<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1996
REGISTRATION STATEMENT NO. 33-64215
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SEARS, ROEBUCK AND CO.
SEARS ROEBUCK ACCEPTANCE CORP. (EXACT NAME OF CO-REGISTRANT AS
(EXACT NAME OF REGISTRANT AS SPECIFIED SPECIFIED IN ITS CHARTER)
IN ITS CHARTER) NEW YORK
(STATE OF
DELAWARE 51-0080535 INCORPORATION) 36-1750680
(STATE OF (I.R.S. EMPLOYER (I.R.S. EMPLOYER
INCORPORATION) IDENTIFICATION IDENTIFICATION
NO.) NO.)
3333 BEVERLY ROAD
HOFFMAN ESTATES, ILLINOIS 60179
3711 KENNETT PIKE
GREENVILLE, DELAWARE 19807 (847) 286-2500
(ADDRESS, INCLUDING ZIP CODE, AND
(302) 888-3100 TELEPHONE NUMBER,
(ADDRESS, INCLUDING ZIP CODE, AND INCLUDING AREA CODE, OF CO-
TELEPHONE NUMBER, REGISTRANT'S PRINCIPAL EXECUTIVE
INCLUDING AREA CODE, OF REGISTRANT'S OFFICES)
PRINCIPAL EXECUTIVE OFFICES)
KEITH E. TROST
PRESIDENT MICHAEL D. LEVIN, ESQ.
SEARS ROEBUCK ACCEPTANCE CORP. SENIOR VICE PRESIDENT AND GENERAL
3711 KENNETT PIKE COUNSEL
SEARS, ROEBUCK AND CO.
GREENVILLE, DELAWARE 19807
(302) 888-3100 3333 BEVERLY ROAD
HOFFMAN ESTATES, ILLINOIS 60179
(847) 286-2500
(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.
SECRETARY CARL E. WITSCHY, ESQ.
ASSISTANT GENERAL COUNSEL
SEARS ROEBUCK ACCEPTANCE LATHAM & WATKINS
CORP. SEARS, ROEBUCK AND CO.
3711 KENNETT PIKE SEARS TOWER, SUITE 5800
3333 BEVERLY ROAD
GREENVILLE, DELAWARE
19807 HOFFMAN ESTATES, ILLINOIS CHICAGO, ILLINOIS 60606
60179
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE(2)
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<S> <C> <C> <C> <C>
Debt Securities......... $2,000,000,000 100% $2,000,000,000 $689,655.17
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</TABLE>
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(1) Pursuant to Rule 429, the prospectus included in this registration
statement is a combined prospectus and also relates to Debt Securities
having an aggregate initial offering price not in excess of $543,900,000
which have not yet been offered for sale under the original Registration
Statement No. 33-58139 on Form S-3. A filing fee of $1,034,490 was paid
with respect to the $3,000,000,000 amount of Debt Securities registered
pursuant to Registration Statement No. 33-58139, of which $187,553.03
represented the filing fee associated with the amount of such Debt
Securities which has not yet been offered for sale.
(2) A fee of $400,000 was paid with the filing of the registration statement;
an additional fee of $289,655.17 is being paid with the filing of this
amendment.
---------------
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.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+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 FEBRUARY 27, 1996
SEARS ROEBUCK ACCEPTANCE CORP.
DEBT SECURITIES
-----------
Sears Roebuck Acceptance Corp. ("SRAC") from time to time may offer up to
$2,543,900,000 aggregate initial offering price 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 SECURI-
TIES 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.
February , 1996
<PAGE>
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
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
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.............................................................. 10
Experts.................................................................... 10
</TABLE>
2
<PAGE>
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, Citicorp Center, 500 W. Madison Street, Chicago,
Illinois 60661; 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 and other information concerning SRAC can
also be inspected at the office of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. Reports, proxy statements and other
information concerning Sears can also be inspected at the offices of the New
York Stock Exchange, Inc., 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, 1994 and the
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, June
30 and September 30, 1995 and April 1, July 1 and September 30, 1995,
respectively, filed by SRAC and Sears, and the Current Reports on Form 8-K for
January 17, February 7, April 20, April 25, May 15, June 1, June 20 and
November 8, 1995 and February 7, 1996 filed by Sears and for June 8, November
4, 1995 and January 23, 1996 filed by SRAC with the Commission pursuant to
Section 13 of the Exchange Act, are incorporated in and made part of this
Prospectus by reference. Pursuant to Rule 412 promulgated by the Commission
pursuant to the Act, the information incorporated by reference in Sears Annual
Report on Form 10-K for the fiscal year ended December 31, 1994 under Items 6
(Selected Financial Data), 7 (Management's Discussion and Analysis of
Financial Condition and Results of Operations) and 8 (Financial Statements and
Supplementary Data) has been superseded by the restated financial information
included in Sears Current Report on Form 8-K for May 15, 1995 reflecting Sears
Allstate Insurance Group as discontinued operations.
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).
3
<PAGE>
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, discrete underwritten debt and
medium-term notes. SRAC uses borrowing proceeds to acquire short-term notes of
Sears and purchase outstanding customer receivable balances from Sears. Sears,
which is a multi-line retailer that conducts Domestic and International
merchandising operations, 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. Subject to the provisions of the Indenture relating to
the Debt Securities, SRAC will be required to maintain a ratio of earnings to
fixed charges (determined in accordance with Item 503(d) of Regulation S-K
promulgated by the Commission) of not less than 1.10 for any fiscal quarter
and cause Sears to maintain ownership of all voting stock of SRAC as long as
any Debt Securities are outstanding, and Sears has agreed to pay SRAC such
amounts as may be necessary for such purpose and to maintain such ownership.
See "Description of Debt Securities."
At December 31, 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 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.
4
<PAGE>
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.
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
-------- -------- --------- --------- ---------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
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
Average daily
outstandings........... $ 3,615 $ 3,812 $ 9,328 $ 10,543 $ 10,340
Agreements with bank trust
departments
Average daily
outstandings........... 124 402 747 643 848
Contractual Credit
Facilities (year-end).... 5,132 4,200 10,812 11,801 10,775
</TABLE>
5
<PAGE>
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, and for the nine-month period ended September 30, 1995 was
1.26. 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.
The ratio of income to fixed charges for Sears and its consolidated
subsidiaries for each of the years ended December 31, 1994, 1993, 1991 and
1990 was 2.06, 1.66, 1.16 and 0.96, respectively, and for the nine- and
twelve-month periods ended September 30, 1995 was 1.84 and 2.08, respectively.
For the year ended December 31, 1992, earnings did not cover fixed charges by
$2,869 million. In the computation of the ratio of income to fixed charges for
Sears and its consolidated subsidiaries, income consists of income from
continuing operations less undistributed net income of unconsolidated
subsidiaries plus fixed charges (excluding capitalized interest) and federal
and state income taxes. Fixed charges consist of interest costs plus the
portion of operating lease rentals which is estimated to represent the
interest element in such rentals.
DESCRIPTION OF DEBT SECURITIES
The following descriptions of the terms of the Debt Securities set forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating
to such Offered Debt Securities.
The Debt Securities are to be issued under one of the Indentures (each, an
"Indenture") referred to in the following sentence, a copy of the form of
which has been filed as an exhibit to the Registration Statement. SRAC has
entered into an Indenture with The Chase Manhattan Bank, N.A., as Trustee, and
may enter into Indentures 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
6
<PAGE>
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, except as otherwise specified in
the Prospectus Supplement relating to a particular series of Offered Debt
Securities, 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)
7
<PAGE>
CERTAIN RESTRICTIONS
The Indenture provides that SRAC will maintain a Fixed Charge Coverage Ratio
for any fiscal quarter of not less than 1.10 and that SRAC will cause Sears to
maintain ownership of all the voting stock of SRAC. "Fixed Charge Coverage
Ratio" means SRAC's ratio of earnings to fixed charges determined in
accordance with Item 503(d) of Regulation S-K promulgated by the Commission,
as in effect on the date of the Indenture. Pursuant to letter agreements
between SRAC and Sears (the "Fixed Charge Coverage and Ownership Agreement"),
Sears has agreed, for the benefit of holders of outstanding Debt Securities,
that, (i) as long as SRAC is so required to maintain such Fixed Charge
Coverage Ratio, Sears will pay SRAC such amounts which, together with any
other earnings available therefore, are sufficient for SRAC to maintain such
Fixed Charge Coverage Ratio and (ii) as long as SRAC is so required to cause
Sears to maintain ownership of SRAC, Sears will maintain such ownership. The
Indenture provides that SRAC (i) will cause Sears to observe and perform in
all material respects all covenants or agreements of Sears contained in the
Fixed Charge Coverage and Ownership Agreement and (ii) will not amend, waive,
terminate or otherwise modify any provision of the Fixed Charge Coverage and
Ownership Agreement. (Sections 1.1, 3.6)
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 for borrowed money of SRAC (including acceleration with
respect to Debt Securities other than that series) or Sears 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)
8
<PAGE>
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
The Chase Manhattan Bank, N.A., which is a Trustee under an Indenture,
performs other services for 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.
9
<PAGE>
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.
LEGAL OPINION
Unless otherwise specified in the accompanying Prospectus Supplement, the
legality of the Debt Securities is being passed upon for SRAC by Barbara E.
Rohde, Counsel, Law Department, of Sears. At January 31, 1996, Ms. Rohde owned
407 Sears common shares, including shares credited to her account in The
Savings and Profit Sharing Fund of Sears Employees as of December 31, 1995,
and had options granted under the Sears employees stock plans relating to
2,122 shares.
EXPERTS
The financial statements and Summary Financial Information incorporated by
reference and included in this prospectus, respectively, and the financial
statements from which the Summary Financial Information included in this
Prospectus have been derived, have been audited by Deloitte & Touche LLP,
independent certified public accountants, as stated in their reports
incorporated by reference herein, and with respect to the Summary Financial
Information has been included as Exhibit 99 to the Registration Statement.
Such financial statements and Summary Financial Information have been
incorporated by reference and included herein, respectively, in the
Registration Statement in reliance upon the reports of such firm and given
upon their authority as experts in accounting and auditing.
With respect to the unaudited interim financial information which is
incorporated herein by reference, Deloitte & Touche LLP have applied limited
procedures in accordance with professional standards for a review of such
information. However, as stated in their reports included in the Quarterly
Reports on Form 10-Q for the quarters ended April 1, July 1 and September 30,
1995 for Sears and March 31, June 30 and September 30, 1995 for SRAC and
incorporated by reference herein, they did not audit and they did not express
an opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Deloitte & Touche LLP are
not subject to the liability provisions of Section 11 of the Securities Act of
1933 for their reports on the unaudited interim financial information because
those reports are not "reports" or a "part" of the registration statement
prepared or certified by an accountant within the meaning of Sections 7 and 11
of the Act.
10
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION S.E.C.
<TABLE>
<S> <C>
Registration Fee........................................... $689,655.17
*Rating Agency Fee......................................... 222,000.00
*State Qualification Expense (including legal fees)........ 40,000.00
*Trustee's Fees............................................ 9,000.00
*Printing and Engraving.................................... 60,000.00
*Legal Fees................................................ 70,000.00
*Auditors' Fees............................................ 50,000.00
*Miscellaneous............................................. 19,344.83
-------------
Total.................................................. $1,160,000.00
=============
</TABLE>
- --------
*estimated
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.
II-1
<PAGE>
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.
<TABLE>
<C> <S> <C>
1(a) Form of Underwriting Agreement.*
1(b) Form of Distribution Agreement.*
4(a) Form of Indenture.*
4(b) Indenture dated as of May 15, 1995 between Sears Roebuck
Acceptance Corp. and The Chase Manhattan Bank, N.A.*
4(c) Fixed Charge Coverage and Ownership Agreement dated as of
May 15, 1995 between Sears Roebuck Acceptance Corp. and
Sears, Roebuck and Co. (incorporated by reference to
Exhibit 4(e) to registrant's Current Report on Form 8-K
for June 8, 1995, File No. 1-4040).
4(d) Form of Extension Agreement between Sears Roebuck
Acceptance Corp. and Sears, Roebuck and Co.
5 Opinion of Barbara E. Rohde.*
12(a) Calculation of Ratio of Earnings to Fixed Charges for
Sears Roebuck Acceptance Corp. for the year ended December
31, 1994 (incorporated by reference to Exhibit 12 to
registrant's Annual Report on Form 10-K for the year ended
December 31, 1994, File No. 1-4040).
12(b) Calculation of Ratio of Earnings to Fixed Charges for
Sears Roebuck Acceptance Corp. for the year ended December
31, 1993 (incorporated by reference to Exhibit 12 to
registrant's Annual Report on Form 10-K for the year ended
December 31, 1993, File No. 1-4040).
12(c) Calculation of Ratio of Earnings to Fixed Charges for
Sears Roebuck Acceptance Corp. for the year ended December
31, 1992 (incorporated by reference to Exhibit 12 to
registrant's Annual Report on Form 10-K for the year ended
December 31, 1992, File No. 1-4040).
</TABLE>
II-2
<PAGE>
<TABLE>
<C> <S> <C>
12(d) Calculation of Ratio of Earnings to Fixed Charges for
Sears Roebuck Acceptance Corp. for the year ended December
31, 1991 (incorporated by reference to Exhibit 12 to
registrant's Annual Report on Form 10-K for the year ended
December 31, 1991, File No. 1-4040).
12(e) Calculation of Ratio of Earnings to Fixed Charges for
Sears Roebuck Acceptance Corp. for the year ended December
31, 1990 (incorporated by reference to Exhibit 12 to
registrant's Annual Report on Form 10-K for the year ended
December 31, 1990, File No. 1-4040).
12(f) Calculation of Ratio of Earnings to Fixed Charges for
Sears Roebuck Acceptance Corp. for the nine-month period
ended September 30, 1995 (incorporated by reference to
Exhibit 12 to registrant's Quarterly Report on Form 10-Q
for the quarterly period ended September 30, 1995, File
No. 1-4040).
12(g) Calculation of Ratio of Income to Fixed Charges for Sears,
Roebuck and Co. and consolidated subsidiaries for each of
the five years ended December 31, 1994, and for the
twelve- and nine-month periods ended September 30, 1995
(incorporated by reference to Exhibit 12 to Sears
Quarterly Report on Form
10-Q for the quarterly period ended September 30, 1995,
File No. 1-416).
15(a) Acknowledgement of awareness from Deloitte & Touche LLP
concerning unaudited interim financial information (Sears
Roebuck Acceptance Corp.).*
15(b) Acknowledgement of awareness from Deloitte & Touche LLP
concerning unaudited interim financial information (Sears,
Roebuck and Co.).*
23(a) Consent of Deloitte & Touche LLP (Sears Roebuck Acceptance
Corp.).*
23(b) Consent of Deloitte & Touche LLP (Sears, Roebuck and
Co.).*
23(c) Consent of Barbara E. Rohde (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.*
99 Report of Independent Certified Public Accountants.*
</TABLE>
- --------
*Filed herewith.
**Previously filed.
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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
II-3
<PAGE>
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.
II-4
<PAGE>
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 AMENDMENT TO THE REGISTRATION STATEMENT TO BE SIGNED ON THEIR BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN GREENVILLE, STATE OF DELAWARE,
AND HOFFMAN ESTATES, STATE OF ILLINOIS, RESPECTIVELY, ON THE 27TH DAY OF
FEBRUARY, 1996.
Sears Roebuck Acceptance Corp.
Keith E. Trost*
By___________________________________
Keith E. Trost
President
Sears, Roebuck and Co.
Alice M. Peterson**
By___________________________________
Alice M. Peterson
Vice President and Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Keith E. Trost* Director and President of February 27, 1996
____________________________________ Sears Roebuck Acceptance
Keith E. Trost Corp. (Principal Executive
Officer)
/s/ Stephen D. Carp* Vice President, Finance and February 27, 1996
____________________________________ Assistant Secretary of
Stephen D. Carp Sears Roebuck Acceptance
Corp. (Principal Financial
and Accounting Officer)
/s/ James A. Blanda* Director of Sears Roebuck February 27, 1996
____________________________________ Acceptance Corp.
James A. Blanda
/s/ James D. Constantine* Director of Sears Roebuck February 27, 1996
____________________________________ Acceptance Corp.
James D. Constantine
/s/ Alan J. Lacy* Director of Sears Roebuck February 27, 1996
____________________________________ Acceptance Corp.
Alan J. Lacy
/s/ Alice M. Peterson** Director of Sears Roebuck February 27, 1996
____________________________________ Acceptance Corp.
Alice M. Peterson
/s/ Larry R. Raymond* Director of Sears Roebuck February 27, 1996
____________________________________ Acceptance Corp.
Larry R. Raymond
/s/ George F. Slook* Director of Sears Roebuck February 27, 1996
____________________________________ Acceptance Corp.
George F. Slook
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Arthur C. Martinez** Director, Chairman of the February 27, 1996
____________________________________ Board of Directors,
Arthur C. Martinez President and Chief
Executive Officer of
Sears, Roebuck and Co.
(Principal Executive
Officer)
/s/ Alan J. Lacy** Executive Vice President and February 27, 1996
____________________________________ Chief Financial Officer of
Alan J. Lacy Sears, Roebuck and Co.
(Principal Financial
Officer)
/s/ James A. Blanda** Vice President and February 27, 1996
____________________________________ Controller of Sears,
James A. Blanda Roebuck and Co. (Principal
Accounting Officer)
/s/ Hall Adams, Jr.** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
Hall Adams, Jr.
/s/ Warren L. Batts** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
Warren L. Batts
/s/ James W. Cozad** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
James W. Cozad
/s/ William E. Lamothe** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
William E. Lamothe
/s/ Michael A. Miles** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
Michael A. Miles
/s/ Nancy C. Reynolds** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
Nancy C. Reynolds
/s/ Clarence B. Rogers, Jr.** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
Clarence B. Rogers, Jr.
/s/ Donald H. Rumsfeld** Director of Sears, Roebuck February 27, 1996
____________________________________ and Co.
Donald H. Rumsfeld
</TABLE>
/s/ Keith E. Trost
*By____________________________
Keith E. Trost
Individually and as
Attorney-in-fact
/s/ Alice M. Peterson
**By___________________________
Alice M. Peterson
Individually and as
Attorney-in-fact
II-6
<PAGE>
Exhibit 4(a)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEARS ROEBUCK ACCEPTANCE CORP.
AND
TRUSTEE
----------------
INDENTURE
DATED AS OF
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
INDENTURE
DATED AS OF
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
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
Fixed Charge Coverage and Ownership Agreement............ I-2
Fixed Charge Coverage Ratio.............................. I-2
Foreign Currency......................................... I-2
Global Security.......................................... I-2
Holder................................................... I-2
Indenture................................................ I-3
Interest................................................. I-3
Market Exchange Rate..................................... I-3
Maturity................................................. I-3
[New York Location....................................... I-3]
Officers' Certificate.................................... I-3
Opinion of Counsel....................................... I-4
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-5
Sears.................................................... I-5
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-6
</TABLE>
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*This table of contents shall not, for any purpose, be deemed to be a part of
the Indenture.
<PAGE>
<TABLE>
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Section 1.2. Trust Indenture Act definitions controlling............. I-6
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
Section 3.6. Certain restrictions.................................... III-3
ARTICLE IV
Redemption of Securities
Section 4.1. Applicability of Article................................ IV-1
Section 4.2. Election to Redeem; Notice to Trustee................... IV-1
Section 4.3. Selection by Trustee of Securities to Be Redeemed....... IV-1
Section 4.4. Notice of Redemption.................................... IV-1
Section 4.5. Deposit of Redemption Price............................. IV-2
Section 4.6. Securities Payable on Redemption Date................... IV-2
Section 4.7. Securities Redeemed in Part............................. IV-2
ARTICLE V
Sinking Funds
Section 5.1. Applicability of Article................................ V-1
Section 5.2. Satisfaction of Sinking Fund Payments with Securities... V-1
Section 5.3. Redemption of Securities for Sinking Fund............... V-1
ARTICLE VI
Remedies Upon Default
Section 6.1. Defaults defined--acceleration of maturity upon
default--waiver of default............................. VI-1
</TABLE>
ii
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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
</TABLE>
iii
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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-6
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-8
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-9
Section 10.10. Trustee to make annual report to Holders.............. X-12
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-13
Trustee to give certain information to Holders upon
application.......................................... X-13
Section 10.12. Trustee or an Authenticating Agent may hold Securities
and otherwise deal with Company .....................
X-14
Section 10.13. Trustee may comply with any rule, regulation or order
of the Securities and Exchange Commission............ X-14
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
</TABLE>
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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
</TABLE>
v
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
RECONCILIATION AND TIE BETWEEN INDENTURE
DATED AS OF MAY 15, 1995
AND
TRUST INDENTURE ACT OF 1939, AS AMENDED
<TABLE>
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TRUST INDENTURE ACT SECTION INDENTURE SECTION
<S> <C>
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
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
<PAGE>
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 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:
<PAGE>
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
I-1
<PAGE>
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.
Fixed Charge Coverage and Ownership Agreement
The term "Fixed Charge Coverage and Ownership Agreement" shall mean the
letter agreement between the Company and Sears dated May 15, 1995.
Fixed Charge Coverage Ratio
The term "Fixed Charge Coverage Ratio" shall mean, for any period, the
Company's ratio of earnings to fixed charges, determined for such period in
accordance with Item 503(d) of Regulation S-K promulgated by the Commission,
as in effect on the date hereof.
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.
I-2
<PAGE>
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.
I-3
<PAGE>
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
I-4
<PAGE>
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.
Sears
The term "Sears" shall mean Sears, Roebuck and Co.
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 party named as such above until a
successor becomes such pursuant hereto and thereafter shall mean or include
each party who is then a trustee hereunder, and if at any time there is more
than one such party, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series. If
Trustees with respect to different series of Securities are trustees
hereunder, nothing herein shall constitute the Trustees as co-trustees of the
same trust, and each Trustee shall be the trustee of a trust separate and
apart from any trust administered by any other Trustee with respect to a
different series of Securities.
U.S. Government Obligations
The term "U.S. Government Obligations" shall mean securities which are (i)
direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
I-5
<PAGE>
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.
I-6
<PAGE>
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);
II-1
<PAGE>
(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
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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.
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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.
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<PAGE>
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.
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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
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<PAGE>
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.
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<PAGE>
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.
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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 provided in this Indenture 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
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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.
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Section 3.6. The Company will:
(a) maintain a Fixed Charge Coverage Ratio for any fiscal quarter of not
less than 1.10;
(b) cause Sears to continue to own and to hold all legal title to and
beneficial interest in all of the outstanding voting stock of the Company;
(c) cause Sears to observe and perform in all material respects all
covenants or agreements of Sears contained in the Fixed Charge Coverage and
Ownership Agreement; and
(d) not amend, waive, terminate or otherwise modify any provision of the
Fixed Charge Coverage and Ownership Agreement.
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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.
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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.
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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.
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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 or Sears is subject or any applicable law or any government decree,
if an event of default as defined in any mortgage, indenture or instrument,
under which there may be issued, or by which there may be secured or
evidenced, any indebtedness for borrowed money of the Company or of Sears
(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 Sears 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
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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
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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
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incurred, and all advances made, by the Trustee except as a result of its
negligence or willful misconduct;
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
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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
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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.
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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
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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.
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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.
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ARTICLE IX
Merger, Consolidation or Sale
Section 9.1. Nothing in this Indenture shall prevent any consolidation or
merger of the Company with or into any other corporation, or any consolidation
or merger of any other corporation with or into the Company, or any sale or
transfer of its assets and liabilities substantially as an entirety to any
other corporation lawfully entitled to acquire the same; provided, however,
that, so long as Securities are outstanding hereunder, the Company covenants
and agrees, that any such consolidation, merger, sale or transfer shall be
upon the condition that the due and punctual payment of the principal of (or
premium, if any, on) and interest on, all the Securities according to their
tenor, and the due and punctual performance and observance of all the terms,
covenants and conditions of this Indenture to be kept or performed by the
Company shall, by an indenture supplemental hereto, executed and delivered to
the Trustee, be assumed by the corporation (if other than the Company) formed
by or resulting from any such consolidation or merger, or which shall have
received the transfer of the assets and liabilities of the Company
substantially as an entirety, just as fully and effectually as if such
successor corporation had been the original party of the first part hereto;
and in the event of any such sale or transfer the predecessor Company may be
dissolved, wound up and liquidated at any time thereafter.
Section 9.2. Every such successor corporation upon executing an indenture
supplemental hereto, as provided in Section 9.1, in form satisfactory to the
Trustee, shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company; and any order,
certificate or resolution of officers of the Company or the Board provided for
in this Indenture may be made by like officials of such successor corporation.
Such successor corporation may thereupon cause to be signed, either in its own
name or in the name of the Company, with such suitable reference, if any, to
such consolidation, merger, sale or transfer as may be required by the
Trustee, any or all of the Securities of any series which shall not
theretofore have been signed by the Company and authenticated by the Trustee
or an Authenticating Agent on its behalf; and upon the written order of such
successor corporation in lieu of the Company, and subject to all the terms,
conditions and restrictions herein prescribed with respect to the
authentication and delivery of the Securities of any series, the Trustee or an
Authenticating Agent on its behalf shall authenticate and deliver any and all
Securities of that series which shall have been previously signed by the
proper officers of the Company and delivered to the Trustee or an
Authenticating Agent on its behalf for authentication, and any of such
Securities which such successor corporation shall thereafter, in accordance
with the provisions of this Indenture, cause to be signed and delivered to the
Trustee or an Authenticating Agent on its behalf for such purpose. All
Securities of that series so authenticated and delivered shall in all respects
have the same rank as the Securities of that series theretofore or thereafter
authenticated and delivered in accordance with the terms of this Indenture.
In case of any such consolidation, merger, sale or transfer, such changes in
phraseology and form (but not in substance) may be made in the Securities of
any series thereafter to be issued as may be appropriate.
Section 9.3. 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.
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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 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).
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(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. The Company
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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
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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
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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
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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.
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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
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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
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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
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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
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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;
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(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.
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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.
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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
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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 in the Borough of Manhattan of 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.
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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
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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
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(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
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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.
XI-3
<PAGE>
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, the City of Chicago 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, the City of Chicago 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
XII-1
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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
XII-2
<PAGE>
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.
XII-3
<PAGE>
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
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<PAGE>
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
XIII-2
<PAGE>
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.
XIII-3
<PAGE>
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 by or on behalf of the Company 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
XIV-1
<PAGE>
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 .
XIV-2
<PAGE>
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:
- ---------------------------------------
<PAGE>
State of Delaware )
) 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]
<PAGE>
State of )
) 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]
<PAGE>
Exhibit 4(b)
CONFORMED COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEARS ROEBUCK ACCEPTANCE CORP.
AND
THE CHASE MANHATTAN BANK, N.A.,
TRUSTEE
----------------
INDENTURE
DATED AS OF MAY 15, 1995
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
INDENTURE
DATED AS OF MAY 15, 1995
----------------
TABLE OF CONTENTS*
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
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
Fixed Charge Coverage and Ownership Agreement............... I-2
Fixed Charge Coverage Ratio................................. I-2
Foreign Currency............................................ I-2
Global Security............................................. I-2
Holder...................................................... I-3
Indenture................................................... I-3
Interest.................................................... I-3
Market Exchange Rate........................................ I-3
Maturity.................................................... 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
Sears....................................................... I-5
Securities.................................................. I-5
Security Register........................................... I-5
Special Record Date......................................... I-5
</TABLE>
- --------
*This table of contents shall not, for any purpose, be deemed to be a part of
the Indenture.
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
Stated Maturity.......................................... I-5
Subsidiary; Voting Stock................................. I-5
Trustee.................................................. I-5
U.S. Government Obligations.............................. I-6
Section 1.2. Trust Indenture Act definitions controlling.............. I-6
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
Section 3.6. Certain restrictions..................................... III-3
ARTICLE IV
Redemption of Securities
Section 4.1. Applicability of Article................................. IV-1
Section 4.2. Election to Redeem; Notice to Trustee.................... IV-1
Section 4.3. Selection by Trustee of Securities to Be Redeemed........ IV-1
Section 4.4. Notice of Redemption..................................... IV-1
Section 4.5. Deposit of Redemption Price.............................. IV-2
Section 4.6. Securities Payable on Redemption Date.................... IV-2
Section 4.7. Securities Redeemed in Part.............................. IV-2
ARTICLE V
Sinking Funds
Section 5.1. Applicability of Article................................. V-1
Section 5.2. Satisfaction of Sinking Fund Payments with Securities.... V-1
Section 5.3. Redemption of Securities for Sinking Fund................ V-1
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
ARTICLE VI
Remedies Upon Default
<C> <S> <C>
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
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
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
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
ARTICLE XIII
Satisfaction and Discharge of Indenture or Certain Obligations
<C> <S> <C>
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
</TABLE>
v
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
RECONCILIATION AND TIE BETWEEN INDENTURE
DATED AS OF MAY 15, 1995
AND
TRUST INDENTURE ACT OF 1939, AS AMENDED
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<S> <C>
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
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
<PAGE>
INDENTURE, dated as of the 15th day of May, 1995, between Sears Roebuck
Acceptance Corp. (hereinafter called the "Company"), a corporation organized
and existing under the laws of the State of Delaware, and The Chase Manhattan
Bank, N.A. (hereinafter called the "Trustee"), a national banking association
organized and existing under the laws of the United States, 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:
1
<PAGE>
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
I-1
<PAGE>
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.
Fixed Charge Coverage and Ownership Agreement
The term "Fixed Charge Coverage and Ownership Agreement" shall mean the
letter agreement between the Company and Sears dated May 15, 1995.
Fixed Charge Coverage Ratio
The term "Fixed Charge Coverage Ratio" shall mean, for any period, the
Company's ratio of earnings to fixed charges, determined for such period in
accordance with Item 503(d) of Regulation S-K promulgated by the Commission,
as in effect on the date hereof.
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.
I-2
<PAGE>
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.
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.
I-3
<PAGE>
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.
Sears
The term "Sears" shall mean Sears, Roebuck and Co.
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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 party named as such above until a
successor becomes such pursuant hereto and thereafter shall mean or include
each party who is then a trustee hereunder, and if at any time there is more
than one such party, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series. If
Trustees with respect to different series of Securities are trustees
hereunder, nothing herein shall constitute the Trustees as co-trustees of the
same trust, and each Trustee shall be the trustee of a trust separate and
apart from any trust administered by any other Trustee with respect to a
different series of Securities.
U.S. Government Obligations
The term "U.S. Government Obligations" shall mean securities which are (i)
direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the payment of which is unconditionally guaranteed as
a full faith and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligations or a
specific payment of interest on or principal of any such U.S. Government
Obligations held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligations or the specific payment of interest
on or principal of the U.S. Government Obligations evidenced by such
depository receipt.
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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.
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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);
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(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
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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.
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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.
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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.
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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
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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.
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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.
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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 provided in this Indenture 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 1
Chase Plaza, New York, New York 10081, Attention: Institutional Trust Window.
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;
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(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.
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Section 3.6. The Company will:
(a) maintain a Fixed Charge Coverage Ratio for any fiscal quarter of not
less than 1.10;
(b) cause Sears to continue to own and to hold all legal title to and
beneficial interest in all of the outstanding voting stock of the Company;
(c) cause Sears to observe and perform in all material respects all
covenants or agreements of Sears contained in the Fixed Charge Coverage and
Ownership Agreement; and
(d) not amend, waive, terminate or otherwise modify any provision of the
Fixed Charge Coverage and Ownership Agreement.
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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.
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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.
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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.
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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 or Sears is subject or any applicable law or any government decree,
if an event of default as defined in any mortgage, indenture or instrument,
under which there may be issued, or by which there may be secured or
evidenced, any indebtedness for borrowed money of the Company or of Sears
(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 Sears 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
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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
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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:
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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 willful misconduct;
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
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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
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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.
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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,
associationor partnership, such certificate or affidavit shall also
constitute sufficient proof of hisauthority.
(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
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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.
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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.
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ARTICLE IX
Merger, Consolidation or Sale
Section 9.1. Nothing in this Indenture shall prevent any consolidation or
merger of the Company with or into any other corporation, or any consolidation
or merger of any other corporation with or into the Company, or any sale or
transfer of its assets and liabilities substantially as an entirety to any
other corporation lawfully entitled to acquire the same; provided, however,
that, so long as Securities are outstanding hereunder, the Company covenants
and agrees, that any such consolidation, merger, sale or transfer shall be
upon the condition that the due and punctual payment of the principal of (or
premium, if any, on) and interest on, all the Securities according to their
tenor, and the due and punctual performance and observance of all the terms,
covenants and conditions of this Indenture to be kept or performed by the
Company shall, by an indenture supplemental hereto, executed and delivered to
the Trustee, be assumed by the corporation (if other than the Company) formed
by or resulting from any such consolidation or merger, or which shall have
received the transfer of the assets and liabilities of the Company
substantially as an entirety, just as fully and effectually as if such
successor corporation had been the original party of the first part hereto;
and in the event of any such sale or transfer the predecessor Company may be
dissolved, wound up and liquidated at any time thereafter.
Section 9.2. Every such successor corporation upon executing an indenture
supplemental hereto, as provided in Section 9.1, in form satisfactory to the
Trustee, shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company; and any order,
certificate or resolution of officers of the Company or the Board provided for
in this Indenture may be made by like officials of such successor corporation.
Such successor corporation may thereupon cause to be signed, either in its own
name or in the name of the Company, with such suitable reference, if any, to
such consolidation, merger, sale or transfer as may be required by the
Trustee, any or all of the Securities of any series which shall not
theretofore have been signed by the Company and authenticated by the Trustee
or an Authenticating Agent on its behalf; and upon the written order of such
successor corporation in lieu of the Company, and subject to all the terms,
conditions and restrictions herein prescribed with respect to the
authentication and delivery of the Securities of any series, the Trustee or an
Authenticating Agent on its behalf shall authenticate and deliver any and all
Securities of that series which shall have been previously signed by the
proper officers of the Company and delivered to the Trustee or an
Authenticating Agent on its behalf for authentication, and any of such
Securities which such successor corporation shall thereafter, in accordance
with the provisions of this Indenture, cause to be signed and delivered to the
Trustee or an Authenticating Agent on its behalf for such purpose. All
Securities of that series so authenticated and delivered shall in all respects
have the same rank as the Securities of that series theretofore or thereafter
authenticated and delivered in accordance with the terms of this Indenture.
In case of any such consolidation, merger, sale or transfer, such changes in
phraseology and form (but not in substance) may be made in the Securities of
any series thereafter to be issued as may be appropriate.
Section 9.3. 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.
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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 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).
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(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
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trust) for services rendered by it in the execution of the trusts hereby
created. 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. Notwithstanding anything to the contrary herein, the Trustee shall
only be deemed to have notice of an Event of Default (other the pursuant to
Sections 6.1(a) and (b)) when a Vice President, Assistant Vice President or
the officer specifically assigned to administer the Trustee's duties under
this Indenture has actual notice of such Event of Default.
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
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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
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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.
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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.
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(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
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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.
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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
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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.
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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.
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(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
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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
1996, 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
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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
X-14
<PAGE>
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 in the Borough of Manhattan of 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
X-15
<PAGE>
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
X-16
<PAGE>
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.
XI-1
<PAGE>
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.
XI-2
<PAGE>
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.
XI-3
<PAGE>
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, the City of Chicago 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, the City of Chicago 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.
XII-1
<PAGE>
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.
XII-2
<PAGE>
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.
XII-3
<PAGE>
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
XIII-1
<PAGE>
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
XIII-2
<PAGE>
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.
XIII-3
<PAGE>
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 May 15, 1995, 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 by or on behalf of the Company 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
XIV-1
<PAGE>
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, 4 Chase MetroTech Center, 3rd Floor, Brooklyn, NY
11245, attention: Corporate Trust. 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 Delaware.
XIV-2
<PAGE>
In Witness Whereof, Sears Roebuck Acceptance Corp. has caused this Indenture
to be signed in its corporate name by its President, and its corporate seal to
be affixed hereto and attested to by its Secretary and The Chase Manhattan
Bank, N.A. has caused this Indenture to be signed in its corporate name by one
of its Second Vice Presidents and impressed with its corporate seal, attested
to by one of its Assistant Secretaries, all as of the day and year first above
written.
Sears Roebuck Acceptance Corp.
/s/ Keith E. Trost
By ____________________________________
(Corporate Seal)
Attest:
/s/ Richard F. Kotz
- ---------------------------------------
The Chase Manhattan Bank, N.A.
/s/ Edward Morelli
By ____________________________________
(Corporate Seal)
Attest:
/s/ Kathleen E. Perry
- ---------------------------------------
<PAGE>
State of Delaware )
) ss:
County of New Castle )
I, Rose A. Biggs, a Notary Public in and for the County and State aforesaid,
do hereby certify that Keith Trost, the President, and Richard F. Kotz,
Secretary, 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 President and Secretary, 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 12th day of June, 1995.
/s/ Rose A. Biggs
---------------------------------------
Notary Public
My Commission Expires: 11/16/95
[seal]
<PAGE>
State of New York )
) ss:
County of Kings )
I, Joyce Wagner, a Notary Public in and for the County and State aforesaid,
do hereby certify that Edward C. Morrelli, Second Vice President, and Kathleen
Perry, Assistant Secretary, of The Chase Manhattan Bank, N.A., 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 13th day of June, 1995.
/s/ Joyce A. Wagner
---------------------------------------
Notary Public
My Commission Expires: 5/31/96
[seal]
Exhibit 1(a)
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"). 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
the commission payable to the Underwriters with respect thereto
and shall set forth the date, time and manner of delivery of
such Designated Securities and payment therefor. The Pricing
Agreement shall also describe, in a manner consistent with the
Indenture and the registration statement and prospectus with
respect thereto, the principal terms of such Designated
Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any
other rapid transmission device designed to produce a written
record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. 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; and
(b) The issue and sale of the Securities pursuant to any
Pricing Agreement and the compliance by the Company with all of
the provisions of the Securities, the Indenture, this 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 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.
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 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.
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, 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, all
of the issued and outstanding shares of which are 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) SRAC is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(iv) 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;
(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, 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 Fixed Charge Coverage and Ownership Agreement has
been duly authorized, executed and delivered by the parties
thereto and is a valid and binding instrument 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;
(vii) 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, 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;
(viii) 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;
(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 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;
(x) 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
(xi) 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 or Sears 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 3333 Beverly Road, Hoffman Estates,
Illinois, Attention: Michael D. Levin, Senior Vice President and
General Counsel.
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 Underwritiers
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.
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
SCHEDULE I
Principal Amount
of Designated
Securities to be
Underwriter Purchased
_____________
Total . . . . . . . . . . . . . $
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:1
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:2
[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:
Counsel:
To the Company, [ ]
To Sears, [ ]
To the Underwriters, [ ]
[Other Terms]:3
1 The terms of an attached form of security may be incorporated
by reference.
2 The terms of an attached form of security may be incorporated
by reference.
3 The terms of an attached form of security may be incorporated
by reference.
Exhibit 1(b)
Sears Roebuck Acceptance Corp.
$ Medium-Term Notes Series __
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
initial offering price 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):
Maturity Commission (percentage of
aggregate principal
amount of Notes sold)
9 months to less than 1 year..............
1 year to less than 18 months.............
18 months to less than 2 years............
2 years to less than 3 years..............
3 years to less than 4 years..............
4 years to less than 5 years..............
5 years to less than 6 years..............
6 years to less than 7 years..............
7 years to less than 11 years.............
11 years to less than 15 years............
15 years to less than 20 years............
20 years to 30 years......................
Greater than 30 years..................... to be negotiated
Notwithstanding anything herein to the contrary, if, at or prior
to the time of settlement, the Company and an Agent have entered
into, or such Agent has arranged for the Company to enter into,
a contract with respect to the sale of the currency (other than
United States dollars) or currency unit in which a Note has been
denominated and the purchase of which was solicited by such
Agent, the commission in United States dollars payable by the
Company to such Agent shall be based upon the same exchange rate
set forth in such contract.
The authorized denominations of Notes denominated in a currency
or currency unit other than United States dollars shall be
equivalent, as determined by the Market Exchange Rate for such
currency or currency unit on the business day immediately
preceding the date on which the offer for such Notes is
accepted, of U.S. $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, which counsel has
been approved by the Company, incurred heretofore or hereafter
in connection with the transactions contemplated hereunder;
(iii) the cost of printing or reproducing this Agreement, any
Terms Agreement, any Indenture, any Blue Sky and Legal
Investment Memoranda and any other documents in connection with
the offering, purchase, sale and delivery of the Notes; (iv) all
expenses in connection with the qualification of the Notes for
offering and sale under state securities laws as provided in
Section 4(b) hereof, including fees and disbursements of counsel
for the Agents in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (v)
any fees charged by security rating services for rating the
Notes; (vi) any filing fees incident to any required review by
the National Association of Securities Dealers, Inc. of the
terms of the sale of the Notes; (vii) the cost of preparing the
Notes; (viii) the fees and expenses of any Trustee and any
transfer or paying agent of the Company and the fees and
disbursements of counsel for any Trustee or such agent in
connection with any Indenture and the Notes; (ix) on a monthly
basis all out-of-pocket expenses (including without limitation
advertising expenses) incurred by such Agent connected with the
solicitation of offers to purchase and the sale of Notes so long
as such expenses have been approved by the Company; and (x) all
other costs and expenses incident to the performance of the
Company's obligations hereunder (other than costs and expenses
incurred by any Agent) which are not otherwise specifically
provided for in this Section 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, all of
the issued and outstanding shares of which are 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) SRAC is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended;
(iv) 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;
(v) 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;
(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 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;
(vii) The Fixed Charge Coverage and Ownership Agreement has
been duly authorized, executed and delivered by the parties
thereto and is a valid and binding instrument 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;
(viii) 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;
(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 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;
(x) 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
(xi) 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 (ix) 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 and Sears 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 or Sears 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) 888-3150, and if to Sears shall be sufficient in all
respects when delivered or sent by facsimile transmission or
registered mail to Sears at 3333 Beverly Road, Hoffman Estates,
Illinois 60179, Attention: Senior Vice President and General
Counsel, Facsimile Transmission No. (847) 286-2471 with a copy
to the Vice President and Treasurer, Facsimile Transmission No.
(847) 286-3690. 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:
Accepted in New York, New York, as of the date set forth on the
first page of the Distribution Agreement:
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 __
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 I]
[ % 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 May 15, 1995, as supplemented to the
date hereof, between the Company and The Chase Manhattan Bank,
N.A., 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 initial
offering price of up to $ are to 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. $1,000 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. $1,000 (rounded down to an integral multiple
of 1,000 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 third Business
Day (as defined below) after the date of acceptance unless
otherwise agreed by the purchaser and the Company and the
Settlement Date shall be specified upon acceptance of such
offer. The term "Business Day" means a Monday, Tuesday,
Wednesday, Thursday or Friday on which commercial banks in 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 or repayable 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 or repayable 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 $200,000,000 in aggregate principal amount, one
replacement Global Note will be authenticated and issued to
represent each $200,000,000 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
$200,000,000. If one or more Book-Entry Notes having an
aggregate principal amount in excess of $200,000,000 would, but
for the preceding sentence, be represented by a single Global
Note, then one Global Note will be issued to represent each
$200,000,000 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 or
repayment 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 Business Day following the date of
acceptance.
B 2:00 p.m. on the 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.
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-ntry 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.
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,
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.
Exhibit 4(d)
[date]
Sears Roebuck Acceptance Corp.
3711 Kennett Pike
Greenville, Delaware 19807
Gentlemen:
This is to confirm our agreement ("Extension Agreement") that the term "Debt
Securities" as defined in the Fixed Charge Coverage and Ownership Agreement
dated as of May 15, 1995 between Sears Roebuck Acceptance Corp. ("SRAC"),
and Sears, Roebuck and Co. shall be expanded to include up to $2 billion
aggregate initial offering price of debt securities to be issued by SRAC
under Registration Statement No. 33-64215.
If the foregoing satisfactorily sets forth your understanding of our
agreement, please indicate your acceptance by the signature of a duly
authorized officer in the space provided below and on the duplicate
original of this letter which is enclosed.
Very truly yours,
SEARS, ROEBUCK AND CO.
By:
Alice M. Peterson
Vice President and Treasurer
Accepted:
SEARS ROEBUCK ACCEPTANCE CORP.
By:
Keith E. Trost
President
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
February 27, 1996 Exhibit 5
Sears Roebuck Acceptance Corp.
3711 Kennett Pike
Greenville, Delaware 19807
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-3,
Registration No. 33-64215 and Amendment No. 1 thereto to be
filed with the Securities and Exchange Commission on or about
February 27, 1996 (the "Registration Statement") by Sears
Roebuck Acceptance Corp. (the "Company") and Sears, Roebuck
and Co. in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of
$2,000,000,000 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 indenture dated as of May 15, 1995
between the Company and The Chase Manhattan Bank, N.A. and the
form of 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.
Sincerely,
/s/ Barbara E. Rohde
Barbara E. Rohde
Counsel
Exhibit 15(a)
Sears Roebuck Acceptance Corp.
Greenville, Delaware
We have made a review, in accordance with standards
established by the American Institute of Certified Public
Accountants, of the unaudited interim financial information of
Sears Roebuck Acceptance Corp. for the periods ended March 31,
1995 and 1994, June 30, 1995 and 1994, and September 30, 1995
and 1994, as indicated in our reports dated April 12, 1995,
July 13, 1995, and October 12, 1995, respectively; because we
did not perform an audit, we expressed no opinion on that
information.
We are aware that our reports referred to above, which were
included in your Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1995, June 30, 1995, and September
30, 1995, are incorporated by reference in Registration
Statement No. 33-64215 on Form S-3.
We are also aware that the aforementioned report, pursuant to
Rule 436(ac) under the Securities Act, is not considered a
part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 27, 1996
Exhibit 15(b)
February 27, 1996
Sears, Roebuck and Co.
Hoffman Estates, Illinois
We have made a review, in accordance with standards
established by the American Institute of Certified Public
Accountants, of the unaudited interim financial information of
Sears, Roebuck and Co. (the "Company") for the periods ended
April 1, 1995 and April 2, 1994, July 1, 1995 and July 2,
1994, and September 30, 1995 and October 1, 1994, as indicated
in our reports dated May 15, 1995, August 14, 1995, and
November 9, 1995, respectively; because we did not perform an
audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were
included in your Quarterly Reports on Form 10-Q for the
quarters ended April 1, 1995, July 1, 1995, and September 30,
1995, are being used in this Amendment No. 1 to Registration
Statement No. 33-64215 on Form S-3 filed by the Company and
Sears Roebuck Acceptance Corp.
We are also aware that the aforementioned reports, pursuant to
Rule 436(c) under the Securities Act of 1933, are not
considered a part of the Registration Statement prepared or
certified by an accountant or a report prepared or certified
by an accountant within the meaning of Sections 7 and 11 of
that Act.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Chicago, Illinois
Exhibit 23(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Amendment
No. 1 to Registration Statement No. 33-64215 of Sears Roebuck
Acceptance Corp. (the "Company") on Form S-3 of our report
dated January 26, 1995, appearing in (and incorporated by
reference in) the Annual Report on Form 10-K of Sears Roebuck
Acceptance Corp. for the year ended December 31, 1994, and
to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement. We
also consent to the use in this Registration Statement of our
report dated January 26, 1995 on the Company's Summary
Financial Information included as Exhibit 99 to this
Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 27, 1996
Exhibit 23(b)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Amendment
No. 1 to Registration Statement No. 33-64215 of Sears, Roebuck
and Co. (the "Company") and Sears Roebuck Acceptance Corp. on
Form S-3 of our report dated February 24, 1995 (May 10, 1995
as to Note 4), related to the consolidated financial
statements of the Company appearing in the Current Report on
Form 8-K of the Company dated May 15, 1995. We also consent
to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Chicago, Illinois
February 27, 1996
Securities Act of 1933 File
No. _______
(If application to determine
eligibility of trustee for
delayed offering pursuant to
Section 305(b)(2))
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2) _____________
THE CHASE MANHATTAN BANK
(National Association)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 Chase Manhattan Plaza, New York, New York
(Address of principal executive offices)
10081
(Zip Code)
SEARS ROEBUCK ACCEPTANCE CORP.
(Exact name of obligor as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
51-0080535
(I.R.S. Employer Identification No.)
3711 Kennett Pike
Greenville, Delaware
(Address of principal executive offices)
19807
(Zip Code)
Debt Securities
(Title of the indenture securities)
<PAGE>
Item 1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is
subject.
Comptroller of the Currency, Washington,
D.C.
Board of Governors of The Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee,
directly or indirectly controlling, controlled
by, or under common control with the obligor.
(See Note on Page 2.)
Item 16. List of Exhibits.
List below all exhibits filed as a part of this
statement of eligibility.
*1.-- A copy of the articles of association of
the trustee as now in effect. (See
Exhibit T-1 (Item 12), Registration
No. 33-55626.)
*2.-- Copies of the respective authorizations
of The Chase Manhattan Bank (National
Association) and The Chase Bank of
New York (National Association) to
commence business and a copy of
approval of merger of said corporations,
all of which documents are still in
effect. (See Exhibit T-1 (Item 12),
Registration No. 2-67437.)
*3.-- Copies of authorizations of The Chase
Manhattan Bank (National Association)
to exercise corporate trust powers, both
of which documents are still in effect.
(See Exhibit T-1 (Item 12), Registration
No. 2-67437.)
*4.-- A copy of the existing by-laws of the
trustee. (See Exhibit T-1 (Item 16)
(25.1), Registration No. 33-60809.)
*5.-- A copy of each indenture referred to in
Item 4, if the obligor is in default.
(Not applicable)
*6.-- The consents of United States institutional
trustees required by Section 321(b) of the
Act. (See Exhibit T-1, (Item 12),
Registration No. 22-19019.)
7.-- A copy of the latest report of condition of
the trustee published pursuant to law or
the requirements of its supervising or
examining authority.
______
*The Exhibits thus designated are incorporated herein by
reference. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been
no amendments or changes.
1.
<PAGE>
NOTE
Inasmuch as this Form T-1 is filed prior to the
ascertainment by the trustee of all facts on which to have a
responsive answer to Item 2 the answer to said Item is based
on incomplete information.
Item 2 may, however, be considered as correct unless
amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act
of 1939, the trustee, The Chase Manhattan Bank (National
Association), a corporation organized and existing under the
laws of the United States of America, has duly caused this
statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New
York, and the State of New York, on the 26th day of February,
1996.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
/s/ Timothy E. Burke
By: Timothy E. Burke, Second
Vice President
2.
<PAGE>
Exhibit 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
The Chase Manhattan Bank, N.A.
of New York in the State of New York, at the close of business
on September 30, 1995, published in response to call made by
Comptroller of the Currency, under title 12, United States
Code, Section 161.
Charter Number 2370 Comptroller of the Currency
Northeastern District
Statement of Resources and Liabilities
ASSETS Thousands
of Dollars
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin $ 5,081,000
Interest-bearing balances 5,957,000
Held to maturity securities 1,678,000
Available-for-sale securities 5,303,000
Federal funds sold and securities
purchased under agreements to resell
in domestic offices of the bank and
of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold 1,806,000
Securities purchased under
agreements to resell 23,000
Loans and lease financing receivable:
Loans and leases, net of
unearned income $55,682,000
LESS: Allowance for
loan and lease losses 1,112,000
LESS: Allocated transfer
risk reserve 0
Loans and leases, net of unearned
income, allowance, and reserve 54,570,000
Assets held in trading accounts 12,551,000
Premises and fixed assets (including
capitalized leases) 1,755,000
Other real estate owned 400,000
Investments in unconsolidated subsidiaries
and associates companies 30,000
Customers' liability to this bank on
acceptances outstanding 1,091,000
Intangible assets 1,344,000
Other assets 6,322,000
TOTAL ASSETS $97,911,000
LIABILITIES
Deposits:
In domestic offices $31,007,000
Noninterest-bearing $12,166,000
Interest-bearing 18,841,000
In foreign offices, Edge and
Agreement subsidiaries, and IBFs 36,015,000
Noninterest-bearing 3,258,000
Interest-bearing 32,757,000
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased 1,673,000
Securities sold under agreements
to repurchase 233,000
Demand notes issued to the U.S. Treasury 25,000
Trading liabilities 9,105,000
Other borrowed money:
With original maturity of one year
or less 2,783,000
With original maturity of more than
one year 395,000
Mortgage indebtedness and obligations
under capitalized leases 40,000
Bank's liability on acceptances executed
and outstanding 1,100,000
Subordinated notes and debentures 1,960,000
Other liabilities 5,747,000
TOTAL LIABILITIES 90,083,000
Limited-lief preferred stock and
related surplus 0
EQUITY CAPITAL
Perpetual preferred stock and related
surplus 0
Common stock 921,000
Surplus 5,244,000
Undivided profits and capital reserves 1,695,000
Net unrealized holding gains (losses)
on available-for-sale securities (43,000)
Cumulative foreing currency translation
adjustments 11,000
TOTAL EQUITY CAPITAL 7,828,000
TOTAL LIABLITIES, LIMITED-LIFE PREFERRED
STOCK AND EQUITY CAPITAL $97,911,000
I, Lester J. Stephens, Jr., Senior Vice President and
Controller of the above named bank do hereby declare that this
Report of Condition is tru and correct to the best of my
knowledge and belief. (Signed) Lester J. Stephens, Jr.
We the undersigned directors, attest to the correctness of
this statement of resources and liabilities. We declare that
it has been examined by us, and to the best of our knowledge
and belief has been prepared in conformance with the
instructions and is true and correct.
(Signed) Thomas G. Labrecque
(Signed) Donald Trautlein Directors
(Signed) Richard J. Boyle
Exhibit 99
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholder and Board of Directors
of Sears Roebuck Acceptance Corp.:
We have audited the statement of financial position if Sears
Roebuck Acceptance Corp. (a wholly-owned subsidiary of Sears,
Roebuck and Co.) as of December 31, 1994 and 1993, and the
related statements of income, stockholder's equity, and cash
flows for each of the three years in the period ended December
31, 1994 and have issued our report thereon dated January 26,
1995. Such financial statements and our report thereon are
incorporated by reference in the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 and in this
Prospectus.
We have also previously audited, in accordance with generally
accepted auditing standards, the statements of financial
position as of December 31, 1992, 1991, and 1990, and the
related statements of income, stockholder's equity, and cash
flows for the years ended December 31, 1991 and 1990 (none of
which are presented herein); and we expressed unqualified
opinions on those financial statements. In our opinion, the
information set forth in the Summary Financial Information for
each of the five years in the period ended December 31, 1994,
appearing on page 5 of this Prospectus, is fairly stated, in
all material respects in relation to the financial statements
from which it has been derived.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Philadelphia, Pennsylvania
January 26, 1995
