursuant to this subdivision (d) were
determined by per capita allocation among the indemnifying
parties (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which
does not take account of the equitable considerations
referred to above in this subdivision (d). The amount paid
or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subdivision (d)
shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this subdivision (d), no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subdivision
(d) to contribute are several in proportion to their
respective underwriting obligations with respect to such
securities and not joint.
(e) The obligations of the Company under this
Section 7 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 Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 7 shall
be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of
the Company and to each person, if any, who controls the
Company within the meaning of the Act.
8. (a) If any Underwriter shall default in its
obligation to purchase the Underwriters' Securities which it
has agreed to purchase under the Pricing Agreement relating
to such Securities, you may in your discretion arrange for
yourselves or another party or other parties to purchase
such Designated Securities on the terms contained herein.
If within thirty-six hours after such default by any
Underwriter you do not arrange for the purchase of such
Designated Securities, then the Company shall be entitled to
a further period of thirty-six hours within which to procure
another party or other parties to purchase such Designated
Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that
you have so arranged for the purchase of such Designated
Securities, or the Company notifies you that it has so
arranged for the purchase of such Designated Securities, you
or the Company shall have the right to postpone the Time of
Delivery for such Designated Securities for a period of not
more than seven days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement
or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to
file promptly any amendments or supplements to the
Registration Statement or the Prospectus which may thereby
be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this
Section with like effect as if such person had originally
been a party to the Pricing Agreement with respect to such
Designated Securities.
(b) If, after giving effect to any arrangements
for the purchase of the Underwriters' Securities of a
defaulting Underwriter or Underwriters by you and the
Company as provided in subdivision (a) above, the aggregate
principal amount of such Underwriters' Securities which
remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of the Designated Securities,
then the Company shall have the right to require each non-
defaulting Underwriter to purchase the principal amount of
Underwriters' Securities which such Underwriter agreed to
purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based
on the principal amount of Designated Securities which such
Underwriter agreed to purchase under such Pricing Agreement)
of the Underwriters' Securities of such defaulting
Underwriter or Underwriters for which such arrangements have
not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements
for the purchase of the Underwriters' Securities of a
defaulting Underwriter or Underwriters by you and the
Company as provided in subdivision (a) above, the aggregate
principal amount of Underwriters' Securities which remains
unpurchased exceeds one-eleventh of the aggregate principal
amount of the Designated Securities, as referred to in
subdivision (b) above, or if the Company shall not exercise
the right described in subdivision (b) above to require non-
defaulting Underwriters to purchase Underwriters' Securities
of a defaulting Underwriter or Underwriters, then the
Pricing Agreement relating to such Designated Securities
shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for
the expenses to be borne by the Company and the Underwriters
as provided in Section 5(f) hereof and the indemnity and
contribution agreements in Section 7 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability
for its default.
9. The respective indemnities, agreements,
representations, warranties and other statements of the
Company and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any
Underwriter or any controlling person of any Underwriter, or
the Company, or any officer or director or controlling
person of the Company, and shall survive delivery of and
payment for the Securities.
Anything herein to the contrary notwithstanding, the
indemnity agreement of the Company in subdivisions (a) and
(e) of Section 7 hereof, the representations and warranties
in subdivisions (b) and (c) of Section 2 hereof and any
representation or warranty as to the accuracy of the
Registration Statement or the Prospectus as amended or
supplemented contained in any certificate furnished by the
Company pursuant to subdivision (h) of Section 6 hereof,
insofar as they may constitute a basis for indemnification
for liabilities (other than payment by the Company of
expenses incurred or paid in the successful defense of any
action, suit or proceeding) arising under the Act, shall not
extend to the extent of any interest therein of an
Underwriter or a controlling person of an Underwriter if a
director, officer or controlling person of the Company when
the Registration Statement becomes effective or a person
who, with his consent, is named in the Registration
Statement as being about to become a director of the
Company, is a controlling person of such Underwriter, except
in each case to the extent that an interest of such
character shall have been determined by a court of
appropriate jurisdiction as not against public policy as
expressed in the Act. Unless in the opinion of counsel for
the Company the matter has been settled by controlling
precedent, the Company will, if a claim for such
indemnifications is asserted, submit to a court of
appropriate jurisdiction the question whether such interest
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
10. If any Pricing Agreement shall be terminated
pursuant to Section 8 hereof, the Company shall not then be
under any liability to any Underwriter with respect to the
Designated Securities covered by such Pricing Agreement
except as provided in Section 5(f) and Section 7 hereof;
but, if for any other reason Underwriters' Securities are
not delivered by or on behalf of the Company as provided
herein, the Company will reimburse the Underwriters through
you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Designated Securities,
but the Company shall then be under no further liability to
any Underwriter with respect to such Designated Securities
except as provided in Section 5(f) and Section 7 hereof.
11. In all dealings hereunder, you shall act on behalf
of each of the Underwriters of Designated Securities, and
the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any
Underwriter made or given by you or by Morgan Stanley & Co.
Incorporated, representing you.
All statements, requests, notices and agreements
hereunder shall be in writing or by telegram if promptly
confirmed in writing and if to the Underwriters shall be
sufficient in all respects, if delivered or sent by
registered mail to you as the Representatives at
; and if to the Company shall be
sufficient in all respects if delivered or sent by
registered mail to the Company at Sears Tower, Chicago,
Illinois 60684, Attention: Senior Vice President, General
Counsel and Secretary.
12. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the
Underwriters, the Company and, to the extent provided in
Section 7 and Section 9 hereof, the officers and directors
of the Company and each person who controls the Company or
any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of
any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
13. Time shall be of the essence of each Pricing
Agreement.
14. This Agreement and each Pricing Agreement shall be
construed in accordance with the laws of the State of New
York.
15. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto and
thereto in any number of counterparts, each of which shall
be deemed to be an original, but all such respective
counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your
understanding, please sign and return two counterparts
hereof.
Very truly yours,
SEARS, ROEBUCK AND CO.
By:
Accepted as of the date hereof:
By:
<PAGE>
ANNEX I
PRICING AGREEMENT
,199
Dear Sirs:
Sears, Roebuck and Co., a New York corporation (the
"Company"), proposes subject to the terms and conditions
stated herein and in the Underwriting Agreement, dated
, 199 (the "Underwriting Agreement"), executed
between the Company, on the one hand, and
on the other hand,
to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities"). Each of
the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to
be a part of this Agreement to the same extent as if such
provisions had been set forth in full herein; and each of
the representations and warranties set forth therein shall
be deemed to have been made at and, except where otherwise
specified, as of the date of this Pricing Agreement, except
that each representation and warranty with respect to the
Prospectus in Section 2 of the Underwriting Agreement shall
be deemed to be a representation and warranty as of the date
of the Underwriting Agreement in relation to the Prospectus
(as therein defined) and also a representation and warranty
as of the date of this Pricing Agreement in relation to the
Prospectus as amended or supplemented. Unless otherwise
defined herein, terms defined in the Underwriting Agreement
are used herein as therein defined.
An amendment to the Registration Statement, or a
supplement to the Prospectus, as the case may be, relating
to the Designated Securities, in the form heretofore
delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein
and in the Underwriting Agreement incorporated herein by
reference, the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at
the time and place and at a purchase price to the
Underwriters set forth in Schedule II hereto, the principal
amount of Designated Securities set forth opposite the name
of such Underwriter in Schedule I hereto, less the principal
amount of Designated Securities covered by Delayed Delivery
Contracts, if any, as may be specified in such Schedule II.
If the foregoing is in accordance with your
understanding, please sign and return to us two counterparts
hereof, and upon acceptance hereof by you on behalf of each
of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding
agreement between the Company and each of the Underwriters.
It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the
authority set forth in a form of Agreement among
Underwriters, the form of which shall be supplied to the
Company upon request. You represent that you are authorized
on behalf of yourselves and on behalf of each of the other
Underwriters named in Schedule I hereto to enter into this
Agreement.
Very truly yours,
SEARS, ROEBUCK AND CO.
By: ...........................
Accepted as of the date hereof:
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Principal
Amount of
Designated
Securities to
Underwriter be purchased
.............. $
..............
..............
Total............ $
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate principal amount:
$
Price to Public:
% of the principal amount of
the Designated Securities, plus accrued
interest from to the Time of
Delivery [and accrued amortization,
if any, from to the Time
of Delivery]
Purchase Price by Underwriters:
% of the principal amount of the
Designated Securities, plus accrued
interest from to the Time of
Delivery [and accrued amortization,
if any, from to the Time
of Delivery]
Indenture:
Indenture, dated , between
the Company and , as Trustee
Form of Designated Securities:
[Certificated form only][Global form only]
Maturity:*
Interest Rate:*
[ %] [Zero Coupon]
Interest Payment dates:*
[months and dates]
Redemption Provisions:*
[No provision for redemption]
[The Designated Securities may be redeemed,
otherwise than through the sinking fund,
in whole or in part at the option of the
Company, in the amount of $ or an
integral multiple thereof,
[on or after , at the following
redemption prices (expressed in percentages of
principal amount). If [redeemed on or before
, %, and if] redeemed during the
12-month period beginning ,
Year Redemption Price
and thereafter at 100% of their principal amount,
together in each case with accrued interest to the
redemption date.]
[on any interest payment date falling on or after
, , at the election of the Company, at a
redemption price equal to the principal amount thereof,
plus accrued interest to the date of
redemption.]
[Other possible redemption provisions, such as mandatory
redemption upon occurrence of certain
events or redemption for changes in tax law]
[Restriction of refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit
of a sinking fund to retire $ principal
amount of Designated Securities on in each
of the years through at 100% of their
principal amount plus accrued interest] [, together with
(cumulative) (non-cumulative) redemptions at
the option of the Company to retire an additional $
principal amount of Designated Securities in
the years through at 100% of their
principal amount plus accrued interest].
Time of Delivery:
[ ] A.M., Chicago time, [ ] ,19
Funds in which payment by Underwriters to Company to be
made:
[ ] Clearing House Funds
[ ] Same day funds
Method of Payment:
[Certified or official bank check or checks]
[Wire transfer to ]
Closing Location:
Delayed Delivery:
[None] [Underwriters are authorized to solicit Delayed
Delivery Contracts relating to a maximum of
$ in aggregate principal amount of the
Designated Securities. Underwriters' commission shall
be % of the principal amount of Designated Securities
for which Delayed Delivery Contracts have
been entered into. Such commission shall be payable to
the order of .]
Counsel:
To the Company, [ ]
To the Underwriters, [ ]
[Other Terms]:*
*The terms of an attached form of security may be
incorporated by reference.
<PAGE>
ANNEX II
DELAYED DELIVERY CONTRACT
SEARS, ROEBUCK AND CO.,
c/o
Attention:
,199
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from Sears,
Roebuck and Co. (hereinafter called the "Company"), and the
Company agrees to sell to the undersigned,
$
principal amount of the Company's [Title of Designated
Securities] (hereinafter called the "Designated
Securities"), offered by the Company's Prospectus dated ,
199 as amended or supplemented, receipt of a copy of which
is hereby acknowledged, at a purchase price of % of the
principal amount thereof, plus accrued interest from the
date from which interest accrues as set forth below, and on
the further terms and conditions set forth in this contract.
[The undersigned will purchase the Designated Securities
from the Company on , 199 (the "Delivery Date")
and interest on the Designated Securities so purchased will
accrue from , 199 .]
[The undersigned will purchase the Designated Securities
from the Company on the delivery date or dates and in the
principal amount or amounts set forth below:
Principal Date from Which
Delivery Date Amount Interest Accrues
, 199 $ , 199
, 199 $ , 199
Each such date on which Designated Securities are to be
purchased hereunder is hereinafter referred to as a
"Delivery Date".]
Payment for the Designated Securities which the
undersigned has agreed to purchase on [the] [each] Delivery
Date shall be made to the Company or its order by [certified
or official bank check] [in Clearing House
funds at the office of ,
Chicago, Illinois,] [or] [by wire transfer to a bank account
specified by the Company], on [the] [such] Delivery Date
upon delivery to the undersigned of the Designated
Securities then to be purchased by the undersigned in
definitive fully registered form and in such denominations
and registered in such names as the undersigned may
designate by written or telegraphic communication addressed
to the Company not less than five full business days prior
to [the] [such] Delivery Date.
The obligation of the undersigned to take delivery of
and make payment for Designated Securities on [the] [each]
Delivery Date shall be subject to the conditions that (a)
the purchase of Designated Securities to be made by the
undersigned shall not on [the] [such] Delivery Date be
prohibited under the laws of the jurisdiction to which the
undersigned is subject and (b) the Company, on or before
, 199 , shall have sold to the several
Underwriters, pursuant to the Pricing Agreement dated
, 199 with the Company, an aggregate principal
amount of Designated Securities equal to $ , minus
the aggregate principal amount of Designated Securities
covered by this contract and other contracts similar to this
contract. The obligation of the undersigned to take
delivery of and make payment for Designated Securities shall
not be affected by the failure of any purchaser to take
delivery of and make payment for Designated Securities
pursuant to other contracts similar to this contract.
Promptly after completion of the sale to the
Underwriters the Company will mail or deliver to the
undersigned at its address set forth below notice to such
effect, accompanied by a copy of the Opinion of Counsel for
the Company delivered to the Underwriters in connection
therewith.
The undersigned represents and warrants that, as of the
date of this contract, the undersigned is not prohibited
from purchasing the Designated Securities hereby agreed to
be purchased by it under the laws of the jurisdiction to
which the undersigned is subject.
This contract will inure to the benefit of and be
binding upon the parties hereto and their respective
successors, but will not be assignable by either party
hereto without written consent of the other.
This contract may be executed by either of the parties
hereto 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 instrument.
This contract shall be governed by and construed in
accordance with the internal laws of the State of Illinois.
It is understood that the acceptance by the Company of
any Delayed Delivery Contract (including this contract) is
in the Company's sole discretion and that, without limiting
the foregoing, acceptances of such contracts need not be on
a first-come, first-served basis. If this contract is
acceptable to the Company, it is requested that the Company
sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at its address
set forth below. This will become a binding contract
between the Company and the undersigned when such
counterpart is so mailed or delivered by the Company.
Yours very truly,
By
(Signature)
(Name and Title)
(Address)
Accepted, ,199
in Chicago, Illinois
SEARS, ROEBUCK AND CO.
By
(Title)
Exhibit 1(b)
SEARS, ROEBUCK AND CO.
U.S. $ Medium-Term Notes Series
DISTRIBUTION AGREEMENT
, 199
Dear Sirs:
Sears, Roebuck and Co., a New York corporation (the
"Company"), proposes to issue and sell from time to time its
medium-term debt securities (the "Notes") in an aggregate
principal amount up to U.S. $ (or the equivalent
in foreign currency or currency units), and agrees with each
of you (individually, an "Agent", and collectively, the
"Agents") as set forth in this Agreement. Subject to the
terms and conditions stated herein, the Company hereby (i)
appoints each Agent as an agent of the Company for the
purpose of soliciting and receiving offers to purchase Notes
from the Company and (ii) agrees that whenever it determines
to sell Notes directly to any Agent as principal, it will
enter into a separate agreement (each a "Terms Agreement"),
substantially in the form of Annex I hereto, relating to
such sale in accordance with Section 2(b) hereof (unless the
Company and such Agent shall otherwise agree).
The Notes will be issued under an indenture, dated as
of (the "Indenture"), between the Company
and , as Trustee (the "Trustee"). The Notes
shall have the currency denomination, maturities, annual
interest rates (whether fixed or floating), redemption
provisions and other terms set forth in the Prospectus
referred to below as it may be amended or supplemented from
time to time. The Notes will be issued, and the terms and
rights thereof established, from time to time by the Company
in accordance with the Indenture and the Administrative
Procedure attached hereto as Annex II as it may be amended
from time to time by written agreement between the Agents
and the Company (the "Procedure") and, if applicable, will
be specified in a related Terms Agreement.
1. The Company represents and warrants to, and agrees
with, each Agent that:
(a) A registration statement on Form S-3
(Registration No. 33- ) in respect of U.S. $
aggregate principal amount (or the equivalent in foreign
currency or currency units) of debt securities of the
Company, including the Notes, has been filed with the
Securities and Exchange Commission (the "Commission") in the
form heretofore delivered to such Agent, excluding exhibits
(whether or not incorporated by reference) to such
registration statement but including all documents
incorporated by reference in the prospectus included
therein, and such registration statement in such form has
been declared effective by the Commission and no stop order
suspending the effectiveness of such registration statement
has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement being
hereinafter called a "Preliminary Prospectus;" the various
parts of such registration statement, including all exhibits
thereto but excluding Form T-1, each as amended at the time
such part became effective, being hereinafter collectively
called the "Registration Statement;" the prospectus relating
to the Notes, in the form in which it has most recently been
filed with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus;" any
reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the
applicable form under the Securities Act of 1933, as amended
(the "Act") as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any supplement to the
Prospectus that sets forth only the terms of a particular
issue of Notes being hereinafter called a "Pricing
Supplement;" any reference to any amendment or supplement to
any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case
may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated therein by
reference; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as
amended or supplemented with respect to Notes sold pursuant
to this Agreement, in the form in which it is filed with the
Commission pursuant to Rule 424(b) of Regulation C under the
Act, including any documents incorporated by reference
therein as of the date of such filing);
(b) Except for statements in such documents which
do not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the
Act and after substituting therefor any statements modifying
or superseding such excluded statements (i) the documents
incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder,
and none of such documents, when they became effective or
were so filed, as the case may be, contained, in the case of
documents which became effective under the Act, an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading, and (ii) any
further documents so filed and incorporated by reference in
the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform
in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not
contain, in the case of documents which become effective
under the Act, an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading,
and in the case of documents which are filed under the
Exchange Act with the Commission, an untrue statement of
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to the Company by any Agent expressly for use in
the Prospectus as amended or supplemented to relate to a
particular issuance of Notes; the Indenture has been duly
qualified under, and conforms in all material respects to
the requirements of, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act");
(c) Except for statements in documents
incorporated therein by reference which do not constitute
part of the Registration Statement or the Prospectus
pursuant to Rule 412 of Regulation C under the Act and after
substituting therefor any statements modifying or
superseding such excluded statements, the Registration
Statement and the Prospectus conformed, and any amendments
or supplements thereto will, when they become effective or
are filed with the Commission, as the case may be, conform,
in all material respects to the requirements of the Act and
the Trust Indenture Act, and the rules and regulations of
the Commission thereunder and do not and will not, as of the
applicable effective date in the case of the Registration
Statement and any amendment thereto and as of the applicable
filing date in the case of the Prospectus and any supplement
thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to the Company by any Agent expressly for use in
the Prospectus as amended or supplemented to relate to a
particular issuance of Notes;
(d) Upon payment therefor as provided herein and
in any Terms Agreement, the Notes will have been duly and
validly authorized, and (assuming their due authentication
by the Trustee) will have been duly and validly issued and
will be valid outstanding obligations of the Company in
accordance with their terms, except as the same may be
limited by insolvency, bankruptcy, reorganization, or other
laws relating to or affecting the enforcement of creditors'
rights or by general equity principles, and will be entitled
to the benefits of the Indenture;
(e) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture, this Agreement and any Terms Agreement
will not conflict with or result in any breach which would
constitute a material default under, or result in the
creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of the Company or any
subsidiary thereof, material to the Company and its
subsidiaries (whether or not consolidated) considered as a
whole, pursuant to the terms of, any indenture, loan
agreement or other agreement or instrument for borrowed
money to which the Company or any of Sears Roebuck
Acceptance Corp. ("SRAC"), Sears Receivables Financing
Group, Inc. ("SRFG"), Sears Credit Corp. I ("SCCI"), Sears
Credit Corp. II ("SCCII"), Sears DC Corp. ("SDCC") or Sears
Overseas Finance N.V. ("SOFNV") (collectively, the
"Designated Subsidiaries") is a party or by which the
Company or any Designated Subsidiary may be bound or to
which any of the property or assets of the Company or any
Designated Subsidiary, material to the Company and its
subsidiaries (whether or not consolidated) considered as a
whole, is subject, nor will such action result in any
material violation of the provisions of the Restated
Certificate of Incorporation or the By-Laws of the Company
or, to the best of its knowledge, any statute or any order,
rule or regulation applicable to the Company of any court or
any Federal, State or other regulatory authority or other
governmental body having jurisdiction over the Company, and
no consent, approval, authorization or other order of, or
filing with, any court or any such regulatory authority or
other governmental body is required for the solicitation of
offers to purchase Notes and the issue and sale of the
Notes, except as may be required under the Act, the Exchange
Act, the Trust Indenture Act and securities laws of the
various states and other jurisdictions in which the Agents
will solicit offers to purchase Notes from the Company and
will purchase Notes as principal, as the case may be; and
(f) Immediately after the settlement of any sale
of Notes by the Company resulting from solicitation by such
Agent hereunder and immediately after any Time of Delivery
(as defined below) relating to a sale to an Agent as
principal, the aggregate principal amount of Notes which
shall have been issued and sold by the Company hereunder or
under any Terms Agreement and of any debt securities of the
Company (other than such Notes) that shall have been issued
and sold pursuant to the Registration Statement will not
exceed the amount of debt securities registered under the
Registration Statement.
2. (a) On the basis of the representations and
warranties herein contained, and subject to the terms and
conditions herein set forth, each of the Agents hereby
severally and not jointly agrees to act as agent of the
Company, to use its reasonable efforts to solicit offers to
purchase the Notes from the Company upon the terms and
conditions set forth in the Prospectus relating to the Notes
as amended or supplemented from time to time and in the
Procedure.
Subject to the provisions of this Section 2 and to the
Procedure, offers for the purchase of Notes may be solicited
by each Agent as agent for the Company at such time and in
such amounts as such Agent deems advisable; provided,
however, that the Company reserves the right to sell Notes
directly on its own behalf or through other agents, dealers
or underwriters, and to appoint additional persons from time
to time to serve as Agents pursuant to this Agreement.
Each Agent agrees that it will not solicit an offer to
purchase Notes or deliver any of the Notes in any
jurisdiction outside the United States of America except
under circumstances that will result in compliance with the
applicable laws thereof. Each Agent understands that no
action has been taken to permit a public offering in any
jurisdiction outside the United States of America where
action would be required for such purpose. The Agents
further undertake that in connection with the distribution
of Notes denominated in any foreign currency or currency
unit, they will as agent, directly or indirectly, not
solicit offers to purchase and as principal under any Terms
Agreement or otherwise, directly or indirectly, not offer,
sell or deliver, such Notes in or to residents of the
country issuing such currency, except as permitted by
applicable law.
The Company reserves the right, in its sole discretion,
to instruct the Agents to suspend at any time, for any
period of time or permanently, the solicitation of offers to
purchase the Notes. Promptly after receipt of notice from
the Company, but in any event not less than one business day
thereafter, the Agents will suspend solicitation of offers
to purchase Notes from the Company until such time as the
Company has advised them that such solicitation may be
resumed.
The Company agrees to pay each Agent, at the time of
settlement of any sale of a Note by the Company, the
purchase of which is solicited by such Agent, a commission
in United States dollars (which, in the case of Notes
denominated in other than United States dollars, shall be
based upon the Market Exchange Rate (as defined below) for
such currency or currency unit at the time of any acceptance
of an offer to purchase a Note) in an amount equal to the
following percentage of the principal amount of such Note
sold (or at such other amount as may from time to time be
negotiated between such Agent and the Company:
Maturity Commission
(percentage of
aggregate
principal amount
of Notes sold)
9 months to less than 1 year .%
1 year to less than 18 months .%
18 months to less than 2 years .%
2 years to less than 3 years .%
3 years to less than 4 years .%
4 years to less than 5 years .%
5 years to less than 6 years .%
6 years to less than 7 years .%
7 years to less than 11 years .%
11 years to less than 15 years .%
15 years to less than 20 years .%
20 years to 30 years .%
Greater than 30 years to be
negotiated
Notwithstanding anything herein to the contrary, if, at or
prior to the time of settlement, the Company and an Agent
have entered into, or such Agent has arranged for the
Company to enter into, a contract with respect to the sale
of the currency (other than United States dollars) or
currency unit in which a Note has been denominated and the
purchase of which was solicited by such Agent, the
commission in United States dollars payable by the Company
to such Agent shall be based upon the same exchange rate set
forth in such contract.
The authorized denominations of Notes denominated in a
currency or currency unit other than United States dollars
shall be equivalent, as determined by the Market Exchange
Rate for such currency or currency unit on the business day
immediately preceding the date on which the offer for such
Notes is accepted, of U.S. $100,000 (rounded down to an
integral multiple of 10,000 units of such currency or
currency unit), and any larger amount. The authorized
denominations of Notes denominated in United States dollars
shall be U.S. $100,000 and any larger amount in integral
multiples of $1,000.
The "Market Exchange Rate" on a given date for a given
foreign currency means the noon buying rate in New York City
for cable transfers in such currency as certified for
customs purposes by the Federal Reserve Bank of New York on
such date; provided, however, that in the case of European
Currency Units, Market Exchange Rate means, unless otherwise
agreed by the Company and the Agents, the rate of exchange
determined by the Council of European Communities (or any
successor thereto) as published on such date or the most
recently available date in the Official Journal of the
European Communities (or any successor publication).
Unless otherwise agreed between the Company and each
Agent, each Agent shall communicate to the Company, orally
or in writing, each offer to purchase Notes received by it
as Agent other than those rejected by such Agent in
accordance herewith. The Company shall have the sole right
to accept offers to purchase Notes and may reject any
proposed purchase of Notes. Each Agent shall have the
right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes received by it, and any such
rejection by it shall not be deemed a breach of its
agreements contained herein.
(b) Each sale of Notes to any Agent as principal
shall be made in accordance with the terms of this Agreement
and (unless the Company and such Agent shall otherwise
agree) a Terms Agreement which will provide for the sale of
such Notes. Terms Agreements, each of which shall be
substantially in the form of Annex I hereto, may take the
form of an exchange of any standard form of written
telecommunication between any of you and the Company,
including by telecopy or telex. The Company and any Agent
who is a party to a Terms Agreement agree to exchange
executed copies of such Terms Agreement as promptly as
practicable after they have entered into such Terms
Agreement pursuant to the foregoing exchange of written
telecommunication. The Agents may utilize a selling or
dealer group in connection with the reoffering of the Notes
purchased as principal.
For each sale of Notes to an Agent as principal that is
not made pursuant to a Terms Agreement, the procedural
details relating to the issue and delivery of such Notes and
payment therefor shall be as set forth in the Procedure.
For each such sale of Notes to an Agent as principal that is
not made pursuant to a Terms Agreement, the Company agrees
to pay such Agent a commission (or grant an equivalent
discount) as provided in Section 2(a) and in accordance with
the schedule set forth therein, except as the parties
otherwise agree in writing.
Each time and date of delivery of and payment for Notes
to be purchased by an Agent as principal, whether set forth
in a Terms Agreement or in accordance with the Procedure, is
referred to herein as a "Time of Delivery."
(c) Procedural details relating to the issue and
delivery of Notes, the solicitation of offers to purchase
Notes, and the payment in each case therefor, shall be as
set forth in the Procedure. The provisions of the Procedure
shall apply to all transactions contemplated hereunder other
than those made pursuant to a Terms Agreement. Each of the
Agents and the Company agrees to perform the respective
duties and obligations specifically provided to be performed
by each of them in the Procedure. The Company will furnish
to the Trustee a copy of the Procedure as from time to time
in effect.
3. The documents required to be delivered pursuant to
Section 6 hereof shall be delivered at the offices of the
Company, Sears Tower, Chicago, Illinois, at 10:00 a.m.,
Chicago time, on the date of this Agreement, or at such
other date and time as you and the Company agree (such time
and date being referred to herein as the "Closing Date").
4. The Company covenants and agrees with each Agent:
(a) Prior to the termination of the offering of
the Notes, to make no amendment or supplement to the
Registration Statement or the Prospectus (except for a
Pricing Supplement or a supplement relating to an offering
of securities other than the Notes) without first having
furnished you with a copy of the proposed form thereof and
given you a reasonable opportunity to review the same; to
advise you promptly of any such amendment or supplement
after such Time of Delivery and furnish you with copies
thereof, to prepare, with respect to any Notes to be sold
through or to such Agent pursuant to this Agreement, a
Pricing Supplement with respect to such Notes in a form
previously approved by such Agent and to file such Pricing
Supplement pursuant to Rule 424(b)(2) under the Act not
later than the close of business of the Commission on the
fifth business day after the date on which such Pricing
Supplement is first used; and to file promptly all reports
and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to
Section 13 or 14 of the Exchange Act for so long as the
delivery of a prospectus is required in connection with the
offering or sale of the Notes, and during such same period
to advise you, promptly after the Company receives notice
thereof, of the time when any amendment to the Registration
Statement has been filed or has become effective or any
supplement to the Prospectus or any amended Prospectus
(other than any Pricing Supplement and any supplement
relating to any offering of securities other than the Notes)
has been filed with, or mailed for filing to, the
Commission, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of
any prospectus relating to the Notes, of the suspension of
the qualification of the Notes for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the
use of any such prospectus or suspending any such
qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) Promptly from time to time to take such
action as you reasonably may request to qualify the Notes
for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings
therein for as long as may be necessary to complete the
distribution or sale of the Notes provided that in
connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish you with copies of the
Registration Statement and each amendment thereto, and with
copies of the Prospectus as amended or supplemented, other
than any Pricing Supplement (except as provided in the
Procedure), in the form in which it is filed with the
Commission pursuant to Rule 424 under the Act, in such
quantities as you may from time to time reasonably request,
and, if the delivery of a prospectus is required at any time
in connection with the offering or sale of the Notes
(including Notes purchased from the Company by such Agent as
principal) and if at such time any event shall have occurred
as a result of which the Prospectus 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 when such
Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period
to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act
or the Trust Indenture Act, to (i) notify you to suspend
solicitation of offers to purchase Notes from the Company
(and, if so notified, you shall promptly cease such
solicitations), (ii) prepare and cause to be filed with the
Commission, after having furnished you with a copy of the
proposed form and given you a reasonable opportunity to
review the same, an amendment or supplement to the
Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or
effect such compliance and (iii) supply such Prospectus as
then amended or supplemented to you in such quantities as
you may reasonably request; if such amendment or supplement,
and any documents, certificates and opinions furnished to
you pursuant to Section 6 in connection with the preparation
or filing of such amendment or supplement are reasonably
satisfactory in all respects to you, you will, upon the
filing of such amendment or supplement with the Commission
and upon the effectiveness of an amendment to the
Registration Statement if such an amendment is required,
resume your obligation to solicit offers to purchase Notes
hereunder; if such amendment or supplement, or any
documents, certificates and opinions furnished to you
pursuant to Section 6 in connection with the preparation or
filing of such amendment or supplement, are not satisfactory
to you, you will as promptly as reasonably practicable
notify the Company in writing;
(d) To make generally available to its security
holders, in accordance with the provisions of Rule 158 under
the Act or otherwise, as soon as practicable, but in any
event not later than forty-five days after the end of the
fourth full fiscal quarter (ninety days in the case of the
last fiscal quarter in any fiscal year) following the fiscal
quarter ending after the effective date of the Registration
Statement and of the effective date of the post-effective
amendment thereto hereinafter referred to, an earning
statement of the Company and its consolidated subsidiaries
(which need not be audited) complying with Section 11(a) of
the Act and covering a period of at least twelve consecutive
months beginning (i) after the effective date of such
Registration Statement and (ii) after the date of the post-
effective amendment, if any, to such Registration Statement
(within the meaning of Rule 158);
(e) Except as may otherwise be specified in any
Terms Agreement, during the period beginning from the date
of any Terms Agreement and continuing to and including the
earlier of (i) the termination of the trading restrictions
for the Notes purchased thereunder, of which termination
such Agent or Agents party to the Terms Agreement agree to
give the Company prompt notice confirmed in writing and (ii)
the Time of Delivery for such Notes, not to offer, sell,
contract to sell or otherwise dispose of any debt securities
of the Company which (i) mature nine months or more after
such Time of Delivery, (ii) mature within six months of the
maturity of such Notes and (iii) are denominated in the same
currency or currency unit specified in the Terms Agreement,
without the prior written consent of such Agent or Agents,
which consent shall not be unreasonably withheld, except
pursuant to arrangements of which such Agent or Agents have
been advised by the Company prior to the time of execution
of such Terms Agreement, which advice is confirmed in
writing (which may be by telecopy or telex, receipt
acknowledged) to such Agent or Agents by the end of the
business day following the date of such Terms Agreement; and
(f) That each acceptance by the Company of an
offer to purchase Notes hereunder shall be deemed to be an
affirmation to such Agent that the representations and
warranties of the Company contained in or made pursuant to
this Agreement are true and correct as of the date of such
acceptance as though made at and as of such date, and an
undertaking that, if a settlement occurs with respect to
such acceptance, such representations and warranties will be
true and correct as of such settlement date as though made
at and as of such date (except that such representations and
warranties shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented
relating to such Notes).
5. The Company covenants and agrees with each Agent
that the Company will pay or cause to be paid, whether or
not any sale of Notes is consummated, the following: (i)
the fees and expenses of the Company's counsel and
accountants in connection with the registration of the Notes
under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus and
amendments and supplements thereto and the mailing and
delivering of copies thereof to you; (ii) the fees and
expenses of counsel for the Agents, which counsel has been
approved by the Company, incurred heretofore or hereafter in
connection with the transactions contemplated hereunder;
(iii) the cost of printing or reproducing this Agreement,
any Terms Agreement, any Indenture, any Blue Sky and Legal
Investment Memoranda and any other documents in connection
with the offering, purchase, sale and delivery of the Notes;
(iv) all expenses in connection with the qualification of
the Notes for offering and sale under state securities laws
as provided in Section 4(b) hereof, including fees and
disbursements of counsel for the Agents in connection with
such qualification and in connection with the Blue Sky and
legal investment surveys; (v) any fees charged by security
rating services for rating the Notes; (vi) any filing fees
incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the
Notes; (vii) the cost of preparing the Notes; (viii) the
fees and expenses of any Trustee and any transfer or paying
agent of the Company and the fees and disbursements of
counsel for any Trustee or such agent in connection with any
Indenture and the Notes; (ix) on a monthly basis all out-of-
pocket expenses (including without limitation advertising
expenses) incurred by such Agent connected with the
solicitation of offers to purchase and the sale of Notes so
long as such expenses have been approved by the Company; and
(x) all other costs and expenses incident to the performance
of the Company's obligations hereunder (other than costs and
expenses incurred by any Agent) which are not otherwise
specifically provided for in this Section 5.
6. The obligation of each Agent, as agent of the
Company, at any time ("Solicitation Time") to solicit offers
to purchase the Notes and the obligation of each Agent to
purchase Notes as principal pursuant to any Terms Agreement
or otherwise shall in each case be subject, in such Agent's
discretion, to the condition that all representations and
warranties and other statements of the Company herein are
true and correct at and as of the Closing Date, as of the
date of the effectiveness of any amendment to the
Registration Statement (including the filing of any document
incorporated by reference therein), as of the date any
supplement to the Prospectus is filed with the Commission,
as of any Time of Delivery, as of each acceptance by the
Company of an offer to purchase Notes hereunder and as of
each settlement date relating to such sale, the condition
that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following
additional conditions:
(a) No stop order suspending the effectiveness of
the Registration Statement shall have been issued and no
proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for
additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
(b) All corporate proceedings and related matters
in connection with the organization of the Company, the
validity of the Indenture and the registration,
authorization, issue, sale and delivery of the Notes shall
have been satisfactory to your counsel, and such counsel
shall have been furnished with such papers and information
as they may reasonably have requested to enable them to pass
upon the matters referred to in this Section 6(b);
(c) Counsel to the Company shall have furnished
to you such counsel's written opinion, dated the Closing
Date, each Time of Delivery and the date of effectiveness of
each amendment or the filing of each supplement to the
Registration Statement or the Prospectus (including the
filing under the Act or the Exchange Act of documents
incorporated by reference in the Prospectus as amended or
supplemented but excluding amendments or supplements (i)
relating to an offering of securities other than the Notes,
(ii) constituting a Pricing Supplement, (iii) setting forth
or incorporating by reference financial statements or other
information as of and for a fiscal quarter or (iv) relating
solely to the incorporation by reference of the Company's
proxy statement for its annual meeting of shareholders or of
a filing by the Company of a Current Report on Form 8-K
under the Exchange Act unless in the case of clauses (iii)
or (iv) above, in such Agent's reasonable judgment, such
financial statements or other information contained in such
documents are of such a character that an opinion of counsel
should be furnished), as the case may be, in form and
substance satisfactory to you in your reasonable judgement
to the effect that:
(i) The Company, SRAC, SRFG, SCCI, SCCII,
and SDCC have been duly incorporated and are validly
existing as corporations in good standing under the laws of
their respective states of incorporation;
(ii) The Company has authorized capital stock
as set forth in the Registration Statement, and all of the
outstanding capital stock of SRAC, SRFG, SCCI, SCCII, and
SDCC is owned by the Company;
(iii) Each of this Agreement and any
applicable Terms Agreement has been duly authorized,
executed and delivered on the part of the Company;
(iv) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture, this Agreement and any applicable
Terms Agreement will not (a) conflict with or result in any
breach which would constitute a material default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the
Company or any subsidiary thereof, material to the Company
and its subsidiaries (whether or not consolidated)
considered as a whole, pursuant to the terms of, any
indenture, loan agreement or other agreement or instrument
for borrowed money known to such counsel to which the
Company or any Designated Subsidiary is a party or by which
the Company or any Designated Subsidiary may be bound or to
which any of the property or assets of the Company or any
Designated Subsidiary, material to the Company and its
subsidiaries (whether or not consolidated) considered as a
whole, is subject, (b) result in any material violation of
the provisions of the Restated Certificate of Incorporation
or the By-Laws of the Company or (c) to the best of the
knowledge of such counsel, result in any material violation
of any statute or any order, rule or regulation applicable
to the Company of any court or any Federal, State or other
regulatory authority or other governmental body having
jurisdiction over the Company, other than the Act, the
Exchange Act, the Trust Indenture Act, and the rules and
regulations under each such act, and other than the
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Notes;
and, to the best knowledge of such counsel, no consent,
approval, authorization or other order of, or filing with,
any court or any such regulatory authority or other
governmental body is required for the issue and sale of the
Notes except as may be required under the Act, the Exchange
Act, the Trust Indenture Act and securities laws of the
various states or other jurisdictions which are applicable
to the issue and sale of the Notes;
(v) The Indenture has been duly authorized,
executed and delivered on the part of the Company and, as to
the Company, is a valid and binding instrument in accordance
with its terms except as the foregoing may be limited by
insolvency, bankruptcy, reorganization or other laws
relating to or affecting the enforcement of creditors'
rights or by general equity principles, and has been
qualified under the Trust Indenture Act; the Notes have been
duly authorized and (assuming due authentication by the
Trustee) when duly executed, issued and delivered pursuant
to the Indenture and any Terms Agreement, will constitute
valid and binding obligations of the Company in accordance
with their terms, entitled to the benefits of the Indenture,
except as the foregoing may be limited by insolvency,
bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general
equity principles;
(vi) Such counsel does not know of any
pending legal or governmental proceedings required to be
described in the Prospectus as amended or supplemented which
are not described as required;
(vii) Except for statements in such
documents which do not constitute part of the Registration
Statement or the Prospectus pursuant to Rule 412 of
Regulation C under the Act and after substituting therefor
any statements modifying or superseding such excluded
statements, the documents incorporated by reference in the
Prospectus as amended or supplemented (other than the
financial statements and related schedules, the analyses of
operations and financial condition and other financial,
statistical and accounting data therein, as to which such
counsel need express no opinion), when they became effective
or were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder;
(viii) Except for statements in such
documents which do not constitute part of the Registration
Statement or the Prospectus pursuant to Rule 412 of
Regulation C under the Act and after substituting therefor
any statements modifying or superseding such excluded
statements, the Registration Statement and the Prospectus as
amended or supplemented (excluding the documents
incorporated by reference therein) (other than the financial
statements and related schedules, the analyses of operations
and financial condition and other financial, statistical and
accounting data therein, as to which such counsel need
express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; the answers in the Registration
Statement to Items 9 and 10 (insofar as it relates to such
counsel) of Form S-3 are to the best of such counsel's
knowledge accurate statements or summaries of the matters
therein set forth and fairly present the information called
for with respect to those matters by the Act and the rules
and regulations thereunder; and
(ix) Such counsel does not know of any
contract or other document to which the Company or any
subsidiary thereof is a party required to be filed as an
exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Prospectus
as amended or supplemented which has not been so filed,
incorporated by reference or described.
In rendering such opinion, such counsel may rely
to the extent such counsel deems appropriate upon
certificates of officers or other executives of the Company,
its business groups and its subsidiaries and of public
officials as to factual matters and upon opinions of other
counsel. In rendering the opinion referred to in
subdivision (v) above, such counsel need not express an
opinion as to whether, with respect to any Notes denominated
in a currency other than United States dollars, a court
located in the United States of America would grant a
judgment relating to the Notes in other than United States
dollars, nor an opinion as to the date which any such court
would utilize for determining the rate of conversion into
United States dollars in granting such judgment. Such
counsel shall also state that: (a) nothing has come to such
counsel's attention which has caused such counsel to believe
that any of the documents referred to in subdivision (vii)
above (other than the financial statements, the analyses of
operations and financial condition and other financial,
statistical and accounting data therein, as to which such
counsel need express no belief), in each case after
excluding any statement in any such document which does not
constitute part of the Registration Statement or the
Prospectus as amended or supplemented pursuant to Rule 412
of Regulation C under the Act and after substituting
therefor any statement modifying or superseding such
excluded statement, when such documents became effective or
were filed, as the case may be, contained, in the case of
documents which became effective under the Act, an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of
documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances
under which they were made, not misleading, and (b) nothing
has come to such counsel's attention which has caused such
counsel to believe that the Registration Statement or
Prospectus as amended or supplemented (other than the
financial statements, the analyses of operations and
financial condition and other financial, statistical and
accounting data therein, as to which such counsel need
express no belief) contains an untrue statement of a
material fact or omits to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading;
(d) On the Closing Date, each Time of Delivery
and the date of effectiveness of each amendment or the
filing of each supplement to the Registration Statement or
the Prospectus setting forth or incorporating by reference
amended or supplemental financial information, as the case
may be, the independent certified public accountants who
have certified the financial statements of the Company and
its subsidiaries included or incorporated by reference in
the Registration Statement shall have furnished to you a
letter, dated the Closing Date or such applicable date, as
the case may be, in form and substance satisfactory to you,
to the effect set forth in Annex III hereto (modified in the
case of amended or supplemented financial information to
reflect such amended and supplemental financial information
included or incorporated by reference in the Registration
Statement and the Prospectus as amended or supplemented to
the date of such letter, provided that if the Registration
Statement or the Prospectus is amended or supplemented
solely to include or incorporate by reference unaudited
quarterly financial information, the scope of such letter,
which shall be satisfactory in form and substance to such
Agent, may be limited to relate to such unaudited financial
information unless any other accounting, financial or
statistical information included or incorporated by
reference therein is of a character that, in the reasonable
judgment of such Agent, such letter should address such
other information);
(e) (i) The Company and its subsidiaries
(whether or not consolidated) considered as a whole shall
not have sustained, after the date of the latest audited
financial statements included or incorporated by reference
in the Prospectus and (A) prior to the Closing Date, any
material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as
contemplated in the Prospectus as amended or supplemented
through the date of this Agreement and (B) prior to each
Time of Delivery, any such loss or interference, otherwise
than as set forth or contemplated in the Prospectus as
amended or supplemented through the date that the Agent
agreed to purchase such Notes as principal; and (ii) since
the respective dates as of which information is given in the
Prospectus as amended or supplemented and (A) prior to the
Closing Date, there shall not have been any material change
in the capital stock accounts or long-term debt of the
Company or any material adverse change in the general
affairs, financial position, shareholders' equity or results
of operations of the Company and its subsidiaries (whether
or not consolidated) considered as a whole, otherwise than
as set forth or contemplated in the Prospectus as amended or
supplemented through the date of this Agreement and (B)
prior to each Time of Delivery, there shall not have been
any such change, otherwise than as set forth or contemplated
in the Prospectus as amended or supplemented through the
date that the Agent agreed to purchase such Notes as
principal, the effect of which, in any such case described
in clause (i) or (ii), in the judgment of such Agent makes
it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Notes from
the Company or the purchase by such Agent of Notes from the
Company as principal, as the case may be;
(f) During the period in which you are soliciting
offers to purchase Notes, including the period between the
date that any Agent agrees to purchase Notes as principal
and the related Time of Delivery, no downgrading shall have
occurred in the rating accorded the Company's debt
securities by Moody's Investors Service, Inc. or Standard &
Poor's Corporation; provided, however, that this Section
6(f) shall not apply to any such rating agencies which shall
have notified the Company of the downgrading in the rating
of such debt securities and of which the Company shall have
given you written notice prior to the execution of the Terms
Agreement;
(g) During the period in which you are soliciting
offers to purchase Notes, including the period between the
date that any Agent agrees to purchase Notes as principal
and the related Time of Delivery, neither (i) the United
States shall have become engaged in the outbreak or
escalation of hostilities involving the United States or
there has been a declaration by the United States of a
national emergency or a declaration of war, (ii) a banking
moratorium shall have been declared by either Federal or New
York State authorities or, in the case of Notes denominated
in other than United States dollars, by the authorities of
the country of the currency in which such Notes are
denominated, (iii) trading in securities generally on the
New York Stock Exchange shall have been suspended nor
limited or minimum prices shall have been established by
such Exchange, nor (iv) in the case of Notes denominated in
other than United States dollars, any change involving such
currency exchange rates, exchange controls, taxation or
similar matters, any of which events, in your judgment,
renders it inadvisable to proceed with the solicitation by
you of offers to purchase Notes from the Company or the
purchase by you of Notes from the Company as principal, as
the case may be; and
(h) The Company shall have furnished or caused to
be furnished to you at the Closing Date, each Time of
Delivery and the date of effectiveness of each amendment or
the filing of each supplement to the Registration Statement
or the Prospectus (including the filing under the Act or the
Exchange Act of documents which are incorporated by
reference in the Prospectus as amended or supplemented but
excluding amendments or supplements (i) relating to an
offering of securities other than the Notes, (ii)
constituting a Pricing Supplement, or (iii) relating solely
to the incorporation by reference of the Company's proxy
statement for its annual meeting of shareholders or of a
filing by the Company of a Current Report on Form 8-K under
the Exchange Act, unless in the case of clause (iii) above,
in such Agent's reasonable judgment, the information
contained in such documents are of such a character that
certificates of officers referred to below should be
furnished), as the case may be, certificates of officers of
the Company satisfactory to you, as to the accuracy at and
as of the Closing Date or such applicable date, as the case
may be, of the representations, warranties and agreements of
the Company herein and as to the performance by the Company
of all its obligations hereunder to be performed at or prior
to the Closing Date or such applicable date, as the case may
be, and the Company shall have also furnished you similar
certificates satisfactory to you as to the matters set forth
in subdivision (a) of this Section 6.
7. (a) The Company will indemnify and hold harmless
each Agent against any losses, claims, damages or
liabilities, joint or several, to which such Agent may
become subject, under the 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 any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Prospectus as amended or
supplemented, or any amendment or supplement thereto
furnished by the Company, or arise out of or are based upon
the omission or alleged omission to state therein a material
fact required to be stated therein or (in the case of the
Registration Statement or the Prospectus as amended or
supplemented or any amendment or supplement thereto)
necessary to make the statements therein not misleading or
(in the case of any Preliminary Prospectus) necessary to
make the statements therein, in the light of the
circumstances under which they were made, not misleading;
and will reimburse each Agent for any legal or other
expenses reasonably incurred by such Agent in connection
with investigating or defending any such action or claim;
provided, however, that the Company shall 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 or omission or alleged
omission made in any Preliminary Prospectus, or the
Registration Statement, the Prospectus or the Prospectus as
amended or supplemented or any such amendment or supplement
in reliance upon and in conformity with written information
furnished to the Company by you expressly for use therein;
and provided, further, that the Company shall not be liable
to any Agent or any person controlling such Agent under the
indemnity agreement in this subdivision (a) with respect to
the Preliminary Prospectus or the Prospectus or the
Prospectus as amended or supplemented or any amendment or
supplement thereto, as the case may be, to the extent that
any such loss, claim, damage or liability of such Agent or
controlling person results solely from the fact that such
Agent sold Notes to a person to whom there was not sent or
given, at or prior to the written confirmation of such sale,
a copy of the Prospectus (excluding documents incorporated
by reference) or of the Prospectus as then amended or
supplemented (excluding documents incorporated by
reference), whichever is most recent, if the Company has
previously furnished copies thereof to such Agent.
(b) Each Agent will indemnify and hold harmless
the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under
the 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 any
Preliminary Prospectus, the Registration Statement, the
Prospectus, or the Prospectus as amended or supplemented, or
any amendment or supplement thereto, or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or (in
the case of the Registration Statement or the Prospectus or
the Prospectus as amended or supplemented or any amendment
or supplement thereto) necessary to make the statements
therein not misleading or (in the case of any Preliminary
Prospectus) necessary 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 any
Preliminary Prospectus or the Registration Statement or the
Prospectus or the Prospectus as amended or supplemented or
such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company
by such Agent expressly for use therein; and will reimburse
the Company for any legal or other expenses reasonably
incurred by the Company in connection with investigating or
defending any such action or claim.
(c) Within a reasonable period after receipt by
an indemnified party under subdivision (a) or (b) above of
notice of the commencement of any action with respect to
which indemnification is sought under such subdivision or
contribution may be sought under subdivision (d) below, such
indemnified party shall notify the indemnifying party in
writing of the commencement thereof. In case any such action
shall be brought against any indemnified party, the
indemnifying party shall be entitled to participate in, and,
to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable
costs of investigation.
(d) If the indemnification provided for in this
Section 7 is unavailable to an indemnified party under
subdivision (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
contributing Agent on the other from the offering of the
Notes and also the relative fault of the Company on the one
hand and the contributing Agent on the other in connection
with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the
Company on the one hand and the contributing Agent on the
other shall be deemed to be in the same proportion as the
total net proceeds from the sale of Notes (before deducting
expenses) received by the Company bear to the total
commissions or discounts received by the contributing Agent.
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 on the one hand or the contributing
Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct
or prevent such statement or omission of the Company on the
one hand and the contributing Agent on the other hand. With
respect to any Agent, such relative fault shall also be
determined by reference to the extent (if any) to which such
losses, claims, damages or liabilities (or actions in
respect thereof) with respect to any Preliminary Prospectus
result from the fact that such Agent sold Notes to a person
to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Prospectus
(excluding documents incorporated by reference) or of the
Prospectus as then amended or supplemented (excluding
documents incorporated by reference) if the Company has
previously furnished copies thereof to such Agent. The
Company and the contributing Agent agree that it would not
be just and equitable if contribution pursuant to this
subdivision (d) were determined by per capita allocation
(even if all Agents were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to
above in this subdivision (d). The amount paid or payable
by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof)
referred to above in this subdivision (d) shall be deemed to
include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the
provisions of this subdivision (d), no Agent shall be
required to contribute any amount in excess of the amount by
which the total price at which the Notes purchased by or
through such Agent were sold exceeds the amount of any
damages which such Agent has otherwise been required to pay
by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. The obligations of each of the Agents
under this subdivision (d) to contribute are several in
proportion to the respective purchases made by or through it
to which such loss, claim, damage or liability (or action in
respect thereof) relates and are not joint.
(e) The obligations of the Company under this
Section 7 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 Agent within the meaning of the Act; and each Agent's
obligations under this Section 7 shall be in addition to any
liability which such Agent may otherwise have and shall
extend, upon the same terms and conditions, to each officer
and director of the Company and to each person, if any, who
controls the Company within the meaning of the Act.
8. In soliciting offers to purchase Notes from the
Company and in performing the other obligations of such
Agent hereunder (other than in respect of any purchase by an
Agent as principal, pursuant to a Terms Agreement or
otherwise), each Agent is acting solely as agent for the
Company and not as principal. Each Agent will make
reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes
from the Company was solicited by such Agent and has been
accepted by the Company, but such Agent shall not have any
liability to the Company in the event such purchase is not
consummated for any reason. If the Company shall default on
its obligation to deliver Notes to a purchaser whose offer
it has accepted, the Company shall hold each Agent harmless
against any loss, claim or damage arising from or as a
result of such default by the Company.
9. The respective indemnities, agreements,
representations, warranties and other statements by any
Agent and the Company set forth in or made pursuant to this
Agreement shall remain in full force and effect regardless
of any investigation (or any statement as to the results
thereof) made by or on behalf of any Agent, the Company, or
any officer or director or any controlling person of the
Company or any Agent, and shall survive each delivery of and
payment for any of the Notes.
10. The provisions of this Agreement relating to the
solicitation of offers to purchase Notes from the Company
may be suspended or this Agreement may be terminated at any
time by the Company as to any or all Agents or by any Agent
insofar as this Agreement relates to such Agent upon the
giving of written notice of such suspension or termination
to such Agent or the Company, as the case may be. Unless
otherwise agreed by the respective parties, any such
suspension or termination shall be effective immediately
with respect to the party giving such notice and, in the
case of the party receiving such notice, at the close of
business on the first business day following the receipt of
such notice. In the event of such suspension or termination
with respect to any Agent, (x) this Agreement shall remain
in full force and effect with respect to any Agent as to
which such suspension or termination has not occurred, and
(y) the Company shall not have any liability to such Agent
and such Agent shall not have any liability to the Company,
except as provided in any Terms Agreements and in the fifth
paragraph of Section 2(a), Section 5, Section 7, Section 8
and Section 9.
11. Except as otherwise specifically provided herein
or in the Procedure, all statements, requests, notices and
advices hereunder shall be in writing, or by telephone if
promptly confirmed in writing, and if to an agent shall be
sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to such Agent at
the address or facsimile transmission number set forth in
the Appointment and Acceptance of Agent relating to the
appointment of such Agent, and if to the Company shall be
sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to the Company at
Sears Tower, Chicago, Illinois 60684, Attention: Senior Vice
President, General Counsel and Secretary, Facsimile
Transmission No. (312) 875-9851 with a copy to the Vice
President and Treasurer, Facsimile Transmission No. (312)
875-3690. Upon request of any party hereto, any statements,
requests, notices and advices transmitted by facsimile shall
be promptly followed by delivery of executed documents by
registered mail.
12. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent
and the Company, and to the extent provided in Section 7,
Section 8 and Section 9 hereof, the officers and directors
of the Company and any person who controls any Agent or the
Company, and their respective heirs, executors,
administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of
the Notes through or from any Agent hereunder shall be
deemed a successor or assign by reason merely of such
purchase.
13. Time shall be of the essence in this Agreement and
any Terms Agreement. As used herein, the term "business
day" shall mean any day when the office of the Commission in
Washington, D.C. is normally open for business.
14. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of
the State of New York.
15. This Agreement and any Terms Agreement may be
executed by any one or more of the parties hereto and
thereto in any number of counterparts, each of which shall
be an original, but all of such respective counterparts
shall together constitute one and the same instrument.
APPOINTMENT AND ACCEPTANCE OF AGENT
Each agent designated below is hereby appointed as an
Agent on the terms and conditions set forth in the
Distribution Agreement. Upon acceptance of such appointment
by signing and returning to us three counterparts hereof,
the Distribution Agreement shall constitute a binding
agreement between the Company, Sears and each such Agent in
accordance with its terms.
SEARS, ROEBUCK AND CO.
By:
_____________________________
Agents Designated Hereby:
Accepted in New York, New York, as of the date set forth on
the first page of the Distribution Agreement:
______________________________________________
<PAGE>
ANNEX I
Sears, Roebuck and Co.
$ Medium Term Notes Series
TERMS AGREEMENT
______________________________
______________________________
______________________________
, 199
Dear Sirs
Sears, Roebuck and Co. (the "Company") proposes,
subject to the terms and conditions stated herein and in the
Distribution Agreement, dated , 1995 (the
"Distribution Agreement"), between the Company on the one
hand and the Agents thereunder on the other, to issue and
sell to you the securities specified in the Schedule hereto
(the "Purchased Notes"). Each of the provisions of the
Distribution Agreement not specifically related to the
solicitation by such firms, as agents of the Company, of
offers to purchase Notes is incorporated herein by reference
in its entirety, and shall be deemed to be part of this
Agreement to the same extent as if such provisions had been
set forth in full herein, provided that for purposes of this
Agreement all references in the Distribution Agreement to
"you" or "Agents" shall be deemed to refer to you alone.
Nothing contained herein or in the Distribution Agreement
shall make any party hereto an agent of the Company or make
such party subject to the provisions in the Distribution
Agreement relating to the solicitation of offers to purchase
securities from the Company, solely by virtue of its
execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be
deemed to have been made at and as of the date of this Terms
Agreement, except that each representation and warranty in
Section 1 of the Distribution Agreement which makes
reference to the Prospectus shall be deemed to be a
representation and warranty as of the date of the
Distribution Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as
of the date of this Terms Agreement in relation to the
Prospectus as amended and supplemented to relate to the
Purchased Notes. Unless otherwise defined herein, terms
defined in the Distribution Agreement are used herein as
therein defined.
An amendment to the Registration Statement, or a
supplement to the Prospectus, as the case may be, relating
to the Purchased Notes, in the form heretofore delivered to
you is now proposed to be filed with, or in the case of a
supplement, mailed for filing to, the Commission.
Subject to the terms and conditions set forth herein
and in the Distribution Agreement incorporated herein by
reference, the Company agrees to issue and sell to you and
you agree to purchase from the Company the Purchased Notes,
at the time and place, in the principal amount and at the
purchase price set forth in the Schedule hereto.
If the foregoing is in accordance with your
understanding, please sign and return to us
counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including those
provisions of the Distribution Agreement incorporated herein
by reference, shall constitute a binding agreement between
you and the Company.
SEARS, ROEBUCK AND CO.
By:
Accepted:
[__________________________________________
By: ]
<PAGE>
SCHEDULE TO ANNEX I
Title of Purchased Notes:
[Medium-Term Notes]
[ % Notes due ]
Aggregate Principal Amount:
[$ or units of other Specified Currency]
[Currency Swap or Forward Arrangements:]
[Price to Public:]
Purchase Price by :
% of the principal amount of the Purchased Notes [,
plus accrued interest from to ] [and
accrued amortization, from to
]
Specified Funds for Payment of Purchase Price:
same day funds
Indenture:
Indenture, dated as of , as
supplemented to the date hereof, between the Company and
, as Trustee
Form of Purchased Notes:
[Certificated form only] [Global form only]
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %] [Specify floating rate provisions, if any]
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(1) The opinion referred to in Section 6(c).]
[(2) The accountants' letter referred to in Section
6(d).]
[(3) The officers' certificate referred to in Section
6(h).]
Lock-Out Provisions:
[Describe modifications, if any, to the lock-out
provisions set forth in Section 4(e) of the Distribution
Agreement.]
Syndicate Provisions:
[Set forth any provisions relating to underwriters'
default and step-up of amounts to be purchased by
underwriters acting with
]
<PAGE>
ANNEX II
Sears, Roebuck and Co.
ADMINISTRATIVE PROCEDURE
Medium-term notes (the "Notes") in the aggregate
principal amount of up to $ are to be offered from
time to time by Sears, Roebuck and Co. (the "Company")
through agents of the Company (together, in such capacity,
the "Agents"). Each Agent has agreed to use its reasonable
efforts to solicit offers to purchase Notes directly from
the Company (an Agent, in relation to a purchase of a
particular Note by a purchaser solicited by such Agent,
being herein referred to as the "Selling Agent") and may
also purchase Notes from the Company as principal (an Agent,
in relation to a purchase of a Note by such Agent as
principal other than pursuant to a Terms Agreement being
herein referred to as the "Purchasing Agent"). The Notes
are being sold pursuant to a Distribution Agreement, dated
(the "Distribution Agreement"), between the
Company and the Agents, to which this Administrative
Procedure is attached as Annex II.
The Notes will be issued pursuant to an Indenture,
dated as of (the "Indenture"), between the
Company and , as Trustee (the "Trustee").
Unless otherwise defined herein, terms defined in the
Indenture or the Notes shall be used herein as therein
defined.
In the case of purchases of Notes by any agent, as
principal, the relevant terms and settlement details related
thereto, including the Time of Delivery referred to in the
first paragraph of Section 6, will (unless the Company and
such Agent otherwise agree) be set forth in a Terms
Agreement entered into between such Agent and the Company
pursuant to the Distribution Agreement.
The procedures to be followed during, and the specific
terms of, the solicitation of offers by the Agents and the
sale as a result thereof by the Company are explained below.
The procedures are subject, and are qualified in their
entirety by reference, to all of the respective provisions
of the Distribution Agreement and the Indenture.
The Company will advise each Agent in writing of those
persons handling administrative responsibilities
("Designated Persons") with whom such Agent is to
communicate regarding offers to purchase Notes and the
details of their delivery.
I. General Procedures
Registration: Notes will be issued only in fully
registered form and will be either (a) Book-Entry Notes
represented by one or more global notes (each a "Global
Note") held by the Trustee, as agent for The Depository
Trust Company ("DTC") and recorded in the book-entry system
maintained by DTC or (b) Certificated Notes delivered in
certificated form to the Selling Agent or Purchasing Agent.
All Notes will be issued as Book-Entry Notes except as
otherwise approved in advance by the Company and except that
non-U.S. dollar denominated Notes will be issued as
Certificated Notes only unless otherwise specified in a
Prospectus Supplement or Pricing Supplement.
Maturities: Each Note will mature on a date,
selected by the purchaser and agreed to by the Company,
which will be at least nine months from the date of original
issuance by the Company of such Note (the "Settlement
Date").
Price to Public: Each Note will be issued at the
percentage of principal amount specified in the Prospectus
(as defined in Section 1(a) of the Distribution Agreement)
relating to the Notes.
Currencies: Notes will be denominated in U.S.
dollars or in such other currency or currency unit as is
specified in the Prospectus (the "Specified Currency").
Denominations: The denomination of any Book-Entry,
Global or Certificated Note will be a minimum of U.S.
$100,000 or any amount in excess thereof in integral
multiples of $1,000 or the equivalent, as determined
pursuant to the provisions of the Indenture, of U.S.
$100,000 (rounded down to an integral multiple of 10,000
units of such Specified Currency) and any amounts in excess
thereof.
Interest Payments: As specified in the Indenture and the
Form of Note.
Acceptance of
Offers: Each Agent will promptly advise the
Company by telephone or other appropriate means of offers to
purchase Notes received by it other than those rejected by
such Agent. Each Agent may, in its discretion reasonably
exercised, reject any offer received by it. Each Agent also
may make offers to the Company to purchase Notes as a
Purchasing Agent in accordance with Section 2(b) of the
Distribution Agreement. The Company will have the sole
right to accept offers to purchase Notes and may reject any
such offer.
If the Company accepts an offer to purchase Notes,
it will confirm such acceptance in writing to the Selling
Agent or Purchasing Agent, as the case may be. If the
Company rejects an offer, it will promptly notify the Agent
involved.
Filing and Delivery
of Prospectus: If the Company accepts an offer to
purchase a Note, the Company will prepare a Pricing
Supplement reflecting the terms of such Note and will
arrange to have such Pricing Supplement filed with the
Securities and Exchange Commission (the "Commission") as
soon as practicable after the preparation thereof and will
supply at least one such Pricing Supplement to the Selling
Agent or the Purchasing Agent, as the case may be, not later
than 5:00 p.m., New York City time, on the Business Day
following the date of acceptance of such offer.
With respect to each Note sold pursuant to the
Distribution Agreement, the Selling Agent shall send a copy
of the Prospectus as most recently amended or supplemented
(together with the Pricing Supplement relating to such Note)
to the purchaser or its agent prior to or together with the
delivery of (a) the written confirmation of sale (including,
in the case of a book-entry security, the confirmation
through DTC's Institutional Delivery System) or (b) the
delivery of such Note, whichever is earlier.
Confirmation: For each offer accepted by the Company,
the Selling Agent will issue a written confirmation to each
purchaser containing the Sale Information (as defined
below), plus delivery and payment instructions.
Currency Swaps: Unless otherwise requested by the
Company, each time an Agent advises the Company of an offer
to purchase Notes denominated in a currency or currency unit
other than U.S. dollars, such Agent will provide the Company
information with respect to currency swap or forward
arrangements that, as of the time the offer is communicated
to the Company, such Agent is prepared to enter into or
arrange with a third party to enter into in order to
exchange amounts to be received from the purchaser of such
Note at the Settlement Date and to exchange amounts to be
paid by the Company on the interest payment dates and at
maturity.
Settlement--
Sales as Principal:In the event of a purchase of Notes by
an Agent or Agents, as principal or underwriter (other than
as Purchasing Agent), appropriate settlement details will be
set forth in the applicable Terms Agreement to be entered
into between such Agent or Agents and the Company pursuant
to the Distribution Agreement.
Settlement--
Sales as Agent: All offers solicited by the Agents and
accepted by the Company will be settled on the third
Business Day (as defined below) after the date of acceptance
unless otherwise agreed by the purchaser and the Company and
the Settlement Date shall be specified upon acceptance of
such offer. The term "Business Day" means a Monday,
Tuesday, Wednesday, Thursday or Friday on which commercial
banks in New York City and, (i) if the Note is denominated
in a currency other than U.S. dollars, in the principal
financial center of the country of the Specified Currency,
or (ii) if the Note is denominated in European Currency
Units, in Brussels, are not required or authorized to be
closed.
Communication of Sale
Information to the
Company by Selling
Agent: For each offer accepted by the Company,
the Selling Agent or Purchasing Agent, as the case may be,
will provide (unless provided by the purchaser directly to
the Company) to a Designated Person by facsimile
transmission or other acceptable means the following
information (the "Sale Information"):
(1) If a Certificated Note, exact name of the
registered owner,
(2) If a Certificated Note, exact address of the
registered owner,
(3) If a Certificated Note, taxpayer
identification number of the registered owner (if
available),
(4) If a Book-Entry Note, the DTC Participant
Number of the institution through which the customer will
hold the beneficial interest in the Global Note,
(5) Principal amount of the Note,
(6) Date of Note,
(7) If a Fixed Rate Note, the interest rate,
(8) Settlement Date,
(9) Maturity date,
(10) Currency or currency unit in which the Note
is to be denominated and, if other than U.S. dollars, the
applicable Exchange Rate for such currency or currency unit,
(11) Indexed Currency, the Base Rate and the
Exchange Rate Determination Date, if applicable,
(12) Issue Price,
(13) Selling Agent's commission or Purchasing
Agent's discount, as the case may be (to be paid upon
settlement as a discount from gross proceeds of sale except
as provided below under "Delivery of Notes and Cash
Payment"),
(14) Net proceeds to the Company,
(15) If a redeemable Note with a Redemption
Commencement Date, such of the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii)Amount (% of par) that the Redemption
Price shall decline (but not below par) on each anniversary
of the Redemption Commencement Date,
(16) If a redeemable Note with a Redemption Date
or Redemption Dates, such of the following as are
applicable:
(i) the Redemption Date or Redemption Dates,
(ii) whether the Note is redeemable at the
option of the Company or the Holder or both,
(iii)the Redemption Price (% of par) on each
Redemption Date,
(iv) the notice period during which the
option to redeem may be exercised, and
(v) the method by which notice of redemption
is to be given,
(17) If a Floating Rate Note, such of the
following as are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii)Spread,
(iv) Spread Multiplier,
(v) Maximum Rate,
(vi) Minimum Rate,
(vii)Initial Interest Determination Date,
(viii)Interest Reset Dates,
(ix) Calculation Dates,
(x) Interest Determination Dates, and
(xi) Calculation Agent,
(18) Interest Payment Dates,
(19) Regular Record Dates,
(20) Denomination of certificates to be delivered
at settlement,
(21) That the Note is a Certificated Note (if
applicable),
(22) To the extent known to the Agent, any
information not otherwise expressly set forth in the
Prospectus Supplement which is required pursuant to Items
501(c)(7) or 508 of Regulation S-K promulgated by the
Commission, in writing expressly for use in the applicable
Pricing Supplement, including without limitation the initial
public offering price of the Notes, if other than 100% of
the principal amount, and
(23) If an Agent purchases Notes as a principal,
the extent, if any, to which the items specified in Sections
6(c), 6(d) and 6(h) of the Distribution Agreement are
required to be furnished as of the Time of Delivery.
In addition, the Selling Agent will use its
reasonable efforts to provide in writing the following
information to the Company and the Trustee:
(24) One of the following:
a. In the case of a foreign registered
owner (other than a Financial Institution (as defined
below)), an IRS Form W-8 that has been duly and properly
signed by the registered owner.
b. In the case of a registered owner which
is a Financial Institution, a statement from the Financial
Institution signed under penalties of perjury stating that
the Financial Institution has received from the beneficial
owner an IRS Form W-8 that has been duly and properly signed
by the registered owner together with a copy of such Form W-
8.
c. In the case of a registered owner who is
a United States person, an IRS Form W-9 that has been duly
and properly signed by the registered owner.
A "Financial Institution" is a securities clearing
organization, a bank, or another financial institution that
holds customers' securities in the ordinary course of its
trade or business which holds a Note for a beneficial owner
who is a foreign person.
After receiving the Sale Information the Company will,
after recording the Sale Information and any necessary
calculations, provide appropriate documentation to the
Trustee necessary for the preparation, authentication and
delivery of such Note.
Change in Interest
Rate, Maturity or
Currency Denomination:The Company and the Agents will
discuss from time to time the rates of interest per annum to
be borne by, and the maturity and currency denomination of,
Notes that may be sold as a result of the solicitation of
offers by the Agents.
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to
suspend solicitation of offers to purchase Notes at any
time, whereupon the Agents will as promptly as possible (but
in any event not later than one business day after receipt
of such instruction) suspend solicitation until such time as
the Company has advised the Agents that solicitation of
offers to purchase Notes may be resumed. If the Company
proposes to amend or supplement the Registration Statement
or the Prospectus relating to the Notes (except in the case
of a Pricing Supplement), it will promptly advise the Agents
and will furnish to the Agents such proposed amendment or
supplement and, after the Agents have been afforded a
reasonable opportunity to review such amendment or
supplement, will cause such amendment or supplement to be
filed with the Commission. The Company will promptly
provide the Agents with copies of any such amendment or
supplement and confirm to the Agents that such amendment or
supplement has been filed with the Commission.
In the event that at the time the Agents suspend
solicitation of offers to purchase Notes there shall be any
outstanding offers to purchase Notes that have been accepted
by the Company but for which settlement has not occurred,
the Company, consistent with its obligations under the
Distribution Agreement, promptly will advise the Agents
whether such sales may be settled and whether copies of the
Prospectus as supplemented at the time of the suspension may
be delivered in connection with the settlement of such
sales. The Company will have the sole responsibility for
such decision and for any arrangements which may be made in
the event that the Company determines that such sales may
not be settled or that copies of such Prospectus may not be
so delivered.
Authenticity of
Signatures: The Trustee will furnish the Agents from
time to time with the specimen signatures of each of the
Trustee's officers, employees or agents who have been
authorized by the Trustee to authenticate Notes, but the
Agents will have no obligation or liability to the Company
or the Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the Company
or the Trustee on any Note.
Advertising Cost: The Company will determine with the
Agents the amount of advertising that may be appropriate in
the solicitation of offers to purchase the Notes.
Advertising expenses will be paid by the Company.
II. Book-Entry Procedures
In connection with the qualification of Book-Entry
Notes for eligibility in the book-entry system maintained by
DTC, the Trustee will perform the custodial, document
control and administrative functions described below, in
accordance with its obligations under a Letter of
Representations from the Company and the Trustee to DTC, to
be dated as of (the "Letter of
Representations"), and a Medium-Term Note Certificate
Agreement, dated between the Trustee and DTC
(the "Certificate Agreement"), and the Trustee's obligations
as a participant in DTC including DTC's Same-Day Funds
Settlement System ("SDFS").
Issuance: All Fixed Rate Notes which have the same
original issue date, redemption or repayment provisions,
Interest Payment Dates, Regular Record Dates, interest rate,
Specified Currency and maturity date (collectively, the
"Fixed Rate Terms") will be represented initially by a
single Global Note in fully registered form without coupons.
All Floating Rate Notes which have the same
original issue date, redemption or repayment provisions,
Interest Payment Dates, Regular Record Dates, Interest Rate
Basis, Interest Determination Dates, Interest Reset Dates,
Calculation Dates, Index Maturity, Spread or Spread
Multiplier, if any, Minimum Rate, if any, Maximum Rate, if
any, Specified Currency and maturity date (collectively, the
"Floating Rate Terms") will be represented initially be a
single Global Note in fully registered form without coupons.
Identification: The Company has received from the CUSIP
Service Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") a series of approximately 900 CUSIP numbers
for future assignment to Global Notes, and the Company has
delivered to the Trustee and DTC such list of such CUSIP
numbers. The Trustee will assign CUSIP numbers to Global
Notes as described below. DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that have been
assigned to Global Notes. The Trustee will notify the
Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Notes, and, if it
deems necessary, the Company will reserve additional CUSIP
numbers for assignment to Global Notes. Upon obtaining such
additional CUSIP numbers, the Company will deliver a list of
such additional numbers to the Trustee and DTC.
Registration: Each Global Note will be registered in
the name of Cede & Co., as nominee for DTC, on the Security
Register maintained under the Indenture. The beneficial
owner of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will designate
one or more participants in DTC (the "Participants") to act
as agent or agents for such owner in connection with the
book-entry system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions provided by
such Participants, a credit balance with respect to such
Book-Entry Note in the account of such Participants. The
ownership interest of such beneficial owner in such Book-
Entry Note will be recorded through the records of such
Participants or through the separate records of such
Participants and one or more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Book-Entry Note.
Exchanges: The Trustee, at the Company's request,
may deliver to DTC and the CUSIP Service Bureau at any time
a written notice of consolidation specifying (a) the CUSIP
numbers of two or more outstanding Global Notes having the
same Fixed Rate Terms or Floating Rate Terms, as the case
may be (except that original issue dates need not be the
same), and for which interest has been paid to the same
date; (b) a date, occurring at least 30 days after such
written notice is delivered and at least 30 days before the
next Interest Payment Date for the related Book-Entry Notes,
on which such Global Notes shall be exchanged for a single
replacement Global Note; and (c) a new CUSIP number to be
assigned to such replacement Global Note. Upon receipt of
such a notice, DTC will send to its participants (including
the Trustee) a written reorganization notice to the effect
that such exchange will occur on such date.
Prior to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau written notice
setting forth such exchange date and the new CUSIP number
and stating that, as of such exchange date, the CUSIP
numbers of the Global Notes to be exchanged will no longer
be valid.
On the specified exchange date, the Trustee will
exchange such Global Notes for a single Global Note bearing
the new CUSIP number. The CUSIP numbers of the exchanged
Global Notes will, in accordance with CUSIP Service Bureau
procedures, be cancelled and not immediately reassigned.
Notwithstanding the foregoing, if the Global Notes
to be exchanged exceed $150,000,000 in aggregate principal
amount, one replacement Global Note will be authenticated
and issued to represent each $150,000,000 of principal
amount of the exchanged Global Notes and an additional
Global Note will be authenticated and issued to represent
any remaining principal amount of such Global Notes, subject
to the minimum denomination restrictions described in
General Procedures - Denominations (see "Denominations"
below).
Denominations: Global Notes representing Book-Entry
Notes will be denominated in principal amounts not in excess
of $150,000,000. If one or more Book-Entry Notes having an
aggregate principal amount in excess of $150,000,000 would,
but for the preceding sentence, be represented by a single
Global Note, then one Global Note will be issued to
represent each $150,000,000 principal amount of such Book-
Entry Note or Book-Entry Notes and an additional Global Note
will be issued to represent any remaining principal amount
of such Book-Entry Note or Book-Entry Notes, subject to the
minimum denomination restrictions described in General
Procedures - Denominations. In such a case, each of the
Global Notes representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
Interest: DTC will arrange for each pending
deposit message described under Settlement Procedure B below
to be transmitted to Standard & Poor's Corporation, which
will use the message to include certain terms of the related
Global Note in the appropriate daily bond report published
by Standard & Poor's Corporation.
Payments of Principal,
Premium, if any,
and Interest: Payments of Interest Only. Promptly
after each Regular Record Date (or as soon thereafter as
such information is determined), the Trustee will deliver to
the Company and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each Global Note
on the following Interest Payment Date (other than an
Interest Payment Date coinciding with the Maturity) and the
total of such amounts. DTC will confirm the amount payable
on each Global Note on such Interest Payment Date by
reference to the daily bond reports published by Standard &
Poor's Corporation. On such Interest Payment Date, the
Company will pay to the Trustee, and the Trustee in turn
will pay to DTC, such total amount of interest due (other
than at Maturity), at the times and in the manner set forth
below under "Manner of Payment."
Payments at Maturity. On or about the first Business Day of
each month (or as soon thereafter as such information is
determined), the Trustee will deliver to the Company and DTC
a written list of principal, premium, if any, and interest
to be paid on each Global Note maturing or subject to
redemption in the following month. The Trustee, the Company
and DTC will confirm the amounts of such principal, premium
(if any) and interest payments with respect to each such
Global Note on or about the fifth Business Day preceding the
maturity date of such Global Note. At such maturity date,
the Company will pay to the Trustee, and the Trustee in turn
will pay to DTC, the principal of and premium, if any, on
such Global Note, together with interest due at such
maturity date, at the times and in the manner set forth
below under "Manner of Payment." Promptly after payment to
DTC of the principal, premium, if any, and interest due at
maturity of all Book-Entry Notes represented by a particular
Global Note, the Trustee will cancel such Global Note, make
appropriate entries in its records and dispose of such
Global Note as provided in the Indenture.
Manner of Payment. The total amount of any principal,
premium and interest due on Global Notes on any Interest
Payment Date or at maturity shall be paid by the Company to
the Trustee in funds immediately available for use by the
Trustee as of noon, New York City time, on such date. The
Company will make such payment on such Global Notes by wire
transfer to the Trustee or by instructing the Trustee to
withdraw funds from an account maintained by the Company at
the Trustee. The Company will confirm any such instructions
in writing to the Trustee. For maturity, redemption and
other principal payments, prior to 1:00 p.m., New York City
time, on each such date or as soon as possible thereafter
following receipt of such funds from the Company, the
Trustee will pay by separate wire transfer (using Fedwire
message entry instructions in a form previously specified by
DTC) to an account at the Federal Reserve Bank of New York
previously specified by DTC, in funds available for
immediate use by DTC, each payment of interest, principal
and premium, if any, due on Global Notes on such date; and
for interest payments, the Trustee will pay DTC in same day
funds on the Interest Payment Date in accordance with
existing arrangements between the Trustee and DTC.
Thereafter on each such date, DTC will pay, in accordance
with its SDFS operating procedures then in effect, such
amounts in funds available for immediate use to the
respective Participants with payments in amounts
proportionate to their respective holdings in principal
amount of beneficial interest in such Global Note as are
recorded in the book-entry system maintained by DTC. Once
payment has been made to DTC, neither the Company nor the
Trustee shall have any responsibility or liability for the
payment by DTC of the principal of, or premium, if any, or
interest on, the Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a
Book-Entry Note will be determined and withheld by the
Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly
to the beneficial owner of such Book-Entry Note, or as
applicable law may otherwise require.
Settlement Procedures:Settlement Procedures with regard to
each Book-Entry Note sold by each Agent will be as follows:
A. Upon receiving the Sale Information, the
Company will, as soon as practicable, advise the Trustee by
facsimile transmission of the Sale Information and the name
of such Agent.
B. The Trustee will assign a CUSIP number to the
Global Note representing such Book-Entry Note and will
communicate to DTC and the Agent through DTC's Participant
Terminal System, a pending deposit message specifying such
of the following Settlement information as applicable:
1. The following information:
(a) Principal amount of the purchase.
(b) In the case of a Fixed Rate Note,
the interest rate, or, in the case of a Floating Rate Note,
the initial interest rate, the Interest Reset Dates, the
Interest Payment Dates, the Interest Rate Basis, Index
Maturity, Spread or Spread Multiplier, if any, and the
Minimum Rate and Maximum Rate, if any.
(c) Settlement date.
(d) Maturity date.
(e) Price.
(f) DTC Participant Number of the
institution through which the customer will hold the
beneficial interest in the Global Note.
2. The numbers of the participant accounts
maintained by DTC on behalf of the Trustee and the Agent.
3. Identification as a Fixed Rate Note or a
Floating Rate Note.
4. The initial Interest Payment Date for
such Note, number of days by which such date succeeds the
related DTC record date (which term means the Regular Record
Date, or in the case of Floating Rate Notes which reset
weekly, the date five calendar days immediately preceding
the applicable Interest Payment Date) and, for Fixed Rate
Notes, the amount of interest payable on such Interest
Payment Date per $1,000 principal amount of Note.
5. The frequency of interest payments.
6. The frequency of interest rate resets.
7. The CUSIP number of the Global Note
representing such Book-Entry Notes.
8. Whether such Global Note represents any
other Book-Entry Notes issued or to be issued.
The Trustee will also orally notify the Agent of
the CUSIP number assigned to the Global Note.
C. The Trustee will prepare a Global Note
representing such Book-Entry Note in a form that has been
approved by the Company.
D. The Trustee will authenticate the Global Note
representing such Book-Entry Note and maintain possession of
such Global Note.
E. DTC will credit such Book-Entry Note to the
participant account of the Trustee maintained by DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC to
(i) debit such Book-Entry Note to the Trustee's participant
account and credit such Book-Entry Note to the participant
account of the Agent maintained by DTC and (ii) debit the
settlement account of the Agent and credit the settlement
account of the Trustee maintained by DTC, in an amount equal
to the price of such Book-Entry Note less the Agent's
commission. The entry of such a deliver order shall be
deemed to constitute a representation and warranty by the
Trustee to DTC that (a) the Global Note representing such
Book-Entry Note has been issued and authenticated and (b)
the Trustee is holding such Global Note pursuant to the
Certificate Agreement.
G. The Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC to
(i) debit such Book-Entry Note to the Agent's participant
account and credit such Book-Entry Note to the participant
accounts of the Participants to whom such Book-Entry Note is
to be credited maintained by DTC and (ii) debit the
settlement accounts of such Participants and credit the
settlement account of the Agent maintained by DTC, in an
amount equal to the initial public offering price of the
Book-Entry Note so credited to their accounts.
H. Transfers of funds in accordance with SDFS
deliver orders described in Settlement Procedures F and G
will be settled in accordance with SDFS operating procedures
in effect on the Settlement Date.
I. The Trustee will credit to an account of the
Company maintained at funds available for
immediate use in an amount equal to the amount credited to
the Trustee's DTC settlement account in accordance with
Settlement Procedure F.
J. The Agent will confirm the purchase of each
Book-Entry Note to the purchaser thereof either by
transmitting to the Participant to whose account such Note
has been credited a confirmation order through DTC's
Participant Terminal System or by mailing a written
confirmation to such purchaser. In all cases the Prospectus
as most recently amended or supplemented (including the
applicable Pricing Supplement) must accompany or precede
such confirmation.
Settlement Procedures
Timetable: For offers accepted by the Company,
Settlement Procedures A through J shall occur no later than
the respective times (New York City time) listed below:
Settlement
Procedure Time
A 11:00 a.m. on the second Business Day following
the date of acceptance.
B 2:00 p.m. on the second Business Day following
the date of acceptance.
C 5:00 p.m. on the Business Day before settlement.
D 9:00 a.m. on the Settlement Date.
E 10:00 a.m. on the Settlement Date.
F-G 2:00 p.m. on the Settlement Date.
H 4:45 p.m. on the Settlement Date.
I-J 5:00 p.m. on the Settlement Date.
NOTE: If a sale is to be settled in less than four
Business Days after the date of acceptance, Settlement
Procedures A and B shall be completed as soon as practicable
but no later than 11:00 a.m. and 2:00 p.m., respectively, on
the Business Day before Settlement Date. If the Initial
Interest Rate for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement Procedure A is
completed, Settlement Procedures B and C shall be completed
as soon as such rate has been determined.
Settlement Procedure H is subject to extension in
accordance with any extension Fedwire closing deadlines and
in the other events specified in the SDFS operating
procedures in effect on the Settlement Date.
If Settlement of a Book-Entry Note is rescheduled or
cancelled, the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to such
effect by no later than 2:00 p.m., New York City time, on
the Business Day immediately preceding the scheduled
Settlement Date.
Failures: If the Trustee has not entered an SDFS
deliver order with respect to a Book-Entry Note pursuant to
Settlement Procedure F (which may be evidenced by facsimile
transmission), the Trustee, at the Company's direction,
shall deliver to DTC, through DTC's Participant Terminal
System, as soon as practicable, but no later than 2:00 p.m.
on any business day, a withdrawal message instructing DTC to
debit such Book-Entry Note to the participant account of the
Trustee maintained at DTC. DTC will process the withdrawal
message, provided that such participant account contains a
principal amount of the Global Note representing such Book-
Entry Note that is at least equal to the principal amount of
such Book-Entry Note to be debited. If withdrawal messages
are processed with respect to all the Book-Entry Notes
issued or to be issued represented by a Global Note, the
Trustee will void such Global Note, make appropriate entries
in its records and, unless otherwise directed by the
Company, destroy the Certificate. The CUSIP number assigned
to such Global Note shall, in accordance with CUSIP Service
Bureau procedures, be cancelled and not immediately
reassigned. If withdrawal messages are processed with
respect to a portion of the Book-Entry Notes represented by
a Global Note, the Trustee will exchange such Global Note
for two Global Notes, one of which shall represent such
Book-Entry Notes (which shall be cancelled immediately after
issuance), and the other of which shall represent the
remaining Book-Entry Notes previously represented by the
surrendered Global Note and shall bear the CUSIP number of
the surrendered Global Note. If the purchase price for any
Book-Entry Note is not timely paid to the Participants with
respect to such Note by the beneficial purchaser (other than
a Purchasing Agent) thereof (or a person, including an
indirect participant in DTC, acting on behalf of such
purchaser), such Participants and, in turn, the related
Agent may enter SDFS deliver orders through DTC's
Participant Terminal System debiting such Note free to such
Agent's Participant Account and crediting such Note free to
the Participant Account of the Trustee and shall notify the
Trustee and the Company thereof. Thereafter, the Trustee,
(i) will immediately notify the Company, once the Trustee
has confirmed that such Note has been credited to its
Participant Account, and the Company shall transfer by Fed
wire (immediately available funds) to such Agent an amount
equal to the price of such Note which was previously sent by
wire transfer to the account of the Company maintained at
in accordance with settlement procedure I, and (ii)
the Trustee will deliver the withdrawal message and take the
related actions described in the preceding sentences of this
paragraph. Such debits and credits will be made on the
settlement date, if possible, and in any event not later
than 5:00 p.m. on the following Business Day. If such
failure shall have occurred for any reason other than
default by the Agent in the performance of its obligations
hereunder or under the Distribution Agreement, the Company
will reimburse the Agent on an equitable basis for its loss
of the use of funds during the period when they were
credited to the account of the Company. In addition, if
such failure shall have occurred by reason of a default by
the Company in the performance of its obligations under the
Distribution Agreement, the Company will pay the Selling
Agent any commission to which it would have been entitled in
connection with such sale.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect. In the event of a failure to settle with
respect to a Book-Entry Note that was to have been
represented by a Global Note also representing other Book-
Entry Notes, the Trustee will provide, in accordance with
Settlement Procedures C and D, for the authentication and
issuance of a Global Note representing such other Book-Entry
Notes and will make appropriate entries in its records.
Trustee Not to Risk
Funds: Nothing herein shall be deemed to
require the Trustee to risk or expend its own funds in
connection with any payment to the Company, or the Agents or
DTC, it being understood by all parties that payments made
by the Trustee to either the Company, DTC or the Agents
shall be made only to the extent that funds are provided to
the Trustee for such purpose.
Renewable Notes: At the time of issuance of a Renewable
Note, the Trustee will identify the Note as a Renewable Note
in the comments field of the Pending MTN Deposit Message and
will list the maturity date as the latest possible maturity
date on the Renewable Note. The Company will also arrange
for a copy of the pricing supplement relating to the
Renewable Note (identified by CUSIP number) to be supplied
to Interactive Data Corporation.
Holders of Book-Entry Renewable Notes may
terminate the automatic extension of maturity during the
election period beginning 30 days prior to and ending 15
days prior to certain Interest Payment Dates as specified in
a Prospectus Supplement or Pricing Supplement (unless
another period is specified in the applicable Pricing
Supplement as the "Special Election Period"). Electing
Holders will exchange the Renewable Notes for Short-Term
Notes.
DTC Participants wishing to terminate the
automatic extension of maturity on Renewable Notes that they
are holding will be entitled to utilize DTC's Deliver Order
Procedures. After receiving such Renewable Notes in its
account, the Trustee will follow the procedures outlined in
the Letter of Representations.
Termination of the automatic extension of maturity
of all or a portion of a Book-Entry Renewable Note may be
revoked provided that the principal amount of any portion of
such Book-Entry Renewable Note or a Short-Term Note issued
in exchange therefor (i) to which the revocation relates and
(ii) to which the revocation does not relate, each is at
least $100,000 or any larger amount that is an integral
multiple of $1,000. Such revocation may be made by
following the procedures described below on any day
following delivery to the Trustee of the election to
terminate the automatic extension of maturity and not less
than 60 days prior to the Extended Maturity Date.
Any Participant wishing to revoke the termination
of automatic extension of maturity will be entitled to
utilize DTC's Deliver Order Procedures. After receiving the
Short-Term Notes in its account, the Trustee will follow the
procedures outlined in Paragraph __ of the Letter of
Representations.
On each exchange date, the Trustee will reduce the
balance of the Renewable Global Note by the total principal
amount of termination instructions received during the prior
election period, less the total principal amount of
revocation instructions received relating to termination
instructions with respect to which Short-Term Global Notes
have not theretofore been issued, and increase the balance
of the Renewable Global Note by the total principal amount
of revocation instructions received relating to Short-Term
Global Notes theretofore issued with respect to such
Renewable Global Note. The Trustee will also (i)
authenticate a new Global Note for the Short-Term Note,
identified by the separate CUSIP number assigned prior to
the beginning of the election period and with a principal
amount equal to the total amount of termination instructions
received during the prior election period, less the total
principal amount of revocation instructions received with
respect thereto, and (ii) reduce the balance of Short-Term
Notes theretofore issued by the total principal balance of
revocation instructions received with respect thereto.
III. Certificated Notes procedures
Payment at
Maturity: As specified in the Indenture and the
Form of Note.
Settlement: Prior to 3:00 p.m., New York City time,
on the Business Day prior to the Settlement Date, the
Company will instruct the Trustee or its agent by facsimile
transmission or other acceptable written means to
authenticate and deliver the Certificated Notes no later
than 2:15 p.m., New York City time, on the Settlement Date.
If the Settlement Date is the same day as the date
of acceptance, then prior to 11:00 a.m., New York City time,
on the Settlement Date the Company will instruct the Trustee
or its agent by facsimile transmission or other acceptable
written means to authenticate and deliver the Certificated
Notes no later than 2:15 p.m., New York time, on the
Settlement Date. Certificated Notes denominated in a
currency or currency unit other than U.S. dollars shall have
a Settlement Date not less than two Business Days after the
acceptance of the offer by the Company.
Delivery of
Notes
and Cash
Payment: Upon receipt of appropriate
documentation and instructions, the Company will cause the
Trustee to prepare and authenticate each Note and
appropriate receipts.
Each Certificated Note shall be authenticated and
dated on the Settlement Date therefor. The Trustee will
deliver each authenticated Certificated Note to the Selling
Agent for the benefit of the purchaser in accordance with
written instructions (or oral instructions confirmed in
writing (which may be given by telex or telecopy) on the
next business day) from the Company. Delivery by the
Trustee of each Certificated Note will be made against a
receipt therefor.
Upon verification by the Selling Agent that a
Certificated Note has been prepared and properly
authenticated and delivered by the Trustee and registered in
the name of the purchaser in the proper principal amount and
other terms in accordance with the Sale Information, payment
will be made to the Company's account at on
behalf of the Company by the Selling Agent on behalf of the
purchaser the same day as the Selling Agent's receipt of
such Certificated Note in immediately available funds. If
either (i) the Certificated Note is denominated in U.S.
dollars or (ii) the Certificated Note is denominated in a
currency or currency unit other than U.S. dollars and, at or
prior to the Settlement Date, the Company and the Selling
Agent have entered into, or the Selling Agent has arranged
for the Company to enter into, a contract with respect to
the sale of the Specified Currency, the amount payable by
the Selling Agent pursuant to the preceding sentence shall
be the issue price of the Certificated Note (or the U.S.
dollar equivalent pursuant to such contract) less the
Selling Agent's commission determined in accordance with
Section 2(a) of the Distribution Agreement. In all other
cases, the Selling Agent's commission shall not be
discounted from the gross proceeds but shall be paid
separately by the Company in U.S. dollars in immediately
available funds on the Settlement Date. The payment by the
Selling Agent shall be made only upon prior receipt by such
Agent of immediately available funds from or on behalf of
the purchaser in the Specified Currency unless such Agent
decides, at its option, to advance its own funds for such
payment against subsequent receipt of funds from the
purchaser.
Upon delivery of a Certificated Note to the
Selling Agent and the verification provided in the preceding
paragraph, the Selling Agent shall promptly deliver such
Certificated Note to the purchaser or its agent.
Failures: In the event that a purchaser (other
than a Purchasing Agent) shall fail to accept delivery of
and make payment for any Certificated Note, the Selling
Agent will forthwith notify the Trustee and the Company's
Corporate Treasurer's Office (Department 969) by telephone
or by facsimile transmission. If the Certificated Note has
been delivered to the Selling Agent on behalf of the
purchaser, the Selling Agent will immediately return the
Certificated Note to the Trustee. If funds have been
advanced by the Selling Agent for the purchase of such Note,
the banking department of will, upon
instruction by the Company and upon receipt of the
Certificated Note, debit the account of the Company in an
amount equal to the amount previously credited thereto in
respect of the Note and will either credit the account of or
return such funds to the Selling Agent. Such debits and
credits or returns will be made on the Settlement Date if
possible and, in any event, not later than the business day
following the Settlement Date. If such failure shall have
occurred for any reason other than default by the Selling
Agent in the performance of its obligations under the
Distribution Agreement, the Company will reimburse the
Selling Agent on an equitable basis for its loss of the use
of the funds during the period when they were credited to
the account of the Company. In addition, if such failure
shall have occurred by reason of a default by the Company in
the performance of its obligations under the Distribution
Agreement, the Company will pay the Selling Agent any
commission to which it would have been entitled in
connection with such sale.
Immediately upon receipt of the certificate
representing the Note in respect of which the failure
occurred, the Trustee will void such Certificated Note, make
appropriate entries in its records and, unless otherwise
instructed by the Company, destroy the certificate.
<PAGE>
ANNEX III
Pursuant to Section 6(d) of the Distribution Agreement,
the Company's independent certified public accountants shall
furnish letters to the effect that:
(i) They are independent certified public
accountants with respect to the Company and its consolidated
subsidiaries within the meaning of the Act and the
applicable published rules and regulations of the Commission
thereunder and the answer to Item 10 of the Registration
Statement is correct insofar as it relates to them;
(ii) In their opinion, the financial statements
and schedules and the additional financial information
examined by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to
form in all material respects with the applicable accounting
requirements of the Act or the Exchange Act, as applicable,
and the published rules and regulations thereunder;
(iii) On the basis of limited procedures, not
constituting an examination in accordance with generally
accepted auditing standards, including a reading of the
unaudited financial statements and schedules and other
information referred to below, a reading of the latest
available interim financial statements of the Company and
certain of its subsidiaries, inspection of the minute books
of the Company and certain of its subsidiaries since the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe
that:
(A) the unaudited consolidated statements of
income, consolidated statements of financial position and
consolidated statements of changes in financial position
included or incorporated by reference in the Company's
Quarterly Reports on Form 10-Q incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act and the published rules and regulations
thereunder or are not stated on a basis substantially
consistent with that of the audited consolidated statements
of income, consolidated statements of financial position and
consolidated statements of changes in financial position
included or incorporated by reference in the Company's
Annual Report on Form 10-K for the most recent fiscal year;
or
(B) as of a specified date not more than five
business days prior to the date of delivery of such letter,
there have been any changes in the capital stock accounts,
long-term debt, short-term debt, domestic retail customer
accounts receivable (owned), inventories of the
Merchandising operations, or any decreases in consolidated
net assets or other items specified by the Agents, in each
case as compared with amounts shown or included in the
latest consolidated statement of financial position included
or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; or
(C) for the period from the date of the latest
financial statements included or incorporated by reference
in the Prospectus to the specified date referred to in sub-
clause (B) there were any decreases in operating revenues;
total operating revenues; operating income; income before
income taxes; net income or net income per share or other
items specified by the Agents, or any increases in any items
specified by the Agents, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the Agents,
except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(iv) In addition to the examination referred to
in their report(s) included or incorporated by reference in
the Prospectus and the limited procedures, inspection of
minute books, inquiries and other procedures referred to in
clause (iii) above, they have carried out certain specified
procedures, not constituting an audit, with respect to
certain amounts, percentages and financial information
specified by the Agents which are derived from the general
accounting records of the Company and its subsidiaries,
which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits
and schedules to, the Registration Statement specified by
the Agents or in documents incorporated by reference in the
Prospectus specified by the Agents, and have compared
certain of such amounts, percentages and financial
information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
All references in this Annex III to the Prospectus
shall be deemed to refer to the Prospectus as amended or
supplemented (including the documents incorporated by
reference therein) as of the Closing Date referred to in
Section 6(d) thereof and to the Prospectus as amended or
supplemented (including the documents incorporated by
reference therein) as of the date of the amendment,
supplement, incorporation or the Time of Delivery relating
to the Terms Agreement requiring the delivery of such letter
under Section 6(d) thereof.
Exhibit 5
SEARS, ROEBUCK AND CO.
SEARS TOWER
CHICAGO, ILLINOIS 60684
ROBERT J. PENCE
Senior Counsel
Corporate Law-Dept. 966
312-875-1823
August 4, 1995
Sears, Roebuck and Co.
Sears Tower
Chicago, Illinois 60684
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-3,
Registration No. 33-55825, and Amendment No. 1 thereto to be
filed with the Securities and Exchange Commission on or about
August 4, 1995, (the "Registration Statement") by Sears,
Roebuck and Co. (the "Company") in connection with the
registration under the Securities Act of 1933, as amended (the
"Act"), for an offering to be made on a continuous or delayed
basis pursuant to the provisions of Rule 415 under the Act, of
securities having an aggregate initial offering price of not
more than $6,000,000,000, consisting of: (i) debt securities
("Debt Securities"), (ii) Common Shares, par value $0.75 per
share, ("Common Shares"), (iii) Preferred Shares, par value
$1.00 per share, ("Preferred Shares"), (iv) Depositary Shares
representing fractional interests in Preferred Shares
("Depositary Shares," and, collectively with Common Shares and
Preferred Shares, "Equity Securities") and (v) warrants
("Warrants") to purchase or receive Debt Securities or Equity
Securities. I have examined the form of Indenture (the
"Indenture"), between the Company and the Trustee, to be filed
with the Registration Statement, under which the Debt
Securities are to be issued. The prospectuses included in the
registration statement also relate to unallocated amounts of
Debt Securities, Common Shares, Preferred Shares, Depositary
Shares and Securities Warrants having an aggregate initial
offering price not in excess of the aggregate amounts of
securities that have not yet been offered for sale under
Registration Statement Nos. 33-41485 and 33-43459 on Form S-3.
All such Debt Securities, Common Shares, Preferred Shares,
Depositary Shares and Securities Warrants are herein
collectively referred to as the "Securities." I am familiar
with the proceedings heretofore taken, and with the additional
proceedings proposed to be taken, by the Company in connection
with the authorization, registration, issuance and sale of the
Securities. All terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the
Registration Statement.
Subject to the proposed additional proceedings being taken
as now contemplated prior to the issuance of the Securities,
the issuance and sale thereof in the manner referred to in the
Registration Statement, and the terms of the Securities being
otherwise in compliance with then applicable law, I am of the
opinion that:
(i) when the execution, issuance and delivery by the
Company of any of the Debt Securities has been duly authorized
by all necessary corporate action on the part of the Company,
the Indenture relating to such Debt Securities has been duly
executed, issued and delivered, and such Debt Securities have
been duly executed, issued and delivered on the part of the
Company and authenticated by the Trustee pursuant to the
Indenture, upon full payment therefor such Debt Securities
will be legally issued and binding obligations of the Company
in accordance with their terms, subject to insolvency,
bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general
equity principles;
(ii) when the execution, issuance and delivery by the
Company of any of the Common Shares has been duly authorized
by all necessary corporate action on the part of the Company
and such Common Shares have been duly executed, issued and
delivered on the part of the Company, upon full payment
therefor such Common Shares will be validly issued, fully paid
and nonassessable, and that (except for statutory claims by
laborers, servants, or employees for unpaid debts, wages or
salaries, chargeable against certain of the principal
shareholders only in the event of termination of listing and
public trading in the Company's shares) no personal liability
for obligations of the Company will attach to any holder of
such Common Shares under existing statutes of the State of New
York, in which the Company is incorporated;
(iii) when a certificate of amendment to the Restated
Certificate of Incorporation of the Company setting forth the
terms of any Preferred Shares has been duly authorized,
approved, executed and filed by the Company, the execution,
issuance and delivery by the Company of such Preferred Shares
has been duly authorized by all necessary corporate action on
the part of the Company and such Preferred Shares have been
duly executed, issued and delivered on the part of the
Company, upon full payment therefor such Preferred Shares will
be validly issued, fully paid and nonassessable, and that
(except for statutory claims by laborers, servants, or
employees for unpaid debts, wages or salaries, chargeable
against certain of the principal shareholders only in the
event of termination of listing and public trading in the
Company's shares) no personal liability for obligations of the
Company will attach to any holder of such Common Shares under
existing statutes of the State of New York, in which the
Company is incorporated; and that, when the Deposit Agreement
and any other necessary agreements relating to any Depositary
Shares have been duly authorized, executed and delivered and
the Depositary Receipts representing such Depositary Shares
have been duly executed, authenticated, issued and delivered,
and any such Preferred Shares are placed in deposit under such
Deposit Agreement in the manner referred to in the
Registration Statement, upon full payment therefor such
Depositary Shares will be legally issued pursuant to the
Deposit Agreement and entitled to the benefits thereof,
subject to insolvency, bankruptcy, reorganization or other
laws relating to or affecting the enforcement of creditors'
rights or by general equity principles; and
(iv) when the execution, issuance and delivery by the
Company of any Warrants relating to any such Debt Securities
or Equity Securities has been duly authorized by all necessary
corporate action on the part of the Company, the Warrant
Agreement and any other necessary agreements relating to such
Warrants have been duly authorized, executed and delivered and
the Warrant Certificates representing such Warrants have been
duly executed, authenticated, issued and delivered, upon full
payment therefor such Warrants will be legally issued and
binding obligations of the Company in accordance with their
terms, subject to insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of
creditors' rights or by general equity principles.
I consent to the use of this opinion as an exhibit to the
Registration Statement and to the references to me in the
Prospectuses which are part of the Registration Statement.
Very truly yours,
/s/ Robert J. Pence
Robert J. Pence
Senior Counsel
Corporate Law Department
Sears, Roebuck and Co.
EXHIBIT 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this
Registration Statement of Sears, Roebuck and Co. on Form S-3
of our report dated February 24, 1995 (May 10, 1995 as to
Note 4 to the consolidated financial statements), which
expresses an unqualified opinion and includes an explanatory
paragraph relating to the Company changing its method of
accounting for postretirement benefits in 1992, incorporated
herein by reference to the Company's Current Report on Form
8-K dated May 15, 1995, and to the reference to us under the
heading "Experts" in the Prospectuses, which are part of
this Registration Statement. We also consent to the use in
this Registration Statement of our report dated February 24,
1995 (May 10, 1995 as to Note 4 to the consolidated
financial statements) on the Company's Summary Financial
Information included as EXHIBIT 99 to this Registration
Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Chicago, Illinois
August 4, 1995
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the
undersigned, being a director or officer, or both, of SEARS,
ROEBUCK AND CO., a New York corporation (the "Company"), does
hereby constitute and appoint EDWARD A. BRENNAN, JAMES M.
DENNY, DAVID SHUTE, JAMES A. BLANDA and ALICE M. PETERSON,
with full power to each of them to act alone, as the true and
lawful attorneys and agents of the undersigned, with full
power of substitution and resubstitution to each of said
attorneys, to execute, file or deliver any and all instruments
and to do any and all acts and things which said attorneys and
agents, or any of them, deem advisable to enable the Company
to comply with the Securities Act of 1933, as amended (the
"Securities Act"), the Trust Indenture Act of 1939, as
amended, and any requirements or regulations of the Securities
and Exchange Commission in respect thereto, in connection with
the registration under said Securities Act of issues of debt
securities, guarantees, certificates of interest in trusts,
common or preferred shares of the Company (including without
limitation common or preferred shares of the Company into
which any of such securities are convertible), interests in
such preferred shares, other securities, or warrants or rights
to purchase or receive any of the foregoing, to be issued or
sold by the Company (or by subsidiaries of the Company where
the Company signs, as co-registrant, registration statements
filed by such subsidiaries under said Securities Act), where
applicable under the provisions of appropriate indentures, and
the qualification of said indentures under said Trust
Indenture Act, including specifically, but without limitation
of the general authority hereby granted, the power and
authority to sign his or her name as director or officer, or
both, of the Company, as indicated below opposite his or her
signature, to the registration statements, or any amendments,
post-effective amendments, supplements or paper supplemental
thereto, to be filed in respect of said debt securities,
guarantees, certificates of interest, common shares, preferred
shares or interests therein, other securities, or warrants or
rights, and each of the undersigned does hereby fully ratify
and confirm all that said attorneys and agents or any of them,
or the substitute of any of them, shall do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has
subscribed his or her name, this 4th day of August, 1995.
NAME TITLE
/s/ Edward A. Brennan Director, Chairman of the Board,
Edward A. Brennan President and Chief Executive
Officer (Principal Executive
Officer)
/s/ J. M. Denny Vice Chairman and Acting Chief
James M. Denny Financial Officer (Principal
Financial Officer)
/s/ James A. Blanda Vice President and Controller
James A. Blanda (Principal Accounting Officer)
/s/ Hall Adams, Jr. Director
Hall Adams, Jr.
/s/ Warren L. Batts Director
Warren L. Batts
/s/ James W. Cozad Director
James W. Cozad
/s/ W. E. La Mothe Director
William E. LaMothe
/s/ Arthur C. Martinez Director
Arthur C. Martinez
/s/ Michael A. Miles Director
Michael A. Miles
/s/ Sybil C. Mobley Director
Sybil C. Mobley
/s/ Nancy C. Reynolds Director
Nancy C. Reynolds
/s/ C. B. Rogers, Jr. Director
Clarence B. Rogers, Jr.
/s/ Donald H. Rumsfeld Director
Donald H. Rumsfeld
EXHIBIT 25
============================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
SEARS, ROEBUCK AND CO.
(Exact name of obligor as specified in its charter)
New York 36-1750680
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Sears Tower
Chicago, Illinois 60684
(Address of principal executive offices) (Zip code)
______________________
Debt Securities
(Title of the indenture securities)
============================================================
1. General information. Furnish the following information
as to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- ------------------------------------------------------------
Name Address
- ------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street, New
State of New York, N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New
York, N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York
Association
(b) Whether it is authorized to exercise corporate
trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None. (See Note on page 3.)
16. List of Exhibits.
Exhibits identified in parentheses below, on file with
the Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank
of New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence business
and a grant of powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration Statement No.
33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration Statement No.
33-31019.)
6. The consent of the Trustee required by Section
321(b) of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee published pursuant to law or to the requirements of
its supervising or examining authority.
NOTE
Inasmuch as this Form T-1 is filed prior to the
ascertainment by the Trustee of all facts on which to base a
responsive answer to Item 2, the answer to said Item is
based on incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee,
The Bank of New York, a corporation organized and existing
under the laws of the State of New York, has duly caused
this statement of eligibility to be signed on its behalf by
the undersigned, thereunto duly authorized, all in The City
of New York, and State of New York, on the 3rd day of
August, 1995.
THE BANK OF NEW YORK
By: /s/ LLOYD A. MC KENZIE
Name: Lloyd A. McKenzie
Title: Assistant Vice President
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of
business March 31, 1995, published in accordance with a call
made by the Federal Reserve Bank of this District pursuant
to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 3,575,856
Interest-bearing balances .......... 747,540
Securities:
Held-to-maturity securities ........ 1,283,680
Available-for-sale securities ...... 1,615,292
Federal funds sold in domestic
offices of the bank ................ 5,577,896
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 24,763,265
LESS: Allowance for loan and
lease losses .............. 532,411
LESS: Allocated transfer risk
reserve .....................28,558
Loans and leases, net of unearned
income, allowance, and reserve 24,202,296
Assets held in trading accounts ...... 1,502,750
Premises and fixed assets (including
capitalized leases) ................ 618,958
Other real estate owned .............. 47,755
Investments in unconsolidated
subsidiaries and associated
companies .......................... 184,149
Customers' liability to this bank on
acceptances outstanding ............ 1,018,696
Intangible assets .................... 101,149
Other assets ......................... 1,227,291
Total assets ......................... $41,703,316
LIABILITIES
Deposits:
In domestic offices ................ $18,543,633
Noninterest-bearing .......6,949,896
Interest-bearing .........11,593,737
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 11,303,075
Noninterest-bearing ..........65,927
Interest-bearing .........11,237,148
Federal funds purchased and secu-
rities sold under agreements to re-
purchase in domestic offices of
the bank and of its Edge and
Agreement subsidiaries, and in
IBFs:
Federal funds purchased ............ 1,327,537
Securities sold under agreements
to repurchase .................... 37,400
Demand notes issued to the U.S.
Treasury ........................... 97,827
Trading liabilities .................. 1,349,293
Other borrowed money:
With original maturity of one year
or less .......................... 2,027,148
With original maturity of more than
one year ......................... 313,877
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,018,848
Subordinated notes and debentures .... 1,056,320
Other liabilities .................... 1,435,093
Total liabilities .................... 38,510,051
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 525,666
Undivided profits and capital
reserves .......................... 1,753,592
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ ( 22,501)
Cumulative foreign currency transla-
tion adjustments .................. ( 5,776)
Total equity capital ................ 3,193,265
Total liabilities and equity
capital ........................... $41,703,316
I, Robert E. Keilman, Senior Vice President and
Comptroller of the above-named bank do hereby declare that
this Report of Condition has been prepared in conformance
with the instructions issued by the Board of Governors of
the Federal Reserve System and is true to the best of my
knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the cor-
rectness of this Report of Condition and declare that it has
been examined by us and to the best of our knowledge and
belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal
Reserve System and is true and correct.
_
Thomas A. Renyi _
J. Carter Bacot _ Directors
Alan R. Griffith _
_
EXHIBIT 99
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
Sears, Roebuck and Co.
We have audited the consolidated financial statements of
Sears, Roebuck and Co. as of December 31, 1994 and 1993, and
for each of the three years in the period ended December 31,
1994, and have issued our report thereon dated February 24,
1995 (May 10, 1995 as to Note 4 to the consolidated
financial statements), which report expresses an unqualified
opinion and includes an explanatory paragraph relating to
the Company changing its method of accounting for
postretirement benefits in 1992. Such financial statements
and our report thereon are incorporated herein by reference
to the Company's Current Report on Form 8-K dated May 15,
1995.
We have also previously audited, in accordance with
generally accepted auditing standards, the Consolidated
Balance Sheets of Sears, Roebuck and Co. as of December 31,
1992, 1991 and 1990, and the related Consolidated Statements
of Income, Shareholders' Equity, and Cash Flows for the
years ended December 31, 1991 and 1990 as restated (see Note
4 to the consolidated financial statements filed as part of
the Company's Current Report on Form 8-K dated May 15,
1995)(none of which are presented herein); and we expressed
unqualified opinions on those consolidated financial
statements. In our opinion, the information set forth in
the Summary Financial Information for each of the five years
in the period ended December 31, 1994, appearing on page 5
of the Prospectuses which are part of this Registration
Statement, is fairly stated, in all material respects in
relation to the consolidated financial statements from which
it has been derived.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Chicago, Illinois
February 24, 1995
(May 10, 1995 as to Note 4)
