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EXHIBIT 1.1
SEARS CREDIT ACCOUNT MASTER TRUST II
Master Trust Certificates
Underwriting Agreement
November 15, 1999
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several Underwriters
Ladies and Gentlemen:
SRFG, Inc. (formerly known as Sears Receivables Financing Group,
Inc.) (the "Company"), as originator of Sears Credit Account Master Trust II
(the "Trust") and holder of the Seller Certificate, proposes, subject to the
terms and conditions stated herein, to cause to be issued and sold from time to
time certain of the Master Trust Certificates 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 attached 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 1 to the applicable
Pricing Agreement (such firms constituting the "Underwriters" with respect to
such Pricing Agreement and the securities specified therein) the Securities
specified in such Pricing Agreement (with respect to such Pricing Agreement, the
"Designated Securities"). The Designated Securities will be issued by the Trust
pursuant to a Pooling and Servicing Agreement, dated as of July 31, 1994, as
amended (the "Pooling and Servicing Agreement"), as supplemented by a Series
Supplement (the "Series Supplement") relating to the specific series of
Certificates issued thereunder, by and among the Company as Seller, Sears,
Xxxxxxx and Co. ("Sears") as Servicer and Bank One, National Association
(formerly known as The First National Bank of Chicago) as Trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Pooling and Servicing Agreement or the Series
Supplement, as the case may be.
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 or cause to be sold any of the Securities or
as an obligation of any of the Underwriters to purchase the Securities. The
obligation of the Company to cause to be issued and sold 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 initial
principal amount of such Designated Securities, the public offering price of
such Designated Securities or the method by which the price at which such
Securities will be sold will be determined, the purchase price to the
Underwriters of such Designated Securities, the names of the Underwriters of
such Designated Securities and the principal amount of such
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Designated Securities to be purchased by each Underwriter 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 Pooling and Servicing Agreement, the Series Supplement relating to the
Designated Securities, and the registration statement and prospectus with
respect thereto, the principal terms of such Designated Securities. A Pricing
Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement in respect of the Securities has
been filed with the Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to you, 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, 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
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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;
(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 rules and regulations of the Commission
thereunder and did not, and will not, as of the applicable effective date as to
the Registration Statement and as of the applicable filing date as to the
Prospectus, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter of Designated Securities through you expressly for use in the
Prospectus as amended or supplemented relating to such Securities.
(d) Upon payment therefor as provided herein and in the Pricing
Agreement relating to Designated Securities, such Designated 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 entitled to the
benefits of the Pooling and Servicing Agreement and the Series Supplement.
(e) The issue and sale of the Designated Securities pursuant to
any Pricing Agreement and the compliance by the Company with all of the
provisions of the Designated Securities, the Pooling and Servicing Agreement,
the Series Supplement, the First Amended and Restated Purchase Agreement dated
as of July 31, 1994, as amended (the "Purchase Agreement"), by and between the
Company and Sears, the First Amended and Restated Contribution Agreement dated
as of July 31, 1994 (the "Contribution Agreement"), by and between the Company
and Sears, the Receivables Warehouse Agreement dated as of
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December 21, 1995 (the "Receivables Warehouse Agreement"), by and between the
Company and Sears, this Agreement, the Assignment of Additional Funds, dated as
of January 30, 1998, between the Company and the Trustee (the "Assignment of
Additional Funds") and such Pricing Agreement will not (i) conflict with or
result in any breach which would constitute a material default under, or, except
as contemplated by the Pooling and Servicing Agreement or the Series Supplement,
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 may be bound or
to which any of the property or assets of the Company, material to the Company,
is subject, (ii) result in any violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or, (iii) to the best of the Company's
knowledge, 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.
(f) No consent, approval, authorization or other order of, or
filing with, any court or any Federal, State or other regulatory authority or
other governmental body having jurisdiction over the Company is required for the
issue and sale of the Securities except as may be required under the Act, the
Exchange Act, and securities laws of the various states and other jurisdictions
which are applicable to the issue and sale of the Designated Securities and
except for the filing of any financing or continuation statement required to
perfect or continue the Trust's and the Company's respective interests in the
Receivables.
(g) The compliance by Sears with all of the provisions of the
Pooling and Servicing Agreement, the Series Supplement, the Assignment of
Accounts and Sale of Receivables Agreement, dated as of September 15, 1994, as
amended between Sears National Bank (the "Bank") and Sears (the "Bank Assignment
Agreement"), the Purchase Agreement, the Contribution Agreement, the Receivables
Warehouse Agreement and this Agreement will not (i) conflict with or result in
any breach which would constitute a material default under, or, except as
contemplated by the Pooling and Servicing Agreement, the Series Supplement, the
Bank Assignment Agreement, the Purchase Agreement and the Contribution
Agreement, result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of Sears or any subsidiary
thereof, material to Sears and its subsidiaries (whether or not consolidated)
considered as a whole, pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money to which Sears and the
Company, Sears Xxxxxxx Acceptance Corp., Sears DC Corp. or Sears National Bank
(collectively, the "Designated Subsidiaries") is a party or by which Sears or
any Designated Subsidiary may be bound or to which any of the property or assets
of Sears or any Designated Subsidiary, material to Sears and its subsidiaries
(whether or not consolidated) considered as a whole, is subject, (ii) result in
any violation of the provisions of the Restated Certificate of Incorporation, as
amended, or the By-Laws of Sears or, (iii) to the best of the Company's
knowledge, result in any material violation of any statute or any order, rule or
regulation applicable to Sears of any court or any Federal, State or other
regulatory authority or other governmental body having jurisdiction over Sears;
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(h) The Principal Receivables conveyed by the Company to the
Trust under the Pooling and Servicing Agreement had an aggregate outstanding
balance determined as of the date set forth in the Pricing Agreement of not less
than the amount set forth in the Pricing Agreement; and
(i) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the Trust is not required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").
3. Subject to the terms and conditions herein set forth, the Company
agrees to cause to be issued and sold to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to purchase from the
Company, at the purchase price specified in the Pricing Agreement applicable to
any Designated Securities, the principal amount of Designated Securities set
forth in such Pricing Agreement.
4. (a) Upon the execution of the Pricing Agreement applicable to any
Designated Securities and the authorization by you of the release of the
Designated Securities, the several Underwriters propose to offer the Designated
Securities for sale upon the terms and conditions set forth in the Prospectus as
amended or supplemented.
(b) Each Underwriter represents and agrees that it will not offer
or sell or deliver any of the Securities in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof.
(c) Each Underwriter represents and agrees that it will not, at
any time that such Underwriter is acting as an "underwriter" (as defined in
Section 2(11) of the Act) with respect to any Designated Securities, transfer,
deposit or otherwise convey any such Designated Securities into a trust or other
type of special purpose vehicle that issues securities or other instruments
backed in whole or in part by, or that represents interests in, such Designated
Securities without the prior written consent of the Company.
5. Unless otherwise specified in the Pricing Agreement, Designated
Securities to be purchased by each Underwriter pursuant to the Pricing Agreement
relating thereto 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 thereof by wire transfer to such account as the
Company may designate of federal or other immediately available funds. The
place, time and date of such delivery shall be set forth in the Pricing
Agreement or at such other place, time and date as you and the Company may agree
upon in writing, such time and date being herein called the "Time of Delivery."
Unless otherwise specified in the Pricing Agreement, the Securities shall be
represented by definitive certificates registered in the name of Cede & Co., as
nominee for The Depository Trust Company. Such definitive certificates will be
made available for inspection at least twenty-four hours prior to the Time of
Delivery at the office of Bank One, National Association, Xxx Xxxxx Xxxxx
Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000.
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6. The Company agrees with each of the Underwriters of Designated
Securities:
(a) Immediately following the execution of each Pricing
Agreement, the Company will prepare a Prospectus Supplement setting forth the
amount of Securities covered thereby and the terms thereof not otherwise
specified in the Prospectus, the price at which such Securities are to be
purchased by the Underwriters from the Company, either the initial public
offering price or the method by which the price at which such Securities are to
be sold will be determined, the selling concessions and allowances, if any, and
such other information as the Company deems appropriate in connection with the
offering of such Securities, and after the date of the Pricing Agreement
relating to such Securities and prior to the Time of Delivery for such
Securities the Company will not make any further amendment or any supplement to
the Registration Statement or Prospectus as amended or supplemented 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 to furnish you with
copies thereof for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Securities; and during such same
period to advise you, promptly after it receives notice thereof, of the time
when the Registration Statement, or any amendment thereto, or any amended
Registration Statement has become effective or any supplement to the Prospectus
or any amended Prospectus has been filed, of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of any
Prospectus, or the suspension of the qualification of such Securities for
offering or sale in any jurisdiction, or the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or for
additional information; and in the event of the issuance of any such stop order
or of any such order preventing or suspending the use of any such Prospectus or
suspending any such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
such Securities, provided, that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as you may from time to time
reasonably request and if at any time the delivery of a prospectus is required
by law 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
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 in order
to comply with the Act, to notify you and to prepare and
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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 in case any Underwriter is required to
deliver a prospectus in connection with sales of any Securities at any time nine
months or more after the effective date of the Registration Statement, upon your
request but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To cause the Trust to make generally available to holders of
the Securities, in accordance with Rule 158 under the Act or otherwise, as soon
as practicable, but in any event not later than forty-five days after the end of
the fourth full fiscal quarter (ninety days in the case of the last fiscal
quarter in any fiscal year) following the fiscal quarter ending after the
effective date of the Registration Statement, an earning statement of the Trust
(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 effective
date of such Registration Statement;
(e) To pay or cause to be paid all expenses incident to the
performance of its obligations hereunder, 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 and any blue sky and legal investment memoranda.
The Company and Sears agree with each of the Underwriters during the
period beginning from the date of the Pricing Agreement and continuing to and
including the earlier of (i) the termination of trading restrictions on the
Designated Securities, of which termination you agree to give the Company prompt
notice confirmed in writing, and (ii) the Time of Delivery, not to offer, sell,
contract to sell or otherwise dispose of any securities of the Company or any
other subsidiary of Sears, or any other trust for which the Company or any other
subsidiary of Sears is depositor, which represent participation interests in
receivables arising under open end credit plans offered by Sears, without your
prior written consent, which consent shall not be unreasonably withheld.
7. The obligations of the several Underwriters hereunder and under
the Pricing Agreement relating to Designated Securities shall be subject, in
their discretion, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of the Time of Delivery
for such Designated Securities, true and correct, the condition that the Company
shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement or any part thereof 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;
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(b) All corporate proceedings and related matters in connection
with the organization of the Company, the validity of the Bank Assignment
Agreement, the Purchase Agreement, the Contribution Agreement, the Receivables
Warehouse Agreement, the Assignment of Additional Funds, the Pooling and
Servicing Agreement and the Series Supplement and the registration,
authorization, issue, sale and delivery of the Designated Securities shall have
been satisfactory to counsel to the Underwriters, and such counsel shall have
been furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this
subdivision (b);
(c) Counsel to the Company shall have furnished to you such
counsel's written opinion, dated the Time of Delivery, in form and substance
satisfactory to you in your reasonable judgment, to the effect that:
(i) The Company and Sears have been duly incorporated and are
validly existing as corporations in good standing under the laws of
their respective states of incorporation;
(ii) This Agreement and the Pricing Agreement have been duly
authorized, executed and delivered on the part of the Company and
Sears;
(iii) The issue and sale of the Designated Securities and the
compliance by the Company with all of the provisions of the
Designated Securities, this Agreement, the Pricing Agreement, the
Purchase Agreement, the Contribution Agreement, the Receivables
Warehouse Agreement, the Assignment of Additional Funds, the Pooling
and Servicing Agreement and the Series Supplement will not (a)
conflict with or result in any breach which would constitute a
material default under, or, except as contemplated by the Pooling
and Servicing Agreement or the Series Supplement, 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 violation of the
provisions of the Certificate of Incorporation, as amended, or the
By-Laws of the Company, or (c) to the best 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
Investment Company Act and the rules and regulations under each such
act and other than the securities laws of the various states or
other jurisdictions which are applicable to the issue and sale of
the Securities and other than state laws pertaining to the
perfection of security interests;
(iv) To the best knowledge of such counsel, no consent,
approval, authorization or other order of, or filing with, any court
or any Federal, State or other regulatory authority or other
governmental body having jurisdiction over Sears or the Company is
required for the consummation by Sears and the Company, as
applicable,
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of the transactions contemplated by the Bank Assignment Agreement,
the Purchase Agreement, the Contribution Agreement, the Assignment
of Additional Funds and the Receivables Warehouse Agreement or for
the issue and sale of the Securities except as may be required under
the Act, the Exchange Act, the Trust Indenture Act and the
Investment Company Act and securities laws of the various states or
other jurisdictions which are applicable to the issue and sale of
the Securities and except for the filing of any financing or
continuation statement required to perfect the respective interests
of the Trust, the Company and Sears in the Receivables;
(v) The compliance by Sears with all of the provisions of
this Agreement, the Bank Assignment Agreement, the Purchase
Agreement, the Contribution Agreement, the Receivables Warehouse
Agreement, the Pooling and Servicing Agreement and the Series
Supplement will not (a) conflict with or result in any breach which
would constitute a material default under, or, except as
contemplated by the Bank Assignment Agreement, the Pooling and
Servicing Agreement, the Series Supplement, the Purchase Agreement,
the Contribution Agreement or the Receivables Warehouse Agreement
result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of Sears or any
subsidiary thereof, material to Sears and its subsidiaries (whether
or not consolidated) considered as a whole, pursuant to the terms
of, any indenture, loan agreement or other agreement or instrument
for borrowed money known to such counsel to which Sears or any
Designated Subsidiary is a party or by which Sears or any Designated
Subsidiary may be bound or to which any of the property or assets of
Sears or any Designated Subsidiary, material to Sears and its
subsidiaries (whether or not consolidated) considered as a whole, is
subject, (b) result in any violation of the provisions of the
Restated Certificate of Incorporation or the By-Laws of Sears, or
(c) to the best knowledge of such counsel, result in any material
violation of any statute or any order, rule or regulation applicable
to Sears of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over Sears,
other than the Act, the Exchange Act, the Trust Indenture Act and
the Investment Company Act and the rules and regulations under each
such act and other than the securities laws of the various states or
other jurisdictions which are applicable to the issue and sale of
the Securities and other than state laws pertaining to the
perfection of security interests;
(vi) Each of the Pooling and Servicing Agreement, the Series
Supplement, the Purchase Agreement, the Contribution Agreement and
the Receivables Warehouse Agreement has been duly authorized,
executed and delivered on the part of the Company and Sears and, as
to each of the Company and Sears, is a valid and binding instrument
enforceable in accordance with its terms except as the foregoing may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to creditors'
rights generally or general principles of equity (whether considered
in a proceeding at law or in equity) and the discretion of the court
before which any proceeding therefor may be brought; the Pooling and
Servicing Agreement is not required to be qualified under the Trust
Indenture Act; the Trust is not required to be registered under the
Investment Company Act; and the Securities have been duly authorized
and (assuming their due authentication by the Trustee) have been
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duly executed, issued and delivered and constitute valid and binding
obligations of the Trust in accordance with their terms, entitled to
the benefits of the Pooling and Servicing Agreement and the Series
Supplement, except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally or
general principles of equity (whether considered in a proceeding at
law or in equity) and the discretion of the court before which any
proceeding therefor may be brought;
(vii) The Bank Assignment Agreement has been duly authorized,
executed and delivered by Sears and, as to Sears, is a valid and
binding instrument enforceable in accordance with its terms, except
as the foregoing may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally or general principles
of equity (whether considered in a proceeding at law or in equity)
and the discretion of the court before which any proceeding therefor
may be brought;
(viii) The Assignment of Additional Funds has been duly
authorized, executed and delivered by the Company and, as to the
Company, is a valid and binding instrument enforceable in accordance
with its terms, except as the foregoing may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights generally
or general principles of equity (whether considered in a proceeding
at law or in equity) and the discretion of the court before which
any proceeding therefor may be brought;
(ix) Such counsel does not know of any pending legal or
governmental proceedings required to be described in the Prospectus
which are not described as required;
(x) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than 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;
(xi) The Registration Statement and the Prospectus as amended
or supplemented (excluding the documents incorporated by reference
therein) (other than 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; and
(xii) 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 in the Prospectus as amended or supplemented or
required to be described in the Prospectus as amended or
supplemented which has not been so filed or described.
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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 or Sears, its business groups and its subsidiaries and of public
officials as to factual matters and upon opinions of other counsel. Such counsel
shall also state that: (a) nothing has come to such counsel's attention which
has caused such counsel to believe that any of the documents referred to in
subdivision (ix) above (other than 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 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) Counsel to the Bank shall have furnished to you such
counsel's written opinion, dated the Time of Delivery, in form and substance
satisfactory to you in your reasonable judgment, to the effect that:
(i) The Bank has been duly incorporated and is validly
existing as a national banking association in good standing under
the laws of the United States of America;
(ii) The compliance by the Bank with all of the provisions of
the Bank Assignment Agreement will not (a) conflict with or result
in any breach which would constitute a material default, or except
for that created by the Bank Assignment Agreement, result in the
creation or imposition of any lien, charge or encumbrance upon any
of the property or assets of the Bank, material to the Bank,
pursuant to the terms of, any indenture, loan agreement or other
agreement or instrument for borrowed money known to such counsel to
which the Bank is a party, or by which the Bank may be bound, or to
which any of the property or assets of the Bank, material to the
Bank, is subject, (b) result in any violation of the provisions of
the Articles of Association or the By-Laws of the Bank, or (c) to
the best knowledge of such counsel, result in any material violation
of any statute or any order, rule or regulation applicable to the
Bank of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction over the
Bank;
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(iii) To the best knowledge of such counsel, no consent,
approval, authorization or other order of, or filing with, any court
or any Federal, State or other regulatory authority or other
governmental body having jurisdiction over the Bank, which has not
already been made or obtained, is required for the consummation of
the transactions contemplated by the Bank Assignment Agreement,
except for the filing of any financing or continuation statement
required to perfect the interest of Sears in the Receivables; and
(iv) The Bank Assignment Agreement has been duly authorized,
executed and delivered on the part of the Bank and, as to the Bank,
is a valid and binding instrument enforceable in accordance with its
terms, except as the foregoing may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect relating to creditors' rights generally, general
principles of equity (whether considered in a proceeding at law or
in equity), or the discretion of the court before which any
proceeding therefor may be brought.
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 or Sears, its business groups and its subsidiaries and of public
officials as to factual matters and upon opinions of other counsel.
(e) At the Time of Delivery for such Designated Securities,
Deloitte & Touche LLP shall have furnished to you a letter or letters, dated the
respective date of delivery thereof, in form and substance satisfactory to you
as to such matters as you may reasonably request;
(f) (i) Sears and its subsidiaries (whether or not consolidated)
considered as a whole, shall not have sustained, since the date of the latest
audited financial statement previously delivered to you, 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 date of the Pricing
Agreement there shall not have been any material change in the capital stock
accounts or long-term debt of Sears or any material adverse change in the
general affairs, financial position, shareholders' equity or results of
operations of Sears and its subsidiaries (whether or not consolidated)
considered as a whole, 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;
(g) Subsequent to the date of the Pricing Agreement relating to
such Designated Securities, no downgrading shall have occurred in the rating
accorded to Sears senior debt securities by Xxxxx'x Investors Service, Inc.
("Moody's") or Standard & Poor's Ratings Services ("Standard & Poor's");
provided, however, that this subdivision (g) shall not apply to any such rating
agencies which shall have notified you of the rating of the Designated
Securities prior to the execution of the Pricing Agreement;
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(h) Subsequent to the date of the Pricing Agreement relating to
such 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 or 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;
(i) At or prior to the Time of Delivery, the Certificates shall
be assigned the ratings by Moody's and Standard & Poor's set forth in the
Pricing Agreement;
(j) The Company shall have furnished or caused to be furnished to
you at the Time of Delivery for the Designated Securities certificates
satisfactory to you as to the accuracy at and as of such Time of Delivery of the
representations, warranties and agreements of the Company herein and as to the
performance by the Company of all its obligations hereunder to be performed at
or prior to such Time of Delivery and the Company shall have also furnished you
similar certificates satisfactory to you as to the matters set forth in
subdivision (a) of this Section 7; and
(k) Counsel to the Company shall have furnished to the
Underwriters a letter stating that the Underwriters may rely on the opinions of
such counsel to the Company as delivered to Moody's and Standard & Poor's in
connection with the rating of the Securities.
8. (a) The Company and Sears will jointly and severally indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, any prospectus relating to
the Securities or the Prospectus as amended or supplemented, or any amendment or
supplement thereto furnished by the Company, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or (in the case of the Registration Statement or the Prospectus
as amended or supplemented, or any amendment or supplement thereto) necessary to
make the statements therein not misleading or (in the case of any Preliminary
Prospectus) necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim; provided, however, that neither the Company nor Sears shall 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
neither the Company nor
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Sears shall 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
and Sears against any losses, claims, damages or liabilities to which the
Company or Sears 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 8 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
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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 actions in respect
thereof) relates and also the relative fault of the Company on the one hand and
the Underwriters of the Designated Securities on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering of such securities
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth on the cover page of the Prospectus as amended or
supplemented. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission of the Company on
the one hand or 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, Sears 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 in this
subdivision (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
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(e) The obligations of the Company and Sears under this Section 8
shall be in addition to any liability which the Company and Sears 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 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
and to each person, if any, who controls the Company within the meaning of the
Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Securities which it has agreed to purchase hereunder and
under the Pricing Agreement relating to such Designated 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 this Agreement with respect to such
Designated Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Designated Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subdivision (a) above, the aggregate principal
amount of such Designated 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 Securities which such Underwriter agreed to
purchase hereunder and 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 the Designated
Securities which such Underwriter agreed to purchase hereunder and under such
Pricing Agreement) of the Designated 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 Designated Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subdivision (a) above, the aggregate principal
amount of Designated 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
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purchase Designated 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 6(e) hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. 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, or the Company, or any officer or director or controlling person of
the Company, and shall survive delivery of and payment for the Securities.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company and Sears in subdivisions (a) and (e) of Section 8
hereof, the representations and warranties in subdivisions (b) and (c) of
Section 2 hereof and any representation or warranty as to the accuracy of the
Registration Statement or the Prospectus as amended or supplemented contained in
any certificate furnished by the Company pursuant to subdivision (i) of Section
7 hereof, insofar as they may constitute a basis for indemnification for
liabilities (other than payment by the Company and Sears of expenses incurred or
paid in the successful defense of any action, suit or proceeding) arising under
the Act, shall not extend to the extent of any interest therein of an
Underwriter or a controlling person of an Underwriter if a director, officer or
controlling person of the Company when the Registration Statement becomes
effective or a person who, with his consent, is named in the Registration
Statement as being about to become a director of the Company, is a controlling
person of such Underwriter, except in each case to the extent that an interest
of such character shall have been determined by a court of appropriate
jurisdiction as not against public policy as expressed in the Act. Unless in the
opinion of counsel for the Company and Sears the matter has been settled by
controlling precedent, the Company and 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.
11. If any Pricing Agreement shall be terminated pursuant to Section
9 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 6(e) and Section 8 hereof; but, if for any other
reason any Designated Securities are not delivered by or on behalf of the
Company as provided herein, the Company and Sears 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 neither the Company nor Sears shall then be under any
further liability to any Underwriter with respect to such Designated Securities
except as provided in Section 6(e) and Section 8 hereof.
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12. 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.
All statements, requests, notices and agreements hereunder shall be
in writing or by telegram or facsimile transmission if promptly confirmed in
writing and if to the Underwriters shall be sufficient in all respects, if
delivered or sent by registered mail to the representative of the Underwriters
named in the Pricing Agreement at the address named therein; and if to the
Company or Sears shall be sufficient in all respects if delivered or sent by
registered mail to the Company at 0000 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000,
Attention: President.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, Sears, the Company and, to
the extent provided in Section 8 and Section 10 hereof, the officers and
directors of the Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement or any such Pricing Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement and each Pricing
Agreement.
15. This Agreement and each Pricing Agreement shall be construed in
accordance with the laws of the State of New York. In the event of any conflict
between this Agreement and the Pricing Agreement, the Pricing Agreement shall
govern.
16. 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.
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If the foregoing is in accordance with your understanding, please
sign and return ten counterparts hereof and upon the acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Underwriters and the
Company.
Very truly yours,
SRFG, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
SEARS, XXXXXXX AND CO.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Accepted as of the date hereof:
XXXXXX XXXXXXX & CO. INCORPORATED
/s/ J. Xxxxxxx Xxx Xxxx
---------------------------------------------
Authorized Signatory
As Representative of the several Underwriters
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