As filed with the Securities and Exchange Commission on March , 1995
Registration Statement No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
Sears Roebuck Acceptance Corp.
(Exact name of registrant as specified in its charter)
Delaware 51-0080535
(State of incorporation) (I.R.S. Employer Identification No.)
3711 Kennett Pike
Greenville, Delaware 19807
(302) 888-3100
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Sears, Roebuck and Co.
(Exact name of co-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 co-registrant's principal executive offices)
Michael W. Phillips David Shute, Esq.
President and Chief Executive Officer Senior Vice President,
Sears Roebuck Acceptance Corp. General Counsel and Secretary
3711 Kennett Pike Sears, Roebuck and Co.
Greenville, Delaware 19807 Sears Tower
(302) 888-3100 Chicago, Illinois 60684
(312) 875-2500
(Names, addresses, including zip code, and telephone numbers,
including area code, of agents for service)
Copies to:
Richard F. Kotz, Esq. Robert J. Pence, Esq. Michael D. Levin, Esq.
Secretary Senior Counsel Latham & Watkins
Sears Roebuck Corporate Law Department Sears Tower
Acceptance Corp. Sears, Roebuck and Co. Suite 5800
3711 Kennett Pike Sears Tower Chicago, Illinois 60606
Greenville, Delaware 19807 Chicago, Illinois 60684
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
(Cover Continued on Following Page)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Each Amount Offering Aggregate Amount of
Class of Securities To Be Price Offering Registration
To Be Registered Registered Per Unit(1) Price(1) Fee
Debt Securities $1,000,000 100% $1,000,000 $344.83
(1) Estimated solely for the purpose of determining the amount of the
registration fee.
The registrant and co-registrant hereby amend this registration statement
on such date or dates as may be necessary to delay its effective date until
the registrant and co-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
The Sears Roebuck Acceptance Corp. and Sears, Roebuck and Co. annual
reports on Form 10-K for fiscal 1994 will be filed with the Commission and
incorporated by reference into the Registration Statement, and an amendment
to the Registration Statement reflecting such incorporation by reference,
as well as the required consents of independent public accountants and Form
T-1 Statement of Eligibility and Qualification, will be filed with the
Commission, prior to any request for acceleration of effectiveness of the
Registration Statement.
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 March 17, 1995
Sears Roebuck Acceptance Corp.
Debt Securities
Sears Roebuck Acceptance Corp. (``SRAC'') from time to time may offer up to
$1,000,000 aggregate principal amount of its debt securities consisting of
debentures, notes and/or other unsecured evidences of indebtedness (the
``Debt Securities''). 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 Securities (``Global Securities'')
registered in the name of a depository's nominee and, if so represented,
beneficial interests in such Global Securities will be shown on, and
transfers thereof will be effected only through, records maintained by the
depository and its participants. The Debt Securities may be offered as
separate series in amounts, at prices and on terms to be set forth in
supplements to this Prospectus. It is anticipated that SRAC will sell Debt
Securities directly to institutional investors and may sell Debt Securities
to or through underwriters, and also may sell Debt 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 Debt Securities in respect of which this
Prospectus is being delivered, the principal amounts, if any, to be
purchased by underwriters and the compensation, if any, of such
underwriters or agents.
The terms of the Debt 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 at the option of SRAC or the Holder,
terms for sinking fund payments, 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 Debt Securities in respect of which this Prospectus is
being delivered, are set forth in the accompanying Prospectus Supplement.
As used herein, Debt Securities shall include securities denominated in
U.S. dollars or, at the option of SRAC 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.
March , 1995
No dealer, salesman 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
Reports to Holders of Debt Securities 3
Incorporation of Certain Documents by Reference 3
Sears Roebuck Acceptance Corp. 4
Use of Proceeds 4
Summary Financial Information 5
Ratio of Earnings to Fixed Charges 6
Description of Debt Securities 6
Plan of Distribution 9
Legal Opinion 9
Experts 10
AVAILABLE INFORMATION
SRAC and Sears, Roebuck and Co. (``Sears''), SRAC's parent, are subject to
the informational requirements of the Securities Exchange Act of 1934, as
amended (the ``Exchange Act'') and in accordance therewith file reports and
other information with the Securities and Exchange Commission (the
``Commission''). Sears also files proxy statements with the Commission.
Such reports, proxy statements and other information can be inspected and
copied at the public reference facilities of the Commission in Room 1024,
450 Fifth Street N.W., Washington, D.C. 20549; 7 World Trade Center, 13th
Floor, New York, New York 10048; and Suite 1400, Northwestern Atrium
Center, 500 W. Madison Street, Chicago, Illinois 60606; 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 SRAC, Sears and the Debt 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 SRAC, Sears and the Debt
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.
REPORTS TO HOLDERS OF DEBT SECURITIES
Holders of Debt Securities will receive annual reports containing
information, including financial information that has been audited and
reported on by independent public accountants, about SRAC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Reports on Form 10-K for the year ended December 31, 1993 filed
by SRAC and Sears, the Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, June 30, and September 30, 1994 filed by SRAC and
for the quarterly periods ended April 2, July 2 and October 1, 1994 filed
by Sears, and the Current Reports on Form 8-K for June 7, 1994 filed by
SRAC and for January 11, 1994, February 1, 1994, March 9, 1994, March 21,
1994, April 20, 1994, September 29, 1994, November 10, 1994, January 17,
1995 and February 7, 1995 filed by Sears, with the Commission pursuant to
Section 13 of the Exchange Act, and the proxy statement dated February 21,
1995 relating to a Special Meeting of Shareholders to be held on March 31,
1995 to consider and vote on a proposal that provides for the distribution
to the holders of Sears common shares of all of the common stock of The
Allstate Corporation that are owned by Sears, filed by Sears with the
Commission pursuant to Section 14 of the Exchange Act, are incorporated in
and made a part of this Prospectus by reference.
All documents filed by SRAC or 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
Debt 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.
SRAC 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 Acceptance Corp., 3711
Kennett Pike, Greenville, Delaware 19807, Attention: Vice President,
Finance (302/888-3100).
SEARS ROEBUCK ACCEPTANCE CORP.
SRAC is a wholly-owned subsidiary of Sears and was incorporated in 1956
under the laws of Delaware. Its general offices are located at 3711 Kennett
Pike, Greenville Delaware 19807 (302/888-3100). SRAC raises funds primarily
from the direct placement of commercial paper with corporate and
institutional investors and through intermediate term loans. SRAC uses
borrowing proceeds to acquire short-term notes of Sears and purchase
outstanding customer receivable balances from Sears. Sears uses the funds
obtained from SRAC for general funding purposes. SRAC, and not Sears, will
be the sole obligor on the Debt Securities.
SRAC's income is derived primarily from the earnings on its investment in
the notes and receivable balances of Sears. The interest rate on Sears
notes is presently calculated so that SRAC maintains an earnings to fixed
charge ratio of at least 1.25 times. The yield on the investment in Sears
notes is related to SRAC's borrowing costs and, as a result, SRAC's
earnings fluctuate in response to movements in interest rates and changes
in Sears short-term borrowing requirements.
At February 28, 1995, SRAC had eleven employees.
USE OF PROCEEDS
The net proceeds to be received by SRAC from the sale of the Debt
Securities offered hereby will be added to its general funds and initially
used to reduce short-term indebtedness. As indicated under ``Sears Roebuck
Acceptance Corp.,'' SRAC's principal business is the purchase of short-term
notes of Sears; also, on occasion, SRAC purchases customer receivable
balances from Sears Merchandise Group's Domestic credit operations. SRAC
expects to incur additional indebtedness, but the amount and nature thereof
have not yet been determined and will depend on economic conditions and
certain capital requirements of Sears. 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. Sears also may, from time to time, issue equity
securities.
SUMMARY FINANCIAL INFORMATION
The following table sets forth certain summary financial information of
SRAC for the five years ended December 31, 1994. The summary information
should be read in conjunction with the financial statements of SRAC and the
notes thereto incorporated herein by reference.
1994 1993 1992 1991 1990
(dollars in millions)
Operating Results
Total revenues $282.7 $337.5 $696.5 $1,100.8 $1,347.4
Expenses
Interest and related
expenses 218.5 236.1 482.8 825.9 1,072.1
Total Expenses 220.4 276.7 532.3 894.1 1,077.2
Income taxes 22.1 21.3 56.1 70.3 91.8
Net income 40.2 39.5 108.1 136.4 178.4
Financial Position
Assets
Notes of Sears $6,842.5 $3,403.9 $10,493.6 $12,214.5 $14,578.2
Customer receivable
balances purchased
from Sears 81.5 88.0 963.4 1,042.8 -
Total assets 7,031.2 4,145.8 12,415.2 14,676.2 15,373.3
Liabilities
Debt payable within
one year
Commercial paper $4,912.9 $2,475.0 $8,515.3 $10,205.8 $10,331.0
Agreements with bank
trust departments 87.4 139.8 397.9 510.1 571.9
Debentures and notes 845.0 - - 204.0 925.0
Loan agreements with
SOFNV - 379.8 332.1 683.2 590.7
Total liabilities 5,853.5 3,008.3 9,287.0 11,656.1 12,489.6
Sears, Roebuck and Co.
investment in SRAC
Capital stock
(including capital
in excess of
par value) 35.0 35.0 365.2 365.2 365.2
Retained income 1,142.7 1,102.5 2,763.0 2,654.9 2,518.5
Debt as percentage of
equity 496% 263% 296% 384% 431%
Other Pertinent Data
Commercial paper
Volume $40,227 $41,274 $77,089 $100,820 $150,823
Average daily
outstandings 3,615 3,812 9,328 10,543 10,340
Agreements with bank
trust departments
Volume 594 1,362 3,781 2,177 2,863
Average daily
outstandings 124 508 747 643 848
Contractual Credit
Facilities (year-end)
Total credit
facilities 5,132 4,200 10,812 11,801 10,775
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for SRAC for each of the years ended
December 31, 1994, 1993, 1992, 1991 and 1990 was 1.29, 1.26, 1.34, 1.25 and
1.25, respectively. Earnings consist of net income plus fixed charges and
income taxes. Fixed charges consist of interest costs and amortization of
debt discount and expense; rental expense is insignificant with no effect
on the calculation. The interest rate paid by Sears to SRAC on its
investment in Sears notes is presently calculated to produce earnings
sufficient to cover SRAC's fixed charges at least 1.25 times.
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. SRAC may
enter into an Indenture with , 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 SRAC.
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 SRAC 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 SRAC, 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 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 (other than Debt Securities represented by Global
Securities) will be transferable, at the office or agency of SRAC
maintained for such purposes in the Borough of Manhattan of The City of New
York, and at such other places, if any, in the city in which the principal
executive offices of SRAC or the city in which the principal corporate
trust office of the Trustee are located, as SRAC may designate, which will
initially include {the principal corporate trust office of the Trustee in
the Borough of Manhattan of The City of New York} and the principal
executive offices of SRAC in Greenville, Delaware. Unless other
arrangements are made, interest on the Debt Securities (other than Debt
Securities represented by Global Securities) will be paid by checks mailed
to the Holders at their registered addresses. (Sections 1.1, 2.5, 3.1, 3.2)
Information with respect to payment of principal, premium, if any, and
interest, if any, on, and transfers of beneficial interests in, Debt
Securities represented by Global Securities will be set forth in the
Prospectus Supplement relating thereto.
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 SRAC, SRAC 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 SRAC 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 a default and the continuation thereof. (Sections 1.1, 6.1)
Defaults
The following are defaults with respect to any series of Debt Securities:
(a) failure to pay the principal amount (and premium, if any) 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 SRAC with the Trustee or with a paying agent prior to the
expiration of 30 days); (c) failure to perform any other covenant of SRAC
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 of SRAC (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. In addition, a
particular series of Debt Securities may provide for additional events of
default, as may be described in the Prospectus Supplement. 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 amount 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)
SRAC 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 3.4)
Modification or Amendment of the Indenture
Modifications and alterations of the Indenture may be made by SRAC 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,
SRAC 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, SRAC has received a
ruling from the Internal Revenue Service or an opinion of recognized
counsel who is not an employee of SRAC, 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 SRAC 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 SRAC's obligations regarding the payment of interest and principal, then
such obligations of SRAC 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
, which SRAC anticipates will be the Trustee
under an Indenture, performs other services for affiliates of SRAC.
PLAN OF DISTRIBUTION
General. SRAC may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. It
is anticipated that SRAC will offer Debt Securities directly to brokers or
dealers, investment companies, insurance companies, banks, savings and loan
associations, trust companies or similar institutions, and trusts for which
a bank, savings and loan association, trust company or investment adviser
is the trustee or authorized to make investment decisions.
The distribution of the Debt 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 Debt Securities.
In connection with the sale of Debt Securities, underwriters may receive
compensation from SRAC or from purchasers of Debt Securities for whom they
may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt 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 Debt Securities may be deemed to be
underwriters, and any discounts or commissions received by them and any
profit on the resale of Debt 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 SRAC, underwriters, dealers
and agents who participate in the distribution of Debt Securities may be
entitled to indemnification by SRAC against certain liabilities, including
liabilities under the Act.
Delayed Delivery Arrangements. If so indicated in the Prospectus
Supplement, SRAC will authorize dealers or other persons acting as SRAC
agents to solicit offers by certain institutions to purchase Debt
Securities from SRAC 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 SRAC. The
obligations of any purchaser under any such contract will not be subject to
any conditions except that (i) the purchase of the Offered Debt 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
Debt Securities are also being sold to underwriters, SRAC shall have sold
to such underwriters the Offered Debt 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 Debt Securities will disclose any deferred pricing arrangement
between SRAC and any entity acting as an underwriter which would permit
SRAC to determine its ultimate cost of funds pertaining to such Debt
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
The legality of the Debt Securities is being passed upon for SRAC by Robert
J. Pence, Senior Counsel, Corporate Law Department, of Sears.
EXPERTS
The annual financial statements of SRAC and the annual financial statements
and financial statement schedules of Sears and consolidated subsidiaries
included or incorporated by reference in SRAC's and Sears, respectively,
Annual Reports on Form 10-K for the year ended December 31, 1993 have been
audited to the extent and for the periods indicated in the reports of
Deloitte & Touche LLP, independent certified public accountants, and have
been incorporated herein, and the summary financial information to the
extent derived from said financial statements has been included herein, in
reliance upon the reports of such firm and upon the authority of such firm
as experts in accounting and auditing.
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
S.E.C. Registration Fee $344.83
Rating Agency Fee *
N.A.S.D. Fee *
State Qualification Expense (including legal fees) *
Trustee's Fees *
Printing and Engraving *
Legal Fees *
Auditors' Fees *
Miscellaneous *
Total $ *
*To be filed by amendment
Item 15. Indemnification of Officers and Directors.
SRAC is a Delaware corporation. Section 145 of the General Corporation Law
of the State of Delaware (``GCL'') provides that a Delaware corporation has
the power to indemnify its officers and directors in certain circumstances.
Subsection (a) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was
or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
the corporation), against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding provided that such director
or officer acted in good faith in a manner reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, provided that such director or officer
had no cause to believe his or her conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses actually and reasonably
incurred in connection with the defense or settlement of such action or
suit provided that such director or officer acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of
the corporation, except that no indemnification may be made in respect of
any claim, issue or matter as to which such director or officer shall have
been adjudged to be liable for negligence or misconduct in the performance
of his or her duty to the corporation unless and only to the extent that
the Court of Chancery or the court in which such action was brought shall
determine that despite the adjudication of liability such director or
officer is fairly and reasonably entitled to indemnity for such expenses
which the court shall deem proper.
Section 145 further provides that to the extent a director or officer of a
corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he or she shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; and empowers the corporation to purchase
and maintain insurance on behalf of a director or officer of the
corporation against any liability asserted against him or her or incurred
by him or her in any such capacity or arising out of his or her status as
such whether or not the corporation would have the power to indemnify him
or her against such liabilities under Section 145.
Article 11 of SRAC's Certificate of Incorporation provides for
indemnification of SRAC's officers and directors to the fullest extent
permitted by applicable law.
Certain directors of SRAC are also officers of Sears, a New York
corporation. Sections 721 through 724 of the New York Business Corporation
Law (``BCL'') provide that in certain circumstances a corporation may
indemnify directors and officers against judgments, fines, amounts paid in
settlement and reasonable expenses, including attorneys' fees, actually and
necessarily incurred as a result of any action or proceeding by it or in
the right of any other corporation which such directors or officers served
in any capacity at the request of Sears, if such director or officer acted,
in good faith, for a purpose which he or she reasonably believed not to be
opposed to, the best interests of SRAC and, in criminal actions or
proceedings, had no reasonable cause to believe that his conduct was
unlawful; provided, however, that no indemnification may be provided where
a person had been adjudged to have acted in bad faith or to have engaged in
active and deliberate dishonesty and were material to the cause of action
adjudicated, or to have gained a financial profit or other advantage to
which he or she was not legally entitled. A corporation is required to
indemnify against reasonable expenses (including attorneys' fees) any
director or officer who successfully defends any such actions. The
foregoing statements are subject to the detailed provisions of the BCL.
Article V of the by-laws of Sears provides that Sears shall indemnify to
the full extent permitted by law, any person made, or threatened to be
made, a party to, or who is otherwise involved in, any action, suit or
proceeding whether civil, criminal, administrative or investigative, by
reason of the fact that such person or his testator or intestate, while a
director or officer of Sears and at the request of Sears, is or was serving
another corporation in any capacity, against judgments, fines, amounts paid
in settlement and all expenses, including attorneys' fees, actually
incurred as a result of such action. Article V states that the
indemnification benefits provided thereby are contract rights, enforceable
as if set forth in a written contract.
Sears has in effect insurance policies in the amount of $100 million
covering all of Sears and SRAC's directors and officers in certain
instances where by law they may not be indemnified by Sears or SRAC.
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.
Item 16. Exhibits.
1(a) Form of Underwriting Agreement.
1(b) Form of Distribution Agreement.
4 Form of Indenture.
5 Opinion of Robert J. Pence.
12 Calculation of Ratio of Earnings to Fixed Charges for each of the
three years ended December 31, 1994.*
23 Consent of Deloitte & Touche LLP (Sears Roebuck Acceptance Corp.).*
23(b) Consent of Deloitte & Touche LLP (Sears, Roebuck and Co.).*
23(c) Consent of Robert J. Pence (included in Exhibit 5).
24(a) Power of Attorney of certain officers and directors of the
Registrant.
24(b) Power of Attorney of certain officers and directors of the
Co-Registrant.
26 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended.*
*To be filed by amendment.
Item 17. Undertakings
The undersigned registrant and co-registrant hereby undertake:
(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;
(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 or co-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 and co-registrant hereby undertake that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's or co-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 or co-registrant pursuant to the provisions described in
this registration statement above, or otherwise, the registrant and the
co-registrant have 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 or co-registrant in the successful
defense of any action, suit or proceeding) is asserted against the
registrant or co-registrant by such director, officer or controlling person
in connection with the securities being registered, the registrant or
co-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
and co-registrant certify that they have reasonable grounds to believe that
they meet all of the requirements for filing on Form S-3 and have duly
caused this registration statement to be signed on their behalf by the
undersigned, thereunto duly authorized, in Greenville, State of Delaware,
and the City of Chicago, State of Illinois, respectively, on the 17th day
of March, 1995.
SEARS ROEBUCK ACCEPTANCE CORP.
By KEITH E. TROST*
Keith E. Trost
Vice President-Finance and
Administration and Assistant Secretary
SEARS, ROEBUCK AND CO.
By ALICE M. PETERSON**
Alice M. Peterson
Vice President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
MICHAEL W. PHILLIPS* Director, President and Chief
Executive Officer of Sears
Roebuck Acceptance Corp.
(Principal Executive
Officer)
KEITH E. TROST* Vice President-Finance and
Administration and Assistant
Secretary of Sears Roebuck
Acceptance Corp. (Principal
Financial and Accounting
Officer)
JAMES A. BLANDA* Director of Sears Roebuck
Acceptance Corp.
JAMES D. CONSTANTINE* Director of Sears Roebuck
Acceptance Corp.
ALICE M. PETERSON** Director of Sears Roebuck
Acceptance Corp.
LARRY R. RAYMOND* Director of Sears Roebuck
Acceptance Corp.
GEORGE F. SLOOK* Director of Sears Roebuck
Acceptance Corp.
EDWARD A. BRENNAN** Director, Chairman of the
Board of Directors,
President and Chief
Executive Officer
of Sears, Roebuck and
Co. (Principal Executive
Officer)
[RIGHT BRACE] March 17, 1995
JAMES M. DENNY** Vice Chairman and Acting
Chief Financial Officer of
Sears, Roebuck and Co.
(Principal Financial
Officer)
JAMES A. BLANDA** Vice President and Controller
of Sears, Roebuck and Co.
(Principal Accounting
Officer)
HALL ADAMS, JR.** Director of Sears, Roebuck
and Co.
WARREN L. BATTS** Director of Sears, Roebuck
and Co.
JAMES W. COZAD ** Director of Sears, Roebuck
and Co.
WILLIAM E. LAMOTHE** Director of Sears, Roebuck
and Co.
ARTHUR C. MARTINEZ** Director of Sears, Roebuck
and Co.
MICHAEL A. MILES** Director of Sears, Roebuck
and Co.
SYBIL C. MOBLEY** Director of Sears, Roebuck
and Co.
NANCY C. REYNOLDS** Director of Sears, Roebuck
and Co.
CLARENCE B. ROGERS, JR.** Director of Sears, Roebuck
and Co.
DONALD H. RUMSFELD** Director of Sears, Roebuck
and Co.
*By /s/ KEITH E. TROST Individually and as Attorney-in-fact
Keith E. Trost
**By /s/ ALICE M. PETERSON Individually and as Attorney-in-fact
Alice M. Peterson
Exhibit 1(b)
UNDERWRITING AGREEMENT
,199
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware 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 4 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 4 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
7Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. Each of the Company and Sears, Roebuck and Co.
("Sears") 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"); and
(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.
3. The Company represents and warrants to, and agrees
with each of the Underwriters that:
(a) 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;
(b) 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 material to the Company pursuant to the terms of,
any indenture, loan agreement or other agreement or instrument
for borrowed money to which the Company is a party or by which
the Company may be bound or to which any of the property or
assets of the Company, material to the Company, is subject,
nor will such action result in any material violation of the
provisions of the Certificate of Incorporation, as amended 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
(c) 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.
4. 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 5
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.
5. 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, by certified or official
bank check or checks or wire transfer, as specified in such
Pricing Agreement, to the order of the party designated in the
Pricing Agreement relating to such Securities 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.
6. Each of the Company and Sears 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 or Sears, respectively,
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 the Company or Sears 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 neither the Company nor Sears shall 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; and
(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 latest of (x) the effective date of
the Registration Statement, (y) the effective date of the
post-effective amendment thereto hereinafter referred to, and
(z) the date of the filing of the report hereinafter referred
to, earnings statements of the Company and Sears 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 after the
latest of (i) the effective date of such Registration
Statement, (ii) the effective date of the post-effective
amendment, if any, to such Registration Statement (within the
meaning of Rule 158) next preceding the date of the Pricing
Agreement relating to the Designated Securities and (iii) the
date of filing of the last report of the Company or Sears
incorporated by reference into the Prospectus (within the
meaning of Rule 158) next preceding the date of the Pricing
Agreement relating to the Designated Securities.
7. The Company agrees with each of the Underwriters of
Designated Securities:
(a) 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
(b) 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.
8. 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 or Sears herein
are, at and as of the Time of Delivery for such Designated
Securities, true and correct, the condition that each of the
Company and Sears 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 and Sears 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) Each of the Company and Sears has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its respective state of
incorporation;
(ii) The authorized capital stock of the
Company consists of 500,000 shares of common stock, par value
$100.00 per share, of which 350,00 shares are issued and
outstanding and owned by Sears, Roebuck and Co., and the
authorized capital stock of Sears is as set forth or
incorporated by reference in the Registration Statement;
(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 and Sears;
(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 material to
the Company, 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 is a party or by
which the Company may be bound or to which any of the property
or assets of the Company material to the Company is subject,
(b) result in any material violation of the provisions of the
Certificate of Incorporation, as amended 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 pursuant to 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 Sears 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, Sears and its
business groups and 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 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, stockholders'
equity or results of operations of the Company, 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 agency 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) Each of the Company and Sears 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 and Sears, respectively, herein and as to the
performance by each of the Company and Sears 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 8.
9. (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 Sears, 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
9 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 and Sears 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 or Sears
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 or Sears 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 9
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 9 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 or
Sears and to each person, if any, who controls the Company
within the meaning of the Act.
10. (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 7(b) hereof and the indemnity and contribution
agreements in Section 9 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its
default.
11. The respective indemnities, agreements,
representations, warranties and other statements of the
Company, Sears 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, the
Company, Sears or any officer or director or controlling
person of the Company or Sears, 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 9 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 or Sears pursuant to subdivision (h) of Section 8
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 or
Sears 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
or Sears, 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 or
Sears the matter has been settled by controlling precedent,
the Company or Sears will, if a claim for such indemnification
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.
12. If any Pricing Agreement shall be terminated
pursuant to Section 10 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 7(b) and Section 9 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 7(b) and Section 9 hereof.
13. 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
, 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 3711 Kennett Pike, Greenville, Delaware 19807,
Attention: Richard F. Kotz, Secretary; and if to Sears shall
be sufficient in all respects if delivered or sent by
registered mail to Sears at Sears Tower, Chicago, Illinois
60684, Attention: David Shute, Senior Vice President, General
Counsel and Secretary.
14. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the
Underwriters, the Company, Sears and, to the extent provided
in Section 9 and Section 11 hereof, the officers and directors
of the Company and Sears 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.
15. Time shall be of the essence of each Pricing
Agreement.
16. This Agreement and each Pricing Agreement shall be
governed by, and construed in accordance with, the internal
laws of the State of New York.
17. 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 ACCEPTANCE CORP.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted as of the date hereof:
On behalf of each of the Underwriters
<PAGE>
ANNEX I
PRICING AGREEMENT
As Representatives of the several
Underwriters named in Schedule I hereto
,199
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware 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 and Sears, Roebuck and Co. ("Sears"), 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 Sections 2 and 3 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, Sears 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 ACCEPTANCE CORP.
By:
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., New York 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 Sears, [ ]
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 ACCEPTANCE CORP.,
c/o
Attention:
,199
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from Sears
Roebuck Acceptance Corp. (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:
Delivery Date Principal
Amount Date from Which
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 New York Clearing House funds at
the office of Sears Roebuck Acceptance Corp., Greenville,
Delaware] [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 and Sears, Roebuck and Co. ("Sears"), 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 and Sears
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 New York.
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 Greenville, Delaware
SEARS ROEBUCK ACCEPTANCE CORP.
By
(Title)
SEARS ROEBUCK ACCEPTANCE CORP.
AND
,
Trustee
Indenture
Dated as of
SEARS ROEBUCK ACCEPTANCE CORP.
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
Authenticating Agent I-1
Board I-1
Business Day I-1
Certified Resolution I-1
Commission I-1
Company I-1
Currency I-1
Defaulted Interest I-1
Depository I-1
Dollar I-2
ECU I-2
Eligible Obligations I-2
European Communities I-2
Foreign Currency I-2
Global Security I-2
Holder I-2
Indenture I-3
Interest I-3
Interest Payment Date I-3
Market Exchange Rate I-3
Maturity I-3
{New York Location I-3}
Officers' Certificate I-3
Opinion of Counsel I-3
Original Issue Discount Security I-4
Outstanding I-4
Person I-4
Redemption Date I-4
Redemption Price I-4
Regular Record Date I-4
Responsible Officer I-4
Securities I-5
Security Register I-5
Special Record Date I-5
Stated Maturity I-5
Subsidiary; Voting Stock I-5
Trustee I-5
U.S. Government Obligations I-5
SECTION 1.2. Trust Indenture Act definitions controlling I-5
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-5
SECTION 2.8. Persons Deemed Owners II-6
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-7
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. File certain reports and information with the
Trustee and the Securities and Exchange Commission III-1
Transmit to Holders summaries of certain documents
filed with the Trustee III-2
Furnish list of Holders to the Trustee III-2
SECTION 3.4. File statement by officers annually with the
Trustee III-2
SECTION 3.5. Duties of paying agent III-2
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
SECTION 4.8. Special Redemption Provision 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-5
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. Opinion of Counsel to Trustee IX-1
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-2
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 XIV-3
SIGNATURES AND SEALS XIV-3
ACKNOWLEDGMENTS XIV-4
SEARS ROEBUCK ACCEPTANCE CORP.
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) 3.3 (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) 3.3 (a)
(a)(2) 3.3 (b)
(a)(3) 3.3 (c)
(a)(4) 3.4
(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) 3.5
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
ACCEPTANCE CORP. (hereinafter called the ``Company''), a corporation
organized and existing under the laws of the State of Delaware, and
(hereinafter called the ``Trustee''), a corporation
organized and existing under the laws of , 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.
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 Wilmington, 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 Acceptance Corp. and, subject
to the provisions of Article IX, shall also include its successors and
assigns.
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.
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.
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.
{New York Location
The Term ``New York Location'' shall mean the location in the Borough of
Manhattan of The City of New York at which at any particular time the
Trustee receives and redelivers securities pursuant to applicable
securities exchange rules, which location at the date of execution of this
Indenture is .}
Officers' Certificate
The term ``Officers' Certificate'' shall mean a certificate signed by the
Chairman of the Board, the Chief Executive Officer, the President or any
Vice President and by the Vice President, Finance, 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.
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 the chairman of the board of directors, the president, every
vice president (whether or not designated by a number or a word or words
added before or after the title ``vice president''), the secretary, every
trust officer, every assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, or to whom
any corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
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.
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 trustee or trustees hereunder for the
time being, whether original or successor.
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 referred to in the
within-mentioned Indenture.
,
as Trustee
By
Authorized Officer
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, its Chief Executive Officer, 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, its Chief Executive
Officer, 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, its Chief Executive Officer, 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 only 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.
All cancelled Securities held by the Trustee shall be disposed of as
directed by a written order of the Company signed by its Chairman of the
Board, 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 any one or more 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 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 for all of the above purposes shall be
.
SECTION 3.3. 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 3.3 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 3.4. 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, the Chief
Executive Officer 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 signatories 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 3.4, ``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 3.5. 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, that 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
3.5) 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 or Securities so issued shall be a Global
Security or Global Securities.
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 a majority 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 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 a majority 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 a majority 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 proceeding 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 Section 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 record date 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 3.3
(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, STOCKHOLDERS,
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, stockholder, 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, stockholders, 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, stockholder, 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 all or substantially all of the property and
assets of the Company 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 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 all or substantially all of the property and
assets of the Company, 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. 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 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 Delaware 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 so
elects 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 3.3 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 State of Delaware
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.
As Authenticating Agent
By
Authorized Officer
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 the 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 of
Wilmington, Delaware, the city in which the principal corporate trust
office of the Trustee is located or in 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 a majority 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 of Wilmington, Delaware, the city in which the
principal corporate trust office of the Trustee is located or in 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 3.3 (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, its Chief
Executive Officer, its President or one of its Vice Presidents and by its
Vice President, Finance, 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 3.4 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 office of the Trustee,
attention: . 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 President, at 3711 Kennett Pike,
Greenville, DE 19807, 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 .
IN WITNESS WHEREOF, SEARS ROEBUCK ACCEPTANCE CORP. has caused this
Indenture to be signed in its corporate name by its
, and its corporate seal to be affixed hereto and attested to by one
of its and
has caused this Indenture to be signed in its corporate
name by one of its and impressed with its corporate seal,
attested to by one of its , all as of the day and year
first above written.
SEARS ROEBUCK ACCEPTANCE CORP.
By
(CORPORATE SEAL)
Attest:
By
(CORPORATE SEAL)
Attest:
STATE OF DELAWARE
[RIGHT BRACE] SS.:
COUNTY OF NEW CASTLE
I, , a Notary Public in and for the County
and State aforesaid, DO HEREBY CERTIFY that , the
, and , ,
of SEARS ROEBUCK ACCEPTANCE CORP., who are personally known to me to be the
same persons whose names are subscribed to the foregoing Indenture as such
and , 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}
STATE OF
[RIGHT BRACE] SS.:
COUNTY OF
I, , a Notary Public in and for the County and State
aforesaid, DO HEREBY CERTIFY that , ,
and , , of
, Trustee under the foregoing Indenture, who are personally
known to me to be the same persons whose names are subscribed to the
foregoing instrument as such and 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
corporation for the uses and purposes therein set forth, and caused the
corporate seal of said corporation to be thereto affixed.
GIVEN under my hand and notarial seal, this day of
.
Notary Public
My Commission Expires:
{SEAL}
Exhibit 5
SEARS, ROEBUCK AND CO.
SEARS TOWER
CHICAGO, ILLINOIS 60684
ROBERT J. PENCE
Senior Counsel
Corporate Law-Dept. 966
312-875-1823
March 17, 1995
Sears Roebuck Acceptance Corp.
3711 Kennett Pike
Greenville, Delaware 19870
Sears, Roebuck and Co.
Sears Tower
Chicago, Illinois 60684
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-3 (the
"Registration Statement") to be filed by Sears Roebuck Acceptance Corp. (the
"Company") and Sears, Roebuck and Co. with the Securities and Exchange
Commission on or about March 17, 1995 in connection with the registration
under the Securities Act of 1933, as amended (the "Act"), of $1,000,000
principal amount of debt securities (the "Debt Securities") for an offering
to be made on a continuous or delayed basis pursuant to the provisions of
Rule 415 under the Act. 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.
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 Debt Securities.
Subject to the proposed additional proceedings being taken as now
contemplated prior to the issuance of the Debt Securities and the terms of the
Debt Securities being otherwise in compliance with then applicable law, I am of
the opinion that the Debt Securities will, upon the issuance and sale thereof
in the manner referred to in the Registration Statement, 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 reference to me in the Prospectus which is 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 24(a)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the
undersigned, being a director or officer, or both, of SEARS
ROEBUCK ACCEPTANCE CORP., a Delaware corporation (the
"Corporation"), does hereby constitute and appoint MICHAEL W.
PHILLIPS, GEORGE F. SLOOK, KEITH E. TROST, RICHARD F. KOTZ and
VENRICE R. PALMER, 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 Corporation to comply with the
Securities Act of 1933, as amended, and 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 debt securities to be issued by the Corporation under the
provisions of an appropriate indenture and the qualification
of said indenture under said Trust Indenture Act, including
specifically, but without limitation of the general authority
hereby granted, the power and authority to sign his name in
the name and on behalf of the Corporation or as a director or
officer, or both, of the Corporation, as indicated below
opposite his signature, to the registration statement, or any
amendment, post-effective amendment or papers supplemental
thereto, to be filed in respect of said debt securities; and
each of the undersigned does hereby 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 these presents, as of this day of March, 1995.
NAME TITLE
/s/ Michael W. Phillips Director, President and
Michael W. Phillips Chief Executive Officer
(Principal Executive
Officer)
/s/ Keith E. Trost Vice President - Finance
Keith E. Trost and Administration and
Assistant Secretary
(Principal Financial
and Accounting Officer)
/s/ James A. Blanda Director
James A. Blanda
/s/ James D. Constantine Director
James D. Constantine
/s/ Alice M. Peterson Director
Alice M. Peterson
/s/ Larry R. Raymond Director
Larry R. Raymond
/s/ George F. Slook Director
George F. Slook
/s/ Kevin R. Slawin Director
Kevin R. Slawin
Exhibit 24(b)
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 day of March, 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 1(b)
Sears Roebuck Acceptance Corp.
$_____________ Medium-Term Notes Series III
DISTRIBUTION AGREEMENT
________ __, 199_
Sears Roebuck Acceptance Corp., a Delaware 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
person serving as an agent pursuant to this Agreement
(individually, an "Agent", and collectively, the "Agents") as
set forth herein. 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
________ __, 199_ (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. Each of the Company and Sears, Roebuck and Co.
("Sears") 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"); and
(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.
2. The Company represents and warrants to, and agrees
with, each Agent that:
(a) 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;
(b) 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 material to the Company,
pursuant to the terms of, any indenture, loan agreement or
other agreement or instrument for borrowed money to which the
Company is a party or by which the Company may be bound or to
which any of the property or assets of the Company material to
the Company, is subject, nor will such action result in any
material violation of the provisions of the Certificate of
Incorporation, as amended, 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
(c) 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.
3. (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 3 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):
Commission
(percentage of
aggregate
principal amount
Maturity of Notes sold)
9 months to less than 1 year
1 year to less than 18 month
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
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. $1,000 (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. $1,000 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
Agent, the Company and Sears, including by telecopy or telex.
The Company, Sears 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 3(a) and in accordance with the schedule
set forth therein or established from time to time pursuant
thereto, 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.
4. The documents required to be delivered pursuant to
Section 8 hereof shall be delivered at the offices of the
Company, 3711 Kennett Pike, Greenville, Delaware, at 11:00
a.m., New York time, on the date of this Agreement, or at such
other date and time as the Agents and the Company agree (such
time and date being referred to herein as the "Closing Date").
5. Each of the Company and Sears 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 the Agents with
a copy of the proposed form thereof and given the Agents a
reasonable opportunity to review the same; to advise the
Agents promptly of any such amendment or supplement after such
Time of Delivery and furnish the Agents 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 second business day after
the date on which such Pricing Supplement is first used or the
date of determination of the offering price; and to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company or Sears,
respectively, 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 the
Agents, promptly after the Company or Sears 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 the Agents reasonably may request to qualify the Notes for
offering and sale under the securities laws of such
jurisdictions as the Agents 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 neither the Company nor Sears shall 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 Agents 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 or in the form
first used to confirm sales which was not required to be filed
pursuant to Rule 424 under the Act, in such quantities as the
Agents 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 the
Agents to suspend solicitation of offers to purchase Notes
from the Company (and, if so notified, the Agents shall
promptly cease such solicitations), (ii) prepare and cause to
be filed with the Commission, after having furnished the
Agents with a copy of the proposed form and given the Agents 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 the Agents in
such quantities as the Agents may reasonably request; if such
amendment or supplement, and any documents, certificates and
opinions furnished to the Agents pursuant to Section 8 in
connection with the preparation or filing of such amendment or
supplement are reasonably satisfactory in all respects to the
Agents, the Agents 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 the Agents obligation to solicit
offers to purchase Notes hereunder; if such amendment or
supplement, or any documents, certificates and opinions
furnished to the Agents pursuant to Section 8 in connection
with the preparation or filing of such amendment or
supplement, are not satisfactory to the Agents, the Agents
will as promptly as reasonably practicable notify the Company
and Sears 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 latest of (x) the effective date of
the Registration Statement, (y) the effective date of the
post-effective amendment thereto hereinafter referred to and
(z) the date of filing of the report hereinafter referred to,
an earning statement of the Company and Sears and its
consolidated subsidiaries, respectively, (which need not be
audited) complying with Section 11(a) of the Act and covering
a period of at least twelve consecutive months beginning after
the latest of (i) the effective date of such Registration
Statement, (ii) the effective date of the post-effective
amendment, if any, to such Registration Statement (within the
meaning of Rule 158) and (iii) the date of filing of the last
report of the Company or Sears incorporated by reference into
the Prospectus (within the meaning of Rule 158); and
(e) 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 and Sears 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).
6. The Company covenants and agrees with each Agent
that, 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.
7. 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 the Agents; (ii) the fees and expenses of counsel
for the Agents incurred heretofore or hereafter in connection
with the transactions contemplated hereunder so long as such
fees and expenses have been approved by the Company; (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 7.
8. 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 or Sears 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 each of the Company
and Sears 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 the Agents 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 the Agents' 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 8(b);
(c) Counsel to the Company and Sears, who may be an
employee of the Company or of Sears, shall have furnished to
the Agents 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 Sears proxy statement for its
annual meeting of shareholders or of a filing by the Company
or Sears 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 the
Agents in the Agents' reasonable judgement to the effect that:
(i) Each of the Company and Sears has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its respective state of
incorporation;
(ii) The authorized capital stock of the
Company consists of 500,000 shares of common stock, par value
$100 per share, of which 350,000 shares are issued and
outstanding and owned by Sears, Roebuck and Co., and the
authorized capital stock of Sears is as set forth or
incorporated by reference in the Registration Statement;
(iii) Each of this Agreement and any
applicable Terms Agreement has been duly authorized, executed
and delivered on the part of the Company, and this Agreement
has been duly authorized, executed and delivered on the part
of Sears;
(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, material to
the Company, 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 is a party or by
which the Company may be bound or to which any of the property
or assets of the Company, material to the Company, is subject,
(b) result in any material violation of the provisions of the
Certificate of Incorporation, as amended, 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 pursuant to 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 Sears 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, Sears and its
business groups and 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 Sears and its
subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Agents a
letter or letters, dated the Closing Date or such applicable
date, as the case may be, in form and substance satisfactory
to the Agents, 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 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, stockholders' equity or
results of operations of the Company, 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 the Agents are
soliciting offers to purchase Notes, including the period
between the date that any Agent agreed to purchase such 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 the
Agents written notice prior to the execution of the Terms
Agreement;
(g) During the period in which the Agents are
soliciting offers to purchase Notes, including the period
between the date that any Agent agreed to purchase such 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
the Agents' judgment, renders it inadvisable to proceed with
the solicitation by the Agents of offers to purchase Notes
from the Company or the purchase by the Agents of Notes from
the Company as principal, as the case may be; and
(h) Each of the Company and Sears shall have
furnished or caused to be furnished to the Agents 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
Sears proxy statement for its annual meeting of shareholders
or of a filing by the Company or Sears 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 is 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 and Sears satisfactory to the Agents, 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 and Sears, respectively, herein
and as to the performance by each of the Company and Sears 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 the Agents similar
certificates satisfactory to the Agents as to the matters set
forth in subdivision (a) of this Section 8.
9. (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 Sears, 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 the Agents 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
9 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 and Sears 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 or Sears 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 or Sears 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 9
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 9 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 or Sears and to each person, if any, who controls the
Company within the meaning of the Act.
10. 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.
11. The respective indemnities, agreements,
representations, warranties and other statements by any Agent,
the Company and Sears 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, Sears, or any
officer or director or any controlling person of the Company,
Sears or any Agent, and shall survive each delivery of and
payment for any of the Notes.
12. 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 3(a), Section
7, Section 9, Section 10 and Section 11.
13. 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 3711 Kennett Pike,
Greenville, Delaware 19807, Attention: Richard F. Kotz,
Secretary, Facsimile Transmission No. (302) 888-3193, and if
to Sears shall be sufficient in all respects when delivered or
sent by facsimile transmission or registered mail to Sears 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.
14. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent,
the Company and Sears, and to the extent provided in Section
9, Section 10 and Section 11 hereof, the officers and
directors of the Company and Sears 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.
15. 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 or 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 of Wilmington.
16. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the internal
laws of the State of New York.
17. This Agreement (including such Appointments and
Acceptances of Agent as may be executed and delivered by the
Company and Sears and accepted by one or more Agents from time
to time) 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.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By:
_______________________
SEARS, ROEBUCK AND CO.
By:
_____________________________
Agents Designated Hereby:
______________________________________________
Address:_______________________________________
Facsimile Transmission No.:_______________________
[Other terms of Agent's appointment, if any, including the
duration of appointment if limited other than pursuant to
Section 12]
Accepted in New York, New York, as of the date [set forth on
the first page of the Distribution Agreement]:
______________________________________________
By:___________________________________________
<PAGE>
ANNEX I
Sears Roebuck Acceptance Corp.
$ Medium Term Notes Series III
TERMS AGREEMENT
_______________________
_______________________
_______________________
Dear Sirs: ,199
Sears Roebuck Acceptance Corp. (the "Company") proposes,
subject to the terms and conditions stated herein and in the
Distribution Agreement, dated ___________, 199_ (the
"Distribution Agreement"), between the Company and Sears,
Roebuck and Co. ("Sears") 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 the "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
Sections 1 and 2 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 two 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, the Company and
Sears.
SEARS ROEBUCK ACCEPTANCE CORP.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted:
[__________________________________________
By: _______________________________]
<PAGE>
SCHEDULE TO ANNEX I
Title of Purchased Notes:
[Medium-Term Notes, Series III]
[ % 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:
immediately available funds
Indenture:
Indenture, dated as of ________ __, 199_, 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 8(c).]
[(2) The accountants' letter referred to in Section
8(d).]
[(3) The officers' certificate referred to in Section
8(h).]
Lock-Out Provisions:
[Describe modifications, if any, to the lock-out
provisions set forth in Section 6 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 Acceptance Corp.
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 Acceptance Corp. (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 ________ __, 199_
(the "Distribution Agreement"), between the Company, Sears,
Roebuck and Co. ("Sears") 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 ________ __, 199_ (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 8, will (unless the Company and
such Agent otherwise agree) be set forth in a Terms Agreement
entered into between such Agent and the Company and Sears
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 but not more than thirty years 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. $10,000 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 a
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 fifth
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 any
of New York City, the City of Chicago or the City of
Wilmington and, (i) if the Note is denominated in a currency
other than U.S. dollars, in the capital 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, and
(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 Item 501(c)(7) or 508 of
Regulation S-K promulgated by the Commission, including, but
not limited to, 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 8(c),
8(d) and 8(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, dated ________ __, 199_, and a
Medium-Term Note Certificate Agreement, dated _______ __, 19__
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 the
Settlement Date.
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 of 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 Fedwire
(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 Paragraph __ of
the Letter of Representations.
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 the Letter or 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
_____________________ 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 ___________________ 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 8(d) of the Distribution Agreement,
the Company's and Sears independent certified public
accountants shall furnish letters to the effect that:
(i) They are independent certified public
accountants with respect to the Company and Sears 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
Sears and certain of its subsidiaries, inspection of the
minute books of the Company and Sears 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 Sears
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 of
the Company and of Sears and its consolidated subsidiaries
included or 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
(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, or any decreases in net
assets or other items specified by the Agents, in each case as
compared with amounts shown or included in the latest
statement of financial position of the Company 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; 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 Sears 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 Sears 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 8(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 8(d) thereof.
