Document:

exv10w40

 

Exhibit 10.40

Terms Sheet

For

Revision of Program Agreement

Between

Sears, Roebuck and Co. and Citibank USA, N.A.

This terms sheet (the “Terms Sheet”) describing the revisions to be made to the Amended and
Restated Program Agreement dated as of July 15, 2003, as amended and restated on November 3, 2003
by and between Sears, Roebuck and Co., Sears Intellectual Property Management Company (hereinafter
“Sears”), and Citibank USA, N.A. (“Citibank”), and formalizing the terms in the letter dated
November 16, 2004 from Glenn Richter of Sears to Steve Freiberg of CitiCards, is made as of April
29, 2005 and will remain in effect, unless earlier terminated, for the duration of the Program
Agreement. The parties contemplate formally revising the Program Agreement through an amendment
and restatement that will reflect the changes required by this Terms Sheet, and agree to diligently
work toward that end as soon as reasonably feasible after execution of this Terms Sheet.

		
	1. 	Definitive Agreement.

      Upon execution of this Terms Sheet, the parties agree to promptly draft and enter into an
amended and restated Program Agreement which will reflect the terms of this Terms Sheet. The
parties agree to negotiate in good faith any additional terms and conditions to be included in the
new amended and restated program agreement to reflect any needed changes to the Program Agreement,
as revised, to include: (i) Sears Holdings Corporation as a party thereto; (ii) any modifications
that the parties mutually agree are required to effect the intent of this Terms Sheet; and (iii) to
establish mutually agreed upon Service Goals relating to the matters covered by this Terms Sheet.
Except for those changes, the parties intend that no further changes should be made to the Program
Agreement.

		
	2. 	Definitions.

      To the extent that capitalized terms are used, they shall have the same meaning as in the
Program Agreement. Any reference to a brand includes any successor or replacement brand. The
following terms have the meaning ascribed to them below:

      Home Category: The Home Category includes: Home office; home appliances; home
electronics; floorcare and sewing; tools/paint; lawn/home improvement/fitness; and mattresses. A
Sears Store need not have all of these departments to be considered to have a Home Category, but
must have at least one.

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      Store Formats:

      Sears Store: For purposes of this Terms Sheet, a Sears Store shall include a Home
Category. A Sears Store shall also include any store format already branded Sears or The Great
Indoors, or Orchard Supply Hardware Corporation as of the date of this Terms Sheet, (including but
not limited to Sears Grand, Sears Essentials, Sears Hardware, Sears Dealer Store and all Full Line
Sears Stores) as well as any future The Great Indoors, Orchard Supply Hardware Corporation, Sears
Full Line Store, Sears Essentials Format Store, Sears Grand, Sears Hardware or Sears Dealer Stores.

      Sears Full Line Store: A store that is branded solely as Sears or Sears, Roebuck and
Co. on the exterior, carries an assortment of Home Category departments, and is not a Sears Dealer
Store or Sears Outlet Store. A listing of the Sears Full Line Stores as of April 30, 2005, shall be
made a part of the revised Program Agreement. In addition, in order for any new stores to be
classified as a Sears Full Line Store, the store must be substantially similar to the Sears Full
Line Stores existing at the time of execution of this Terms Sheet.

      Sears Essentials Format Store: A store meeting the definition of a Sears Essentials
Format Store will be considered a Sears Store for purposes of Exhibit A of this Terms Sheet. A
Sears Essentials Format Store will always have a Home Category, and may also include a pharmacy.
Sales in the Home Category will comprise no less than 44% of the total balance of sales (not
including sales from pharmacy or gift card redemptions) of the store.

      The balance of sales at the Sears Essentials Format Stores will be monitored by measuring the
balance of sales figures in the aggregate twice a year for all Sears Essentials Format Stores based
on sales (less sales from pharmacy and gift card redemptions) from January 1 through June 30, and
then again from July 1 through December 31 (each an Evaluation Period). Only those Sears
Essentials Format Stores that have been open at least 12 months from their respective grand opening
dates (to allow that store to fully develop its Home Category sales division) will be included in
the balance of sales calculation, and no such calculation will take place until there are 20 Sears
Essentials Format Stores open at least one year from their grand opening date. Thus, it is
possible that some Sears Essential Stores will not be included in the calculation of balance of
sales for the full 6 month period because they will not have been open for one year past the grand
opening until sometime after January 1 or July 1, or because there are not 20 stores that meet the
criteria. They will be included for each calendar month that they meet the above criteria.

      Kmart Store: A Kmart store is one that has Kmart, Super K Mart or Big K branded on its
exterior. A Kmart store may also have a Sears Inside located within its store.

      Sears Inside: A Sears Inside store location is one where the exterior of the store is
not primarily branded as Sears, (but could be branded with another Sears Holdings Corporation
subsidiary name) and contains either a) a home appliances section offering home appliances such as
but not limited to refrigerators or washers and dryers or b) two other Sears Home Category
assortments.

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      Accounts:

      A Sears Branded Account is any Account that may be issued pursuant to the terms of the Program
Agreement as revised, other than a Kmart Account.

      A Kmart Account is an Account issued pursuant to the Program Agreement that carries the Kmart
(or any derivative thereof such as but not limited to Big K or Super K Mart) brand name.

      Internal Sales:

      An internal sale is one where Merchandise is charged to an Account.

		
	3. 	Terms Sheet Binding; Assignment.

      This Terms Sheet shall be binding upon and inure to the benefit of the parties and their
successors and assigns.

		
	4. 	Governing Law.

      The rights and duties of the parties will be governed by the local law of the State of
Delaware without regard to principles of choice or conflict of law.

		
	5. 	Notices.

      All notices required or permitted to be given under this Terms Sheet or any amended and
restated Program Agreement shall be sufficient if sent by either certified mail, return receipt
requested, facsimile or hand delivery to the parties at the respective addresses set forth in the
Program Agreement or to such other address as the party receiving the notice has designated by
notice to the other party.

		
	6. 	Entire Agreement.

      This Terms Sheet, including all exhibits hereto, constitute the complete, final and exclusive
statement of the terms of the Terms Sheet among the parties pertaining to the subject matter hereof
and supersede all prior letters of intent, understandings, negotiations and discussions of the
parties. No modification or rescission of this Terms Sheet shall be binding unless executed in
writing by the party to be bound thereby.

		
	7. 	Counterparts; Effectiveness.

      This Terms Sheet may be executed by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all such counterparts shall together
constitute but one and the same contract.

SIGNATURES FOLLOW ON THE NEXT PAGE

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IN WITNESS WHEREOF, Citibank and Sears have caused this Terms Sheet to be executed by persons duly
authorized as of the date of first above stated.

	 	 	 	 	 
	Sears, Roebuck and Co. 

 	 	 
	By:  	/s/ Alan J. Lacy
 
	Name:  	Alan J. Lacy 
	Title:  	CEO 
	 

	 	 	 	 	 
	Citibank USA, N.A. 

 	 	 
	By:  	/s/ Douglas C. Morrison
 	 
	Name:  	Douglas C. Morrison 	 
	Title:  	VP & CFO 	 	 
	 

	 	 	 	 	 
	Sears Intellectual Property Management Company

 	 	 
	By:  	/s/ Andrea Cannon
 	 
	Name:  	Andrea Cannon 	 	 
	Title:  	Secretary 	 	 
	 

 4exv4w2

 

Exhibit 4.2

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON
OTHER THAN THE DEPOSITORY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED
UPON REGISTRATION OF TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (“DTC”), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

CAMDEN PROPERTY TRUST

FORM OF

5% NOTE DUE 2015

	 	 	 
	REGISTERED

	 	PRINCIPAL AMOUNT
	No.: R-1

	 	$250,000,000

CUSIP No.: 133131 AP 7

     CAMDEN PROPERTY TRUST, a real estate investment trust organized and existing under the laws of
the State of Texas (hereinafter called the “Company,” which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE &
Co., or registered assigns, upon presentation, the principal sum of Two Hundred and Fifty Million
Dollars ($250,000,000) on June 15, 2015 at the office or agency of the Company referred to below,
and to pay interest thereon from June 7, 2005, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on June 15 and December
15 in each year (each, an “Interest Payment Date”), commencing December 15, 2005 at the rate of 5%
per annum, until the entire principal hereof is paid or duly provided for. The interest so
payable, and punctually paid or duly provided for on any Interest Payment Date will, as provided
for in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date for such interest
which shall be June 1 or December 1 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may
either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this
series not more than 15 days and not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.

 

 

     Payment of the principal of, or Make-Whole Amount, if any, and interest on, the Securities
will be made to The Depository Trust Company or its nominee in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest may be made by (i)
check mailed to the address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer of funds to an account of the Person entitled thereto
maintained within the United States.

     Securities of this series may be redeemed at any time at the option of the Company, in whole
or in part, upon notice of not more than 60 nor less than 30 days prior to the Redemption Date, at
a redemption price equal to the sum of (i) the principal amount of the Securities being redeemed
plus accrued interest thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE
HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN
THIS PLACE.

     Unless the Certificate of Authentication hereon has been executed by or on behalf of the
Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

	 	 	 	 	 
	 	CAMDEN PROPERTY TRUST

 	 
	Dated: June 7, 2005 	By:  	 	 
	 	 	D. Keith Oden 	 
	 	 	President and Chief Operating Officer 	 
	 

Attest:

	 	 	 	 	 
	By:
	 	 	 	 
	

	 	 	 	 
	

	 	Terry S. McKinney	 	 
	

	 	Assistant Secretary
	 	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION:

     This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.

SunTrust Bank,

as Trustee

	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	Dated: June 7, 2005
	

	 	 	 	 	 	 
	

	 	Authorized Officer	 	 	 	 

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Reverse of Note

CAMDEN PROPERTY TRUST

5% NOTE DUE 2015

     This Security is one of a duly authorized issue of securities of the Company (herein called
the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of
February 11, 2003, (herein called the “Indenture”), between the Company and SunTrust Bank, a
banking corporation organized and existing under the laws of the State of Georgia, as Trustee
(herein called the “Trustee,” which term includes any successor trustee under the Indenture with
respect to the series of which this Security is a part), to which Indenture and all board
resolutions and indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are
to be, authenticated and delivered. This Security is one of the series designated on the first
page hereof.

     “Make-Whole Amount” means, in connection with any optional redemption or accelerated payment
of any Security, the excess, if any, of (i) the aggregate present value as of the date of such
redemption or accelerated payment of each dollar of principal being redeemed or paid and the amount
of interest (exclusive of interest accrued to the date of redemption or accelerated payment) that
would have been payable in respect of such dollar if such redemption or accelerated payment had not
been made, determined by discounting, on a semi-annual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective dates on which such
principal and interest would have been payable if such redemption or accelerated payment had not
been made, over (ii) the aggregate principal amount of the Securities being redeemed or paid.

     “Reinvestment Rate” means 0.20% (twenty one-hundredths of one percent) plus the arithmetic
mean of the yields under the respective headings “This Week” and “Last Week” published in the
Statistical Release under the caption “Treasury Constant Maturities” for the maturity (rounded to
the nearest month) corresponding to the remaining life to maturity, as of the payment date of the
principal being redeemed or paid. If no maturity exactly corresponds to such maturity, yields for
the two published maturities most closely corresponding to such maturity shall be calculated
pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods
to the nearest month. For purposes of calculating the Reinvestment Rate, the most recent
Statistical Release published prior to the date of determination of the Make-Whole Amount shall be
used.

     “Statistical Release” means the statistical release designated “H.15(519)” or any successor
publication which is published weekly by the Federal Reserve System and which establishes yields on
actively traded United States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination under the Indenture, then
such other reasonably comparable index which shall be designated by the Company.

     The covenants set forth in Section 10.12 of the Indenture shall be fully applicable to this
Security.

     The Indenture contains provisions for defeasance at any time of (a) the entire indebtedness of
the Company on this Security and (b) certain restrictive covenants and the related defaults and
Events of Default applicable to the Company, in each case, upon compliance by the Company with
certain conditions set forth in the Indenture, which provisions apply to this Security.

     If any Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of, and the Make-Whole Amount, if any, on, the Securities of this series
may be declared due and payable in the manner and with the effect provided in the Indenture.

     As provided in and subject to the provisions of the Indenture, the Holder of this Security
shall not have the right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a

3

 

continuing Event of Default with respect to the Securities of this series, the Holders of not
less than 25% in principal amount of the Securities of this series at the time Outstanding shall
have made written request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee, offered the Trustee reasonable indemnity, and the Trustee shall not have
received from the Holders of a majority in principal amount of Securities of this series at the
time Outstanding a direction inconsistent with such request, and the Trustee shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for
the enforcement of any payment of principal hereof (and premium or Make-Whole Amount, if any) or
any interest on and any Additional Amounts in respect thereof on or after the respective due dates
expressed herein.

     The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any time by the Company and the
Trustee with the consent of the Holders of not less than a majority in principal amount of the
Securities of each series at the time Outstanding affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

     No reference herein to the Indenture and no provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay
the principal of, Make-Whole Amount, if any, on, and interest on this Security at the times, place
and rate, and in the coin or currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Security is registrable in the Security Register, upon surrender of this Security
for registration of transfer at the office or agency of the Company in any Place of Payment where
the principal of, Make-Whole Amount, if any, on, and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company
and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated transferee or
transferees.

     The Securities of this series are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series of a different authorized
denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.

     Prior to due presentment of this 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 this
Security is registered as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.

     No recourse under or upon any obligation, covenant or agreement contained in the Indenture or
in this Security, or because of any indebtedness evidenced thereby, shall be had against any
promoter, as such or, against any past, present or future shareholder, officer, trust manager or
director, as such, of the Company or of any successor, either directly or through the Company or
any successor, under any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of this Security by the Holder thereof and as part
of the consideration for the issue of the Securities of this series.

     All terms used in this Security which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

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     THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

     Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused “CUSIP” numbers to be printed on the Securities of this series
as convenience to the Holders of such Securities. No representation is made as to the correctness
or accuracy of such CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

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ABBREVIATIONS

     The following abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to applicable laws or
regulations:

	 	 	 	 	 	 	 	 	 
	TEN COMM

	 	—
	 	as tenants in common
	 	UNIF GIFT/TRANSFER MIN ACT —	 	 
	TEN ENT

	 	—
	 	as tenants by the entireties
	 	_________Custodian _________	 	 
	JT TEN

	 	—
	 	as joint tenants with right
of survivorship and not as
tenants in common
	 	      (Cust)
                          (Minor)

Under Uniform Gifts/Transfers to Minors Act 
______
	 	 
	

	 	 	 	 	 	(State)	 	 

Additional abbreviations may also be used though not in the above list.

Social Security or taxpayer I.D. or other identifying number of assignee:

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(name and address of assignee)

the within Note and all rights thereunder, hereby irrevocably constituting and appointing
_______________________________________
_____________________________, attorney to transfer said Note on
the books kept for registration thereof, with full power of substitution in the premises.

Dated:

6

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