SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 8, 1995
SEARS ROEBUCK ACCEPTANCE CORP.
(Exact name of registrant as specified in charter)
Delaware 1-4040 51-0080535
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
3711 Kennett Pike, Greenville, Delaware 19807
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (302) 888-3112
<PAGE>
Item 5. Other Events.
On June 8, 1995, Registrant executed an Underwriting
Agreement with Morgan, Stanley & Co. Incorporated, Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers
Inc, (the "Underwriting Agreement"), relating to debt securities.
Pursuant thereto, Registrant executed a Pricing Agreement, dated June 8,
1995, with Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers
Inc, as the several underwriters named therein, relating to $250,000,000
aggregate principal amount of Registrant's 6 1/2% Notes due June 15,
2000.
On June 15, 1995, Registrant and Sears, Roebuck and Co.
executed a Distribution Agreement with Goldman, Sachs & Co., Merrill
Lynch, Pierce Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc, as Agents (the "Distribution
Agreement"), relating to $2,000,000,000 aggregate initial offering price
of Medium-Term Notes Series I, to be sold from time to time pursuant to
the Distribution Agreement.
On September 7, 1995, Registrant executed an Underwriting
Agreement with Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, J.P. Morgan Securities Inc., Morgan, Stanley & Co.
Incorporated and Salomon Brothers Inc, (the "Underwriting Agreement"),
relating to debt securities. Pursuant thereto, Registrant executed a
Pricing Agreement, dated September 7, 1995, with Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated, J. P. Morgan
Securites Inc., Morgan Stanley & Co. Incorporated and Salomon Brothers
Inc, as the several underwriters named therein, relating to $250,000,000
aggregate principal amount of Registrant's 6 3/4% Notes due September
15, 2005.
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
1(a) Underwriting Agreement, dated June 8, 1995, among
Registrant, Morgan Stanley & Co. Incorporated, Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc.
1(b) Pricing Agreement, dated June 8, 1995, among Registrant,
Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Salomon Brothers Inc.
1(c) Distribution Agreement, dated June 15, 1995, among
Registrant, Sears, Roebuck and Co., Goldman, Sachs & Co.,
Merrill Lynch, Pierce Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated and Salomon Brothers Inc
1(d) Underwriting Agreement, dated June 8, 1995, among
Registrant, Goldman, Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, J.P. Morgan Securities, Inc.,
Morgan Stanely & Co. Incorporated and Salomon Brothers Inc
1(e) Pricing Agreement, dated June 8, 1995, among Registrant,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc
4(a) Form of 6 1/2% Note.
4(b) Form of fixed rate Medium Term Note Series I.
4(c) Form of floating rate Medium Tern Note Series I.
4(d) Form of 6 3/4% Note.
4(e) Fixed Charge Coverage and Ownership Agreement dated May 15, 1995
between Sears, Roebuck and Co. and Registrant.
5 Opinion of Robert J. Pence dated June 13, 1995, relating to
the validity of $250,000,000 aggregate principal amount of 6 1/2% Notes
due June 15, 2000, $2,000,000,000 aggregate principal amount of Medium-
Term Notes Series I and $250,000,000 aggregate principal amount of 6
3/4% Notes due September 15, 2005.
8 Opinion of Baker & McKenzie, special tax counsel to
Registrant, dated June 13, 1995.
23 Consent of Robert J. Pence (included in Exhibit 5).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SEARS ROEBUCK ACCEPTANCE CORP.
Date: October 24, 1995 By: /S/ Jerome J. Leshne
JEROME J. LESHNE
Assistant Vice President
<PAGE>
EXHIBIT INDEX
1(a) Underwriting Agreement, dated June 8, 1995, among Registrant,
Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and Salomon Brothers
Inc.
1(b) Pricing Agreement, dated June 8, 1995, among Registrant, Morgan
Stanley & Co. Incorporated, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and Salomon Brothers Inc.
1(c) Distribution Agreement, dated June 15, 1995, among Registrant,
Sears, Roebuck and Co., Goldman, Sachs & Co., Merrill Lynch,
Pierce Fenner & Smith Incorporated, Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc
1(d) Underwriting Agreement, dated September 7, 1995, among Registrant,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc
1(e) Pricing Agreement, dated September 7, 1995, among Registrant,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc.
4(a) Form of 6 1/2% Note.
4(b) Form of fixed rate Medium Term Note Series I.
4(c) Form of floating rate Medium Term Note Series I.
4(d) Form of 6 3/4% Note.
4(e) Fixed Charge Coverage and Ownership Agreement dated May 15, 1995
between Sears, Roebuck and Co. and Registrant.
5 Opinion of Robert J. Pence dated June 13, 1995, relating to the
validity of $250,000,000 aggregate principal amount of 6 1/2%
Notes due June 15, 2000, $2,000,000,000 aggregate principal amount
of Medium-Term Notes Series I and 6 3/4% Notes due September 15,
2005.
8 Opinion of Baker & McKenzie, special tax counsel to Registrant,
dated June 13, 1995.
23 Consent of Robert J. Pence (included in Exhibit 5).
UNDERWRITING AGREEMENT
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SALOMON BROTHERS INC
c/o Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
June 8, 1995
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company") proposes to issue and sell from time to time certain of its
debt securities registered under the registration statement referred to
in Section 2(a) (the "Securities"). The Company intends to enter into
one or more Pricing Agreements (each a "Pricing Agreement") in the form
of Annex I hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions stated
herein and therein, to issue and sell to the firms named in Schedule I
to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of the Securities specified in Schedule II to
such Pricing Agreement (with respect to such Pricing Agreement, the
"Designated Securities"), less the principal amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as provided in
Section 4 hereof and as may be specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, any Designated
Securities to be covered by Delayed Delivery Contracts being herein
sometimes referred to as "Contract Securities" and the Designated
Securities to be purchased by the Underwriters (after giving effect to
the deduction, if any, for Contract Securities) being herein sometimes
referred to as "Underwriters' Securities"). The Designated Securities
with respect to each Pricing Agreement shall be issued under an
indenture (the "Indenture") identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be made from
time to time to the Underwriters of such Securities, for whom you will
act as representatives. This Underwriting Agreement shall not be
construed as an obligation of the Company to sell any of the Securities
or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any
of the Securities shall be evidenced by the Pricing Agreement with
respect to the Designated Securities specified therein. Each Pricing
Agreement shall specify the aggregate principal amount of such
Designated Securities, the public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities,
the principal amount of such Designated Securities to be purchased by
each Underwriter and whether any of such Designated Securities shall be
covered by Delayed Delivery Contracts (as defined in Section 4 hereof)
and the commission payable to the Underwriters with respect thereto and
shall set forth the date, time and manner of delivery of such Designated
Securities and payment therefor. The Pricing Agreement shall also
describe, in a manner consistent with the Indenture and the registration
statement and prospectus with respect thereto, the principal terms of
such Designated Securities. A Pricing Agreement shall be in the form of
an executed writing (which may be in counterparts), and may be evidenced
by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of
communications transmitted. The obligations of the 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;
(b) The issue and sale of the Securities pursuant to any Pricing
Agreement and under any Delayed Delivery Contract and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Delayed Delivery Contract will not conflict with
or result in any breach which would constitute a material default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company material
to the Company pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money to which the Company
is a party or by which the Company may be bound or to which any of the
property or assets of the Company, material to the Company, is subject,
nor will such action result in any material violation of the provisions
of the Certificate of Incorporation, as amended or the By-Laws of the
Company or, to the best of its knowledge, any statute or any order, rule
or regulation applicable to the Company of any court or any Federal,
State or other regulatory authority or other governmental body having
jurisdiction over the Company, and no consent, approval, authorization
or other order of, or filing with, any court or any such regulatory
authority or other governmental body is required for the issue and sale
of the Designated Securities except as may be required under the Act,
the Exchange Act, the Trust Indenture Act and securities laws of the
various states and other jurisdictions in which the Underwriters will
offer and sell the Designated Securities; and
(c) In the event any of the Securities are purchased pursuant to
Delayed Delivery Contracts, each of such Delayed Delivery Contracts has
been duly authorized by the Company and, when duly executed and
delivered by the Company and the institutional purchaser named therein,
will constitute a valid and legally binding agreement of the Company
enforceable in accordance with its terms, except as the same may be
limited by insolvency, bankruptcy, reorganization or other laws relating
to or affecting the enforcement of creditors' rights or by general
equity principles.
4. Upon the execution of the Pricing Agreement applicable to
any Designated Securities and authorization by you of the release of the
Underwriters' Securities, the several Underwriters propose to offer the
Underwriters' Securities for sale upon the terms and conditions set
forth in the Prospectus as amended or supplemented.
The Company may specify in Schedule II to the Pricing Agreement
applicable to any Designated Securities that the Underwriters are
authorized to solicit offers to purchase Designated Securities from the
Company pursuant to delayed delivery contracts (herein called "Delayed
Delivery Contracts"), substantially in the form of Annex II attached
hereto but with such changes therein as you and the Company may
authorize or approve. If so specified, the Underwriters will endeavor
to make such arrangements, and as compensation therefor the Company will
pay to you, for the accounts of the Underwriters, at the Time of
Delivery (as defined in Section 5 hereof), such commission, if any, as
may be set forth in such Pricing Agreement. Delayed Delivery Contracts,
if any, are to be with institutional investors of the types mentioned
under the subcaption "Delayed Delivery Arrangements" in the Prospectus
and subject to other conditions therein set forth. The Underwriters
will not have any responsibility in respect of the validity or
performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be deducted from
the principal amount of Designated Securities to be purchased by each
Underwriter as set forth in Schedule I to the Pricing Agreement
applicable to such Designated Securities shall be, in each case, the
principal amount of Contract Securities which the Company has been
advised by you have been attributed to such Underwriter, provided that,
if the Company has not been so advised, the amount of Contract
Securities to be so deducted shall be, in each case, that proportion of
Contract Securities which the principal amount of Designated Securities
to be purchased by such Underwriter under such Pricing Agreement bears
to the total principal amount of the Designated Securities (rounded as
you may determine to the nearest $1,000 principal amount). The total
principal amount of Underwriters' Securities to be purchased by all the
Underwriters pursuant to such Pricing Agreement shall be the total
principal amount of Designated Securities set forth in Schedule I to
such Pricing Agreement less the principal amount of the Contract
Securities. The Company will deliver to you not later than 3:30 p.m.,
New York time, on the third business day preceding the Time of Delivery
specified in the applicable Pricing Agreement (or such other time and
date as you and the Company may agree upon in writing) a written notice
setting forth the principal amount of Contract Securities.
The Pricing Agreement applicable to any Designated Securities may
provide that the Company and any entity acting as an underwriter with
respect to such Designated Securities may enter into a deferred pricing
agreement in the form set forth in a schedule attached to such Pricing
Agreement.
5. Underwriters' Securities to be purchased by each Underwriter
pursuant to the Pricing Agreement relating thereto, in definitive form
to the extent practicable, and in such authorized denominations and
registered in such names as you may request upon at least two business
days prior notice to the Company, shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment
by such Underwriter or on its behalf of the purchase price therefor, by
certified or official bank check or checks or wire transfer, as
specified in such Pricing Agreement, payable to the order of the Company
in the funds specified in such Pricing Agreement, all at the place and
time and date specified in such Pricing Agreement or at such other place
and time and date as you and the Company may agree upon in writing, such
time and date being herein called the "Time of Delivery" for such
Securities.
Concurrently with the delivery of and payment for the
Underwriters' Securities, the Company will deliver to you for the
accounts of the Underwriters payment, by certified or official bank
check or checks or wire transfer, as specified in such Pricing
Agreement, payable to the order of the party designated in the Pricing
Agreement relating to such Securities in the amount of any compensation
payable by the Company to the Underwriters in respect of any Delayed
Delivery Contracts as provided in Section 3 hereof and in the Pricing
Agreement relating to such Securities.
6. Each of the Company and Sears agrees with each of the
Underwriters of Designated Securities:
(a) To make no further amendment or any supplement to the
Registration Statement or the Prospectus as amended or supplemented
after the date of the Pricing Agreement relating to such Securities and
prior to the Time of Delivery for such Securities without first having
furnished you with a copy of the proposed form thereof and given you a
reasonable opportunity to review the same; to advise you promptly of any
such amendment or supplement after such Time of Delivery and furnish you
with copies thereof and to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company or
Sears, respectively, with the Commission pursuant to Section 13 or 14 of
the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Securities, and during
such same period to advise you, promptly after the Company or Sears
receives notice thereof, of the time when the Registration Statement, or
any amendment thereto, or any amended Registration Statement has become
effective or any supplement to the Prospectus or any amended Prospectus
has been filed, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Prospectus, or the
suspension of the qualification of such Securities for offering or sale
in any jurisdiction, or the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or
for additional information; and in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
such Prospectus or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify such Securities for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of such Securities, provided that in
connection therewith neither the Company nor Sears shall be required to
qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of such Securities and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify you and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and
(d) To make generally available to its security holders, in
accordance with the provisions of Rule 158 under the Act or otherwise,
as soon as practicable, but in any event not later than forty-five days
after the end of the fourth full fiscal quarter (ninety days in the case
of the last fiscal quarter in any fiscal year) following the fiscal
quarter ending after the latest of (x) the effective date of the
Registration Statement, (y) the effective date of the post-effective
amendment thereto hereinafter referred to, and (z) the date of the
filing of the report hereinafter referred to, earnings statements of the
Company and Sears and its consolidated subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and covering a period
of at least twelve consecutive months beginning after the latest of (i)
the effective date of such Registration Statement, (ii) the effective
date of the post-effective amendment, if any, to such Registration
Statement (within the meaning of Rule 158) next preceding the date of
the Pricing Agreement relating to the Designated Securities and (iii)
the date of filing of the last report of the Company or Sears
incorporated by reference into the Prospectus (within the meaning of
Rule 158) next preceding the date of the Pricing Agreement relating to
the Designated Securities.
7. The Company agrees with each of the Underwriters of
Designated Securities:
(a) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the termination of trading restrictions for such
Designated Securities, of which termination you agree to give the
Company prompt notice confirmed in writing, and (ii) the Time of
Delivery for such Designated Securities, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which
mature more than one year after such Time of Delivery and which are
substantially similar to such Designated Securities, without your prior
written consent, which consent shall not be unreasonably withheld,
except pursuant to arrangements of which you have been advised by the
Company prior to the time of execution of such Pricing Agreement, which
advice is confirmed in writing to you by the end of the business day
following the date of such Pricing Agreement; and
(b) To pay or cause to be paid all expenses, preapproved by the
Company, incident to the performance of its obligations hereunder and
under any Pricing Agreement or any Delayed Delivery Contract, including
the cost of all qualifications of the Securities under state securities
laws (including reasonable fees of counsel to the Underwriters in
connection with such qualifications and in connection with legal
investment surveys) and the cost of printing this Agreement, any Pricing
Agreement, and any blue sky and legal investment memoranda.
8. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated
Securities shall be subject, in their discretion, to the condition that
all representations and warranties and other statements of the Company
or Sears herein are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that each of the
Company and Sears shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission
shall have been complied with to your reasonable satisfaction.
(b) All corporate proceedings and related matters in connection
with the organization of the Company, the validity of the Indenture and
the registration, authorization, issue, sale and delivery of the
Designated Securities shall have been satisfactory to counsel to the
Underwriters, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable
them to pass upon the matters referred to in this subdivision (b).
(c) Counsel to the Company and Sears shall have furnished to you
such counsel's written opinion, dated the Time of Delivery for such
Designated Securities, in form and substance satisfactory to you in your
reasonable judgment, to the effect that:
(i) Each of the Company and Sears has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its respective state of incorporation;
(ii) The authorized capital stock of the Company consists
of 500,000 shares of common stock, par value $100.00 per share, 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) In the event any of the Designated Securities are to
be purchased pursuant to Delayed Delivery Contracts, each of such
Delayed Delivery Contracts has been duly authorized, executed and
delivered on the part of the Company and, assuming such Contracts have
been duly executed and delivered by the institutional purchasers named
therein, constitutes a valid and legally binding agreement of the
Company in accordance with its terms, except as the foregoing may be
limited by insolvency, bankruptcy, reorganization or other laws relating
to or affecting the enforcement of creditors' rights or by general
equity principles;
(vi) The issue and sale of the Designated Securities and
the compliance by the Company with all of the provisions of the
Designated Securities, the Indenture, each of the Delayed Delivery
Contracts, if any, this Agreement and the Pricing Agreement with respect
to the Designated Securities will not (a) conflict with or result in any
breach which would constitute a material default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of the Company material to the Company, pursuant
to the terms of, any indenture, loan agreement or other agreement or
instrument for borrowed money known to such counsel to which the Company
is a party or by which the Company may be bound or to which any of the
property or assets of the Company material to the Company is subject,
(b) result in any material violation of the provisions of the
Certificate of Incorporation, as amended or the By-Laws of the Company
or (c) to the best of the knowledge of such counsel, result in any
material violation of any statute or any order, rule or regulation
applicable to the Company of any court or any Federal, State or other
regulatory authority or other governmental body having jurisdiction over
the Company, other than the Act, the Exchange Act, the Trust Indenture
Act and the rules and regulations pursuant to each such act, and other
than the securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Designated Securities;
and, to the best knowledge of such counsel, no consent, approval,
authorization or other order of, or filing with, any court or any such
regulatory authority or other governmental body is required for the
issue and sale of the Designated Securities except as may be required
under the Act, the Exchange Act, the Trust Indenture Act and securities
laws of the various states or other jurisdictions which are applicable
to the issue and sale of the Designated Securities;
(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) The Indenture has been duly authorized, executed
and delivered on the part of the Company and, as to the Company, is a
valid and binding instrument in accordance with its terms except as the
foregoing may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
or by general equity principles, and has been qualified under the Trust
Indenture Act; the Underwriters' Securities have been duly authorized
and (assuming their due authentication by the Trustee) have been duly
executed, issued and delivered on the part of the Company and constitute
valid and binding obligations of the Company in accordance with their
terms, entitled to the benefits of the Indenture, except as the same may
be limited by insolvency, bankruptcy, reorganization or other laws
relating to or affecting the enforcement of creditors' rights or by
general equity principles; the Contract Securities, if any, when
executed, authenticated, issued and delivered pursuant to the Indenture
and Delayed Delivery Contracts, will constitute valid and binding
obligations of the Company in accordance with their terms, entitled to
the benefits of the Indenture, except as the foregoing may be limited by
insolvency, bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general equity
principles;
(ix) 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;
(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 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;
(xi) 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
(xii) 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 Morgan
Stanley & Co. Incorporated, representing you.
All statements, requests, notices and agreements hereunder shall
be in writing or by telegram if promptly confirmed in writing and if to
the Underwriters shall be sufficient in all respects, if delivered or
sent by registered mail to you as the Representatives at 1221 Avenue of
the Americas, New York, New York 10020, Attention: Managing Director,
Syndicate Desk; and if to the Company shall be sufficient in all
respects if delivered or sent by registered mail to the Company at 3711
Kennett Pike, Greenville, Delaware 19807, Attention: Richard F. Kotz,
Secretary; and if to Sears shall be sufficient in all respects if
delivered or sent by registered mail to Sears at Sears Tower, Chicago,
Illinois 60684, Attention: David Shute, Senior Vice President, General
Counsel and Secretary.
14. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company,
Sears and, to the extent provided in Section 9 and Section 11 hereof,
the officers and directors of the Company and Sears and each person who
controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or
any such Pricing Agreement. No purchaser of any of the Securities from
any Underwriter shall be deemed a successor or assign by reason merely
of such purchase.
15. Time shall be of the essence of each Pricing Agreement.
16. This Agreement and each Pricing Agreement shall be governed
by, and construed in accordance with, the internal laws of the State of
New York.
17. This Agreement and each Pricing Agreement may be executed by
any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all
such respective counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please
sign and return two counterparts hereof.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By:/S/Keith E. Trost
SEARS, ROEBUCK AND CO.
By:/S/Alice M. Peterson
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By:/S/Harold J. Hendershot III
Principal
/S/Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By:/Steve R. Jackson
Managing Director
SALOMON BROTHERS INC
By:/S/Anne Clarke Wolff
Vice President
ANNEX I
PRICING AGREEMENT
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SALOMON BROTHERS INC
As [Representatives of] the several
Underwriters named in Schedule I hereto
c/o Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
,199
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company"), proposes subject to the terms and conditions stated herein
and in the Underwriting Agreement, dated , 199 (the
"Underwriting Agreement"), executed between the Company and Sears,
Roebuck and Co. ("Sears"), on the one hand, and
on the other hand, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in
full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and, except where otherwise
specified, as of the date of this Pricing Agreement, except that each
representation and warranty with respect to the Prospectus in Sections 2
and 3 of the Underwriting Agreement shall be deemed to be a
representation and warranty as of the date of the Underwriting Agreement
in relation to the Prospectus (as therein defined) and also a
representation and warranty as of the date of this Pricing Agreement in
relation to the Prospectus as amended or supplemented. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used
herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities,
in the form heretofore delivered to you is now proposed to be filed with
the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company, at the time and place and at a purchase price to the
Underwriters set forth in Schedule II hereto, the principal amount of
Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto, less the principal amount of Designated Securities
covered by Delayed Delivery Contracts, if any, as may be specified in
such Schedule II.
If the foregoing is in accordance with your understanding, please
sign and return to us two counterparts hereof, and upon acceptance
hereof by you on behalf of each of the Underwriters, this letter and
such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding
agreement between the Company, Sears and each of the Underwriters. It
is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be supplied to the
Company upon request. You represent that you are authorized on behalf
of yourselves and on behalf of each of the other Underwriters named in
Schedule I hereto to enter into this Agreement.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By:
Principal
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By:
Managing Director
SALOMON BROTHERS INC
By:
Vice President
On behalf of each of the Underwriters
SCHEDULE I
Underwriter Principal
Amount of
Designated
Securities to
be purchased
Morgan Stanley & Co. Incorporated $
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Salomon Brothers Inc
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:*
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,
[FN] * The terms of an attached form of security may be incorporated by
reference.
[on or after , at the following redemption prices
(expressed in percentages of
principal amount). If [redeemed on or before , %, and
if] redeemed during the
12-month period beginning ,
Year Redemption Price
and thereafter at 100% of their principal amount, together in each
case with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at
the election of the Company, at a redemption price equal to the
principal amount thereof, plus accrued interest to the date of
redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction of refunding]
Sinking Fund Provisions:*
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund
to retire $ principal amount of Designated Securities on
in each of the years through at 100% of their principal
amount plus accrued interest] [, together with (cumulative) (non-
cumulative) redemptions at the option of the Company to retire an
additional $ principal amount of Designated Securities in the
years through at 100% of their principal amount plus
accrued interest].
Time of Delivery:
[ ] A.M., New York time, [ ] ,19
Funds in which payment by Underwriters to Company to be made:
[ ] Clearing House Funds
[ ] Same day funds
Method of Payment:
[Certified or official bank check or checks]
[Wire transfer to ]
[FN] * The terms of an attached form f security may be incorporated
by reference.
Closing Location:
Delayed Delivery:
[None] [Underwriters are authorized to solicit Delayed Delivery
Contracts relating to a maximum of $ in aggregate principal
amount of the Designated Securities. Underwriters' commission shall be
% of the principal amount of Designated Securities for which Delayed
Delivery Contracts have been entered into. Such commission shall be
payable to the order of .]
[Certified or official bank check or checks]
[Wire transfer to ]
Counsel:
To the Company, [ ]
To Sears, [ ]
To the Underwriters, [ ]
[Other Terms]:*
[FN]*The terms of an attached form of security may be incorporated by
reference.
ANNEX II
DELAYED DELIVERY CONTRACT
SEARS ROEBUCK ACCEPTANCE CORP.,
c/o
Attention:
,199
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from Sears Roebuck
Acceptance Corp. (hereinafter called the "Company"), and the Company
agrees to sell to the undersigned,
$
principal amount of the Company's [Title of Designated Securities]
(hereinafter called the "Designated Securities"), offered by the
Company's Prospectus dated , 199 as amended or supplemented, receipt
of a copy of which is hereby acknowledged, at a purchase price of %
of the principal amount thereof, plus accrued interest from the date
from which interest accrues as set forth below, and on the further terms
and conditions set forth in this contract.
[The undersigned will purchase the Designated Securities from the
Company on , 199 (the "Delivery Date") and interest on the
Designated Securities so purchased will accrue from , 199 .]
[The undersigned will purchase the Designated Securities from the
Company on the delivery date or dates and in the principal amount or
amounts set forth below:
Principal Date From Which
Delivery Date Amount Interest Accrues
, 199 $ , 199
, 199 $ , 199
Each such date on which Designated Securities are to be purchased
hereunder is hereinafter referred to as a "Delivery Date".]
Payment for the Designated Securities which the undersigned has
agreed to purchase on [the] [each] Delivery Date shall be made to the
Company or its order by [certified or official bank check] [in New York
Clearing House funds at the office of Sears Roebuck Acceptance Corp.,
Greenville, Delaware] [or] [by wire transfer, in immediately available
funds, to a bank account specified by the Company], on [the] [such]
Delivery Date upon delivery to the undersigned of the Designated
Securities then to be purchased by the undersigned in definitive fully
registered form and in such denominations and registered in such names
as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to
[the] [such] Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Designated Securities on [the] [each] Delivery Date shall be
subject to the conditions that (a) the purchase of Designated Securities
to be made by the undersigned shall not on [the] [such] Delivery Date be
prohibited under the laws of the jurisdiction to which the undersigned
is subject and (b) the Company, on or before , 199 , shall
have sold to the several Underwriters, pursuant to the Pricing Agreement
dated , 199 with the Company and Sears, Roebuck and Co.
("Sears"), an aggregate principal amount of Designated Securities equal
to $ , minus the aggregate principal amount of Designated
Securities covered by this contract and other contracts similar to this
contract. The obligation of the undersigned to take delivery of and
make payment for Designated Securities shall not be affected by the
failure of any purchaser to take delivery of and make payment for
Designated Securities pursuant to other contracts similar to this
contract.
Promptly after completion of the sale to the Underwriters the
Company will mail or deliver to the undersigned at its address set forth
below notice to such effect, accompanied by a copy of the Opinion of
Counsel for the Company and Sears delivered to the Underwriters in
connection therewith.
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the
Designated Securities hereby agreed to be purchased by it under the laws
of the jurisdiction to which the undersigned is subject.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be
assignable by either party hereto without written consent of the other.
This contract may be executed by either of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same
instrument.
This contract shall be governed by, and construed in accordance
with, the internal laws of the State of New York.
It is understood that the acceptance by the Company of any Delayed
Delivery Contract (including this contract) is in the Company's sole
discretion and that, without limiting the foregoing, acceptances of such
contracts need not be on a first-come, first-served basis. If this
contract is acceptable to the Company, it is requested that the Company
sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below.
This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered by the
Company.
Yours very truly,
______________________________
By_____________________________
(Signature)
_______________________________
(Name and Title)
________________________________
(Address)
Accepted, ,199
in Greenville, Delaware
SEARS ROEBUCK ACCEPTANCE CORP.
By ________________________________
(Title)
PRICING AGREEMENT
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SALOMON BROTHERS INC
As the several Underwriters named
in Schedule I hereto
c/o Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
June 8, 1995
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 June 8, 1995 (the "Underwriting
Agreement"), executed between the Company and Sears, Roebuck and Co.
("Sears"), on the one hand, and Morgan Stanley & Co. Incorporated,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Salomon Brothers Inc on the other hand, to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedule II hereto (the "Designated
Securities"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to
be a part of this Agreement to the same extent as if such provisions had
been set forth in full herein; and each of the representations and
warranties set forth therein shall be deemed to have been made at and,
except where otherwise specified, as of the date of this Pricing
Agreement, except that each representation and warranty with respect to
the Prospectus in Sections 2 and 3 of the Underwriting Agreement shall
be deemed to be a representation and warranty as of the date of the
Underwriting Agreement in relation to the Prospectus (as therein
defined) and also a representation and warranty as of the date of this
Pricing Agreement in relation to the Prospectus as amended or
supplemented. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities,
in the form heretofore delivered to you is now proposed to be filed with
the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company, at the time and place and at a purchase price to the
Underwriters set forth in Schedule II hereto, the principal amount of
Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto, less the principal amount of Designated Securities
covered by Delayed Delivery Contracts, if any, as may be specified in
such Schedule II.
If the foregoing is in accordance with your understanding, please
sign and return to us two counterparts hereof, and upon acceptance
hereof by you, 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.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By:/S/Keith E. Trost
SEARS, ROEBUCK AND CO.
By:/S/Alice M. Peterson
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By:/S/ Harold J. Hendershot
Principal
/S/Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By:/S/Steven R. Jackson
Managing Director
SALOMON BROTHERS INC
By: /S/Anne Clarke Wolff
Vice President
SCHEDULE I
Underwriter Principal
Amount of
Designated
Securities
to
be purchased
Morgan Stanley & Co. Incorporated $ 62,500,000
Goldman, Sachs & Co. 62,500,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 62,500,000
Salomon Brothers Inc 62,500,000
Total $250,000,000
SCHEDULE II
Title of Designated Securities:
6-1/2% Notes due June 15, 2000
Aggregate principal amount:
$250,000,000
Price to Public:
99.583% of the principal amount of
the Designated Securities, plus accrued
interest from June 13, 1995 to the Time of
Delivery
Purchase Price by Underwriters:
99.033% of the principal amount of the
Designated Securities, plus accrued
interest from June 13, 1995 to the Time of
Delivery
Indenture:
Indenture, dated as of May 15, 1995,
between the Company and The Chase Manhattan
Bank, N.A., as Trustee
Maturity:*
Interest Rate:*
Interest Payment dates:*
Redemption Provisions:*
[FN] Incorporated by reference to attached form of security.
Sinking Fund Provisions:
None
Time of Delivery:
9:00 A.M., Chicago time, June 13, 1995
Funds in which payment by Underwriters to Company to be made:
Same day funds
Method of Payment:
Wire transfer to The Chase Manhattan Bank, N.A. for the account of
Sears Roebuck Acceptance Corp., account number 900-9000317
Closing Location:
Chicago, New York and Delaware
Delayed Delivery:
None
Counsel:
To the Company and to Sears, Robert J. Pence, Senior Counsel,
Corporate Law Department of Sears
To the Underwriters, Wachtell, Lipton, Rosen & Katz
<PAGE>
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number
$.............
SEARS ROEBUCK ACCEPTANCE CORP.
6-1/2% Note due June 15, 2000
6-1/2% 6-1/2%
Due 2000 Due 2000
Sears Roebuck Acceptance Corp., a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the
"Company"), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
Dollars upon presentation and surrender of this Note, on the
fifteenth day of June, 2000, at the office or agency of the Company in
the Borough of Manhattan in The City of New York or, at the option of
the holder hereof, such office or agency, if any, maintained by the
Company 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, in such coin or currency of the United
States of America as at the time of payment is legal tender for public
and private debts, and to pay interest on said principal sum at the rate
of 6-1/2% per annum, 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 or at either of such offices or
agencies, in like coin or currency, from the June 15 or December 15, as
the case may be, next preceding the date hereof to which interest has
been paid on the Notes referred to on the reverse hereof (unless the
date hereof is the date to which interest has been paid on such Notes,
in which case from the date hereof, or unless the date hereof is prior
to December 15, 1995, in which case from June 13, 1995), semiannually,
commencing on December 15, 1995, on June 15 and December 15, until
payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if this Note is dated after any June 1
and before the following June 15, or after any December 1 and before the
following December 15, then this Note shall bear interest from such
following June 15 or December 15, provided, however, that if the Company
shall default in the payment of interest due on such following June 15
or December 15, this Note shall bear interest from the next preceding
June 15 or December 15 to which interest has been paid on such Notes, or
if no interest has been paid on such Notes, then from June 13, 1995.
The interest so payable on any June 15 or December 15 will, subject to
certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Note is registered at
the close of business on the June 1 prior to such June 15 or the
December 1 prior to such December 15. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable
to the registered holder on such Interest Payment Date, and may be paid
to the Person in whose name this Note 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 of which shall be given to
Noteholders not less than 10 days prior to such Special Record Date, or
may be paid, at any time in any other lawful manner, all as more fully
provided in such Indenture.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, and such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof or any indenture supplemental thereto,
or become valid or obligatory for any purpose, until the certificate of
authentication hereon shall have been signed by or on behalf of the
Trustee under such Indenture.<PAGE>
IN WITNESS WHEREOF, the Company has
caused this instrument to be duly executed under its corporate seal.
Dated: ........................................
Sears Roebuck Acceptance Corp.
By _______________________________
President
By ______________________________
Vice President, Finance and
Assistant Secretary
[Corporate Seal]
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities of the series designated and referred
to in the within-mentioned Indenture.
The Chase Manhattan Bank, N.A,
as Trustee
By
__________________________________
Authorized Officer
[FORM OF REVERSE SIDE OF NOTE]
SEARS ROEBUCK ACCEPTANCE CORP.
6-1/2% Note due June 15, 2000
This Note is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Company (hereinafter
called the "Securities") of the series hereinafter specified, unlimited
in aggregate principal amount, all issued or to be issued under or
pursuant to an indenture dated as of May 15, 1995, executed between the
Company and THE CHASE MANAHATTAN BANK, N.A., as Trustee; to which
indenture and all indentures supplemental thereto (herein collectively
called the "Indenture") reference is hereby made for a specification of
the rights and limitation of rights thereunder of the Holders of the
Securities, the rights and obligations thereunder of the Company and the
rights, duties and immunities thereunder of the Trustee. The Securities
may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may mature at different
times, may bear interest (if any) at different rates, may be subject to
different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in
the Indenture provided. This Note is one of a series designated as the
"6-1/2% Notes due June 15, 2000" of the Company, limited in aggregate
principal amount to $250,000,000 (hereinafter referred to as the
"Notes"). All terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
In case a default, as defined in the Indenture, shall occur and be
continuing with respect to the Notes, the principal amount of all Notes
then outstanding under the Indenture may be declared or may become due
and payable upon the conditions and in the manner and with the effect
provided in the Indenture. The Indenture provides that such declaration
may in certain events be annulled by the Holders of a majority in
principal amount of the Notes outstanding.
To the extent permitted by, and as provided in, the Indenture,
indentures supplemental thereto may be entered into with the consent of
the Company and with the consent of the Holders of not less than a
majority in principal amount of the outstanding Securities (as defined
in the Indenture) of each series to be affected; provided, however, that
no such supplemental indenture shall (i) change the Stated Maturity of
the principal of (and premium, if any, on), or the interest on, any
Security, or reduce the principal amount of (and 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 of the Indenture 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.
The Indenture also provides that the Holders of a majority in
principal amount of the Securities of any series then outstanding may
waive any past default under the Indenture and its consequences, except
a default in the payment of the principal of or interest or premium, if
any, on any of the Securities.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, at the
rate, and in the currency, herein prescribed.
This Note is transferable by the registered Holder hereof or by his
attorney duly authorized in writing at the office or agency of the
Company in the Borough of Manhattan of The City of New York or, at the
option of the Holder hereof such office or agency, if any, maintained by
the Company 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, without charge except for any tax or
other governmental charge imposed in relation thereto, but only in the
manner and subject to the limitations provided in the Indenture and upon
surrender of this Note. Upon any such transfer a Note or Notes of
authorized denominations for a like aggregate principal amount and
bearing a number not contemporaneously outstanding will be issued in
exchange herefor.
The Notes are issuable only as registered Notes without coupons, in
denominations of $1,000 and any multiple of $1,000. In the manner and
subject to the limitations provided in the Indenture, Notes are
exchangeable, without charge except for any tax or other governmental
charge imposed in relation thereto, for other Notes of authorized
denominations for a like aggregate principal amount, at the office or
agency of the Company in the Borough of Manhattan of The City of New
York or, at the option of the Holder hereon, such office or agency, if
any, maintained by the Company 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.
The Company, the Trustee, any Authenticating Agent, any paying agent
and any Security registrar may deem and treat the registered Holder
hereof as the absolute owner hereof (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing
hereon by anyone other than the Company or any Security registrar) for
the purpose of receiving payment of or on account of the principal
hereof and interest hereon and for all other purposes, and neither the
Company, the Trustee, an Authenticating Agent, a paying agent nor
Security registrar shall be affected by any notice to the contrary. All
such payments shall be valid and effectual to satisfy and discharge the
liability upon this Note to the extent of the sum or sums so paid.
No recourse shall be had for the payment of the principal of or the
interest on this Note or for any claim based hereon or otherwise in any
manner in respect hereof, or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future,
of the Company or of any predecessor or successor corporation, whether
by virtue of any constitutional provision or statute or rule of law, or
by the enforcement of any assessment or penalty or in any other manner,
all such liability being expressly waived and released by the acceptance
hereof and as part of the consideration for the issue hereof. In the
event of any sale or transfer of its assets and liabilities
substantially as an entirety to a successor corporation, the predecessor
corporation may be dissolved and liquidated as more fully set forth in
the Indenture.
Sears Roebuck Acceptance Corp.
$2,000,000,000 Medium-Term Notes Series I
DISTRIBUTION AGREEMENT
June 15, 1995
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. $2,000,000,000 (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 May 15,
1995 (the "Indenture"), between the Company and The Chase Manhattan
Bank, N.A., 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.
33-58139) in respect of U.S. $3,000,000,000 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.................... .125%
1 year to less than 18 months................... .150%
18 months to less than 2 years.................. .200%
2 years to less than 3 years.................... .250%
3 years to less than 4 years.................... .350%
4 years to less than 5 years.................... .450%
5 years to less than 6 years.................... .500%
6 years to less than 7 years.................... .550%
7 years to less than 11 years................... .600%
11 years to less than 15 years.................. .625%
15 years to less than 20 years.................. .675%
20 years to 30 years............................ .750%
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 Sears Tower, Chicago, Illinois 60684,
Attention: Senior Vice President, General Counsel and Secretary,
Facsimile Transmission No. (312) 875-9851 with a copy to the Vice
President and Treasurer, Facsimile Transmission No. (312) 875-3690.
Upon request of any party hereto, any statements, requests, notices and
advices transmitted by facsimile shall be promptly followed by delivery
of executed documents by registered mail.
14. This Agreement and any Terms Agreement shall
be binding upon, and inure solely to the benefit of, each Agent, the
Company and Sears, and to the extent provided in Section 9, Section 10
and Section 11 hereof, the officers and directors of the Company and
Sears and any person who controls any Agent or the Company, and their
respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of
this Agreement or any Terms Agreement. No purchaser of any of the Notes
through or from any Agent hereunder shall be deemed a successor or
assign by reason merely of such purchase.
15. Time shall be of the essence in this Agreement
and any Terms Agreement. As used herein, the term "business day" shall
mean any day when the office of the Commission in Washington, D.C. is
normally open for business or each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a legal holiday for banking institutions in any
of the City of Chicago, The City of New York or the City of Wilmington.
16. This Agreement and any Terms Agreement shall
be governed by, and construed in accordance with, the internal laws of
the State of New York.
17. This Agreement (including such Appointments
and Acceptances of Agent as may be executed and delivered by the Company
and Sears and accepted by one or more Agents from time to time) and any
Terms Agreement may be executed by any one or more of the parties hereto
and thereto in any number of counterparts, each of which shall be an
original, but all of such respective counterparts shall together
constitute one and the same instrument.
<PAGE>
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:/S/ Keith E. Trost
SEARS, ROEBUCK AND CO.
By:/S/ Alice M. Peterson
Agents Designated Hereby:
Accepted in New York, New York, as of the date set forth on the first
page of the Distribution Agreement:
GOLDMAN, SACHS & CO.
Address: 85 Broad Street, New York, New York 10004, Attn: Registration
Department
Facsimile Transmission No.: (212) 902-3000
/S/Goldman, Sachs & Co.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Address: 250 Vesey Street, 23rd Floor, World Financial Center, North
Tower, New York, New York 10281,
Attn: MTN Product Management
Facsimile Transmission No.: (212) 449-2234
By:/S/Scott G. Primrose
MORGAN STANLEY & CO. INCORPORATED
Address: 1221 Avenue of the Americas, New York, New York 10021, Attn:
Managing Director, Short- and
Medium-Term Note Department
Facsimile Transmission No.: (212) 764-7490
copy to: 1251 Avenue of the Americas, New York, New York 10020, Attn:
Manager, Credit Department
Facsimile Transmission No.: (212) 703-4575
By:/S/Harold J. Hendershot III
SALOMON BROTHERS INC
Address: Seven World Trade Center, 32st Floor, New York, New York 10048,
Attn: Medium-Term Note
Department
Facsimile Transmission No.: (212) 783-2274
By:/S/Anne Clarke Wolff
ANNEX I
Sears Roebuck Acceptance Corp.
$ Medium Term Notes
Series I
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: ]
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 $2,000,000,000 are to be offered from time to time by
Sears Roebuck Acceptance Corp. (the "Company") through agents of the
Company (together, in such capacity, the "Agents"). Each Agent has
agreed to use its reasonable efforts to solicit offers to purchase Notes
directly from the Company (an Agent, in relation to a purchase of a
particular Note by a purchaser solicited by such Agent, being herein
referred to as the "Selling Agent") and may also purchase Notes from the
Company as principal (an Agent, in relation to a purchase of a Note by
such Agent as principal other than pursuant to a Terms Agreement being
herein referred to as the "Purchasing Agent"). The Notes are being sold
pursuant to a Distribution Agreement, dated June 15, 1995 (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 May
15, 1995 (the "Indenture"), between the Company and The Chase Manhattan
Bank, N.A., 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 June 15,
1995, and a Medium-Term Note Certificate Agreement, dated March 10, 1989
between the Trustee and DTC (the "Certificate Agreement"), and the
Trustee's obligations as a participant in DTC including DTC's Same-Day
Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes which have the
same original issue date, redemption or repayment provisions, Interest
Payment Dates, Regular Record Dates, interest rate, Specified Currency
and maturity date (collectively, the "Fixed Rate Terms") will be
represented
initially by a single Global Note in fully registered form without
coupons.
All Floating Rate Notes which have the
same original issue date, redemption or repayment provisions, Interest
Payment Dates, Regular Record Dates, Interest Rate Basis, Interest
Determination Dates, Interest Reset Dates, Calculation Dates, Index
Maturity, Spread or Spread Multiplier, if any, Minimum Rate, if any,
Maximum Rate, if any, Specified Currency and maturity date
(collectively, the "Floating Rate Terms") will be represented initially
be a single Global Note in fully registered form without coupons.
Identification: The Company has received from the
CUSIP Service Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") a series of approximately 900 CUSIP numbers for future
assignment to Global Notes, and the Company has delivered to the Trustee
and DTC such list of such CUSIP numbers. The Trustee will assign CUSIP
numbers to Global Notes as described below. DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that have been assigned
to Global Notes. The Trustee will notify the Company at any time when
fewer than 100 of the reserved CUSIP numbers remain unassigned to Global
Notes, and, if it deems necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Notes. Upon obtaining such
additional CUSIP numbers, the Company will deliver a list of such
additional numbers to the Trustee and DTC.
Registration: Each Global Note will be registered in
the name of Cede & Co., as nominee for DTC, on the Security Register
maintained under the Indenture. The beneficial owner of a Book-Entry
Note (or one or more indirect participants in DTC designated by such
owner) will designate one or more participants in DTC (the
"Participants") to act as agent or agents for such owner in connection
with the book-entry system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions provided by such
Participants, a credit balance with respect to such Book-Entry Note in
the account of such Participants. The ownership interest of such
beneficial owner in such Book-Entry Note will be recorded through the
records of such Participants or through the separate records of such
Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in turn, by Participants
(and in certain cases, one or more indirect participants in DTC) acting
on behalf of beneficial transferors and transferees of such Book-Entry
Note.
Exchanges: The Trustee, at the Company's request,
may deliver to DTC and the CUSIP Service Bureau at any time a written
notice of consolidation specifying (a) the CUSIP numbers of two or more
outstanding Global Notes having the same Fixed Rate Terms or Floating
Rate Terms, as the case may be (except that original issue dates need
not be the same), and for which interest has been paid to the same date;
(b) a date, occurring at least 30 days after such written notice is
delivered and at least 30 days before the next Interest Payment Date for
the related Book-Entry Notes, on which such Global Notes shall be
exchanged for a single replacement Global Note; and (c) a new CUSIP
number to be assigned to such replacement Global Note. Upon receipt of
such a notice, DTC will send to its participants (including the Trustee)
a written reorganization notice to the effect that such exchange will
occur on such date.
Prior to the specified exchange date,
the Trustee will deliver to the CUSIP Service Bureau written notice
setting forth such exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global Notes to
be exchanged will no longer be valid.
On the specified exchange date, the
Trustee will exchange such Global Notes for a single Global Note bearing
the new CUSIP number. The CUSIP numbers of the exchanged Global Notes
will, in accordance with CUSIP Service Bureau procedures, be cancelled
and not immediately reassigned.
Notwithstanding the foregoing, if the
Global Notes to be exchanged exceed $150,000,000 in aggregate principal
amount, one replacement Global Note will be authenticated and issued to
represent each $150,000,000 of principal amount of the exchanged Global
Notes and an additional Global Note will be authenticated and issued to
represent any remaining principal amount of such Global Notes, subject
to the minimum denomination restrictions described in General Procedures
- -Denominations (see "Denominations" below).
Denominations: Global Notes representing Book-Entry
Notes will be denominated in principal amounts not in excess of
$150,000,000. If one or more Book-Entry Notes having an aggregate
principal amount in excess of $150,000,000 would, but for the preceding
sentence, be represented by a single Global Note, then one Global Note
will be issued to represent each $150,000,000 principal amount of such
Book-Entry Note or Book-Entry Notes and an additional Global Note will
be issued to represent any remaining principal amount of such Book-Entry
Note or Book-Entry Notes, subject to the minimum denomination
restrictions described in General Procedures - Denominations. In such a
case, each of the Global Notes representing such Book-Entry Note or
Notes shall be assigned the same CUSIP number.
Interest: DTC will arrange for each pending
deposit message described under Settlement Procedure B below to be
transmitted to Standard & Poor's Corporation, which will use the message
to include certain terms of the related Global Note in the appropriate
daily bond report published by Standard & Poor's Corporation.
Payments of Principal,
Premium, if any,
and Interest: Payments of Interest Only. Promptly
after each Regular Record Date (or as soon thereafter as such
information is determined), the Trustee will deliver to the Company and
DTC a written notice specifying by CUSIP number the amount of interest
to be paid on each Global Note on the following Interest Payment Date
(other than an Interest Payment Date coinciding with the Maturity) and
the total of such amounts. DTC will confirm the amount payable on each
Global Note on such Interest Payment Date by reference to the daily bond
reports published by Standard & Poor's Corporation. On such Interest
Payment Date, the Company will pay to the Trustee, and the Trustee in
turn will pay to DTC, such total amount of interest due (other than at
Maturity), at the times and in the manner set forth below under "Manner
of
Payment."
Payments at Maturity. On or about the
first Business Day of each month (or as soon thereafter as such
information is determined), the Trustee will deliver to the Company and
DTC a written list of principal, premium, if any, and interest to be
paid on each Global Note maturing or subject to redemption 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 The Chase Manhattan Bank, N.A.
funds available for immediate use in an amount equal to the amount
credited to the Trustee's DTC settlement account in accordance with
Settlement Procedure F.
J. The Agent will confirm the
purchase of each Book-Entry Note to the purchaser thereof either by
transmitting to the Participant to whose account such Note has been
credited a confirmation order through DTC's Participant Terminal System
or by mailing a written confirmation to such purchaser. In all cases
the Prospectus as most recently amended or supplemented (including the
applicable Pricing Supplement) must accompany or precede such
confirmation.
Settlement Procedures
Timetable: For offers accepted by the Company,
Settlement Procedures A through J shall occur no later than the
respective times (New York City time) listed below:
Settlement
Procedure
Time
A 11:00 a.m.
on the second Business Day following the
date of acceptance.
B 2:00 p.m.
on the second Business Day following the
date of acceptance.
C 5:00 p.m.
on the Business Day before the Settlement
Date.
D 9:00 a.m.
on the Settlement Date.
E
10:00 a.m. on the Settlement Date.
F-G 2:00 p.m.
on the Settlement Date.
H 4:45 p.m.
on the Settlement Date.
I-J 5:00 p.m.
on the Settlement Date.
NOTE: If a sale is to be
settled in less than four Business Days after the date of acceptance,
Settlement
Procedures A and B shall be completed as soon as practicable but no
later than 11:00 a.m., and 2:00 p.m., respectively, on the Business Day
before Settlement Date. If the Initial Interest Rate for a Floating
Rate Book-Entry Note has not been determined at the time that Settlement
Procedure A is completed, Settlement Procedures B and C shall be
completed as soon as such rate has been determined.
Settlement Procedure H is subject to
extension in accordance with any extension of Fedwire closing deadlines
and in the other events specified in the SDFS operating procedures in
effect on the Settlement Date.
If Settlement of a Book-Entry Note is
rescheduled or cancelled, the Trustee will deliver to DTC, through DTC's
Participant Terminal System, a cancellation message to such effect by no
later than 2:00 p.m., New York City time, on the Business Day
immediately preceding the scheduled Settlement Date.
Failures: If the Trustee has not entered an
SDFS deliver order with respect to a Book-Entry Note pursuant to
Settlement Procedure F (which may be evidenced by facsimile
transmission), the Trustee, at the Company's direction, shall deliver to
DTC, through DTC's Participant Terminal System, as soon as practicable,
but no later than 2:00 p.m. on any business day, a withdrawal message
instructing DTC to debit such Book-Entry Note to the participant account
of the Trustee maintained at DTC. DTC will process the withdrawal
message, provided that such participant account contains a principal
amount of the Global Note representing such Book-Entry Note that is at
least equal to the
principal amount of such Book-Entry Note to be debited. If withdrawal
messages are processed with respect to all the Book-Entry Notes issued
or to be issued represented by a Global Note, the Trustee will void such
Global Note, make appropriate entries in its records and, unless
otherwise directed by the Company, destroy the Certificate. The CUSIP
number assigned to such Global Note shall, in accordance with CUSIP
Service Bureau procedures, be cancelled and not immediately reassigned.
If withdrawal messages are processed with respect to a portion of the
Book-Entry Notes represented by a Global Note, the Trustee will exchange
such Global Note for two Global Notes, one of which shall represent such
Book-Entry Notes (which shall be cancelled immediately after issuance),
and the other of which shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global Note and shall bear the
CUSIP number of the surrendered Global Note. If the purchase price for
any Book-Entry Note is not timely paid to the Participants with respect
to such Note by the beneficial purchaser (other than a Purchasing Agent)
thereof (or a person, including an indirect participant in DTC, acting
on behalf of such purchaser), such Participants and, in turn, the
related Agent may enter SDFS deliver orders through DTC's Participant
Terminal System debiting such Note free to such Agent's Participant
Account and crediting such Note free to the Participant Account of the
Trustee and shall notify the Trustee and the Company thereof.
Thereafter, the Trustee, (i) will immediately notify the Company, once
the Trustee has confirmed that such Note has been credited to its
Participant Account, and the Company shall transfer by Fedwire
(immediately available funds) to such Agent an amount equal to the price
of such Note which was previously sent by wire transfer to the account
of the Company maintained at The Chase Manhattan Bank, N.A. 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 The
Chase Manhattan Bank, N.A. 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 Vice President, Finance by
telephone or by facsimile transmission. If the Certificated Note has
been delivered to the Selling Agent on behalf of the purchaser, the
Selling Agent will immediately return the Certificated Note to the
Trustee. If funds have been advanced by the Selling Agent for the
purchase of such Note, The Chase Manhattan Bank, N.A. 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.
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.
UNDERWRITING AGREEMENT
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
c/o Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
September 7, 1995
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company") proposes to issue and sell from time to time certain of its
debt securities registered under the registration statement referred to
in Section 2(a) (the "Securities"). The Company intends to enter into
one or more Pricing Agreements (each a "Pricing Agreement") in the form
of Annex I hereto, with such additions and deletions as the parties
thereto may determine, and, subject to the terms and conditions stated
herein and therein, to issue and sell to the firms named in Schedule I
to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of the Securities specified in Schedule II to
such Pricing Agreement (with respect to such Pricing Agreement, the
"Designated Securities"), less the principal amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as provided in
Section 4 hereof and as may be specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, any Designated
Securities to be covered by Delayed Delivery Contracts being herein
sometimes referred to as "Contract Securities" and the Designated
Securities to be purchased by the Underwriters (after giving effect to
the deduction, if any, for Contract Securities) being herein sometimes
referred to as "Underwriters' Securities"). The Designated Securities
with respect to each Pricing Agreement shall be issued under an
indenture (the "Indenture") identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be made from
time to time to the Underwriters of such Securities, for whom you will
act as representatives. This Underwriting Agreement shall not be
construed as an obligation of the Company to sell any of the Securities
or as an obligation of any of the Underwriters to purchase the
Securities. The obligation of the Company to issue and sell any of the
Securities and the obligation of any of the Underwriters to purchase any
of the Securities shall be evidenced by the Pricing Agreement with
respect to the Designated Securities specified therein. Each Pricing
Agreement shall specify the aggregate principal amount of such
Designated Securities, the public offering price of such Designated
Securities, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities,
the principal amount of such Designated Securities to be purchased by
each Underwriter and whether any of such Designated Securities shall be
covered by Delayed Delivery Contracts (as defined in Section 4 hereof)
and the commission payable to the Underwriters with respect thereto and
shall set forth the date, time and manner of delivery of such Designated
Securities and payment therefor. The Pricing Agreement shall also
describe, in a manner consistent with the Indenture and the registration
statement and prospectus with respect thereto, the principal terms of
such Designated Securities. A Pricing Agreement shall be in the form of
an executed writing (which may be in counterparts), and may be evidenced
by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under
this Agreement and each Pricing Agreement shall be several and not
joint.
<PAGE>
2. Each of the Company and Sears, Roebuck and Co. ("Sears")
represents and warrants to, and agrees with, each of the Underwriters
that:
(a) A registration statement in respect of the Securities has
been filed with the Securities and Exchange Commission (the
"Commission"); such registration statement and any post-effective
amendment thereto, each in the form heretofore delivered or to be
delivered to you and, excluding exhibits to such registration statement,
but including all documents incorporated by reference in the prospectus
included therein, to you for each of the other Underwriters have been
declared effective by the Commission in such form (any preliminary
prospectus included in such registration statement being hereinafter
called a "Preliminary Prospectus;" the various parts of such
registration statement, including all exhibits thereto except Form T-1,
each as amended at the time such part became effective, being
hereinafter collectively called the "Registration Statement;" the
prospectus relating to the Securities, in the form in which it has most
recently been filed with the Commission on or prior to the date of this
Agreement, being hereinafter called the "Prospectus;" any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to include the documents, if any, incorporated by reference therein
pursuant to the applicable form under the Securities Act of 1933, as
amended (the "Act"), as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and so
incorporated by reference; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated
Securities in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of Regulation C under the Act, including any
documents incorporated by reference therein as of the date of such
filing);
(b) Except for statements in such documents which do not
constitute part of the Registration Statement or the Prospectus pursuant
to Rule 412 of Regulation C under the Act and after substituting
therefor any statements modifying or superseding such excluded
statements (i) the documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents, when they became effective or were so filed, as the case may
be, contained, in the case of documents which became effective under the
Act, an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of documents which
were filed under the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (ii) any
further documents so filed and incorporated by reference when they
become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain, in the case of documents
which become effective under the Act, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and, in the
case of documents which are filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an Underwriter
of Designated Securities through you expressly for use therein; at the
Time of Delivery (as defined in Section 4 hereof), the Indenture will be
duly qualified under, and will conform in all material respects to the
requirements of, the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"); and
(c) Except for statements in documents incorporated therein by
reference which do not constitute part of the Registration Statement or
the Prospectus pursuant to Rule 412 of Regulation C under the Act and
after substituting therefor any statements modifying or superseding such
excluded statements, the Registration Statement and the Prospectus
conformed, and any amendments or supplements thereto will, when they
become effective or are filed with the Commission, as the case may be,
conform, in all material respects to the requirements of the Act and the
Trust Indenture Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and as of the applicable filing date as
to the Prospectus, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter of Designated
Securities through you expressly for use in the Prospectus as amended or
supplemented relating to such Securities.
3. The Company represents and warrants to, and agrees with each of
the Underwriters that:
(a) Upon payment therefor as provided herein, the Securities
will have been duly and validly authorized and (assuming their due
authentication by the Trustee) will have been duly and validly issued
and will be valid outstanding obligations of the Company in accordance
with their terms, except as the same may be limited by insolvency,
bankruptcy, reorganization, or other laws relating to or affecting the
enforcement of creditors' rights or by general equity principles, and
will be entitled to the benefits of the Indenture;
(b) The issue and sale of the Securities pursuant to any Pricing
Agreement and under any Delayed Delivery Contract and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Delayed Delivery Contract will not conflict with
or result in any breach which would constitute a material default under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any of the property or assets of the Company material
to the Company pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money to which the Company
is a party or by which the Company may be bound or to which any of the
property or assets of the Company, material to the Company, is subject,
nor will such action result in any material violation of the provisions
of the Certificate of Incorporation, as amended or the By-Laws of the
Company or, to the best of its knowledge, any statute or any order, rule
or regulation applicable to the Company of any court or any Federal,
State or other regulatory authority or other governmental body having
jurisdiction over the Company, and no consent, approval, authorization
or other order of, or filing with, any court or any such regulatory
authority or other governmental body is required for the issue and sale
of the Designated Securities except as may be required under the Act,
the Exchange Act, the Trust Indenture Act and securities laws of the
various states and other jurisdictions in which the Underwriters will
offer and sell the Designated Securities; and
(c) In the event any of the Securities are purchased pursuant to
Delayed Delivery Contracts, each of such Delayed Delivery Contracts has
been duly authorized by the Company and, when duly executed and
delivered by the Company and the institutional purchaser named therein,
will constitute a valid and legally binding agreement of the Company
enforceable in accordance with its terms, except as the same may be
limited by insolvency, bankruptcy, reorganization or other laws relating
to or affecting the enforcement of creditors' rights or by general
equity principles.
4. Upon the execution of the Pricing Agreement applicable to
any Designated Securities and authorization by you of the release of the
Underwriters' Securities, the several Underwriters propose to offer the
Underwriters' Securities for sale upon the terms and conditions set
forth in the Prospectus as amended or supplemented.
The Company may specify in Schedule II to the Pricing Agreement
applicable to any Designated Securities that the Underwriters are
authorized to solicit offers to purchase Designated Securities from the
Company pursuant to delayed delivery contracts (herein called "Delayed
Delivery Contracts"), substantially in the form of Annex II attached
hereto but with such changes therein as you and the Company may
authorize or approve. If so specified, the Underwriters will endeavor
to make such arrangements, and as compensation therefor the Company will
pay to you, for the accounts of the Underwriters, at the Time of
Delivery (as defined in Section 5 hereof), such commission, if any, as
may be set forth in such Pricing Agreement. Delayed Delivery Contracts,
if any, are to be with institutional investors of the types mentioned
under the subcaption "Delayed Delivery Arrangements" in the Prospectus
and subject to other conditions therein set forth. The Underwriters
will not have any responsibility in respect of the validity or
performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be deducted from
the principal amount of Designated Securities to be purchased by each
Underwriter as set forth in Schedule I to the Pricing Agreement
applicable to such Designated Securities shall be, in each case, the
principal amount of Contract Securities which the Company has been
advised by you have been attributed to such Underwriter, provided that,
if the Company has not been so advised, the amount of Contract
Securities to be so deducted shall be, in each case, that proportion of
Contract Securities which the principal amount of Designated Securities
to be purchased by such Underwriter under such Pricing Agreement bears
to the total principal amount of the Designated Securities (rounded as
you may determine to the nearest $1,000 principal amount). The total
principal amount of Underwriters' Securities to be purchased by all the
Underwriters pursuant to such Pricing Agreement shall be the total
principal amount of Designated Securities set forth in Schedule I to
such Pricing Agreement less the principal amount of the Contract
Securities. The Company will deliver to you not later than 3:30 p.m.,
New York time, on the third business day preceding the Time of Delivery
specified in the applicable Pricing Agreement (or such other time and
date as you and the Company may agree upon in writing) a written notice
setting forth the principal amount of Contract Securities.
The Pricing Agreement applicable to any Designated Securities may
provide that the Company and any entity acting as an underwriter with
respect to such Designated Securities may enter into a deferred pricing
agreement in the form set forth in a schedule attached to such Pricing
Agreement.
5. Underwriters' Securities to be purchased by each Underwriter
pursuant to the Pricing Agreement relating thereto, in definitive form
to the extent practicable, and in such authorized denominations and
registered in such names as you may request upon at least two business
days prior notice to the Company, shall be delivered by or on behalf of
the Company to you for the account of such Underwriter, against payment
by such Underwriter or on its behalf of the purchase price therefor, by
certified or official bank check or checks or wire transfer, as
specified in such Pricing Agreement, payable to the order of the Company
in the funds specified in such Pricing Agreement, all at the place and
time and date specified in such Pricing Agreement or at such other place
and time and date as you and the Company may agree upon in writing, such
time and date being herein called the "Time of Delivery" for such
Securities.
Concurrently with the delivery of and payment for the
Underwriters' Securities, the Company will deliver to you for the
accounts of the Underwriters payment, by certified or official bank
check or checks or wire transfer, as specified in such Pricing
Agreement, payable to the order of the party designated in the Pricing
Agreement relating to such Securities in the amount of any compensation
payable by the Company to the Underwriters in respect of any Delayed
Delivery Contracts as provided in Section 3 hereof and in the Pricing
Agreement relating to such Securities.
6. Each of the Company and Sears agrees with each of the
Underwriters of Designated Securities:
(a) To make no further amendment or any supplement to the
Registration Statement or the Prospectus as amended or supplemented
after the date of the Pricing Agreement relating to such Securities and
prior to the Time of Delivery for such Securities without first having
furnished you with a copy of the proposed form thereof and given you a
reasonable opportunity to review the same; to advise you promptly of any
such amendment or supplement after such Time of Delivery and furnish you
with copies thereof and to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company or
Sears, respectively, with the Commission pursuant to Section 13 or 14 of
the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of such Securities, and during
such same period to advise you, promptly after the Company or Sears
receives notice thereof, of the time when the Registration Statement, or
any amendment thereto, or any amended Registration Statement has become
effective or any supplement to the Prospectus or any amended Prospectus
has been filed, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Prospectus, or the
suspension of the qualification of such Securities for offering or sale
in any jurisdiction, or the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus or
for additional information; and in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
such Prospectus or suspending any such qualification, to use promptly
its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you may
reasonably request to qualify such Securities for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of such Securities, provided that in
connection therewith neither the Company nor Sears shall be required to
qualify as a foreign corporation or to file a general consent to service
of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of such Securities and
if at such time any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify you and to prepare and furnish
without charge to each Underwriter and to any dealer in securities as
many copies as you may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and
(d) To make generally available to its security holders, in
accordance with the provisions of Rule 158 under the Act or otherwise,
as soon as practicable, but in any event not later than forty-five days
after the end of the fourth full fiscal quarter (ninety days in the case
of the last fiscal quarter in any fiscal year) following the fiscal
quarter ending after the latest of (x) the effective date of the
Registration Statement, (y) the effective date of the post-effective
amendment thereto hereinafter referred to, and (z) the date of the
filing of the report hereinafter referred to, earnings statements of the
Company and Sears and its consolidated subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and covering a period
of at least twelve consecutive months beginning after the latest of (i)
the effective date of such Registration Statement, (ii) the effective
date of the post-effective amendment, if any, to such Registration
Statement (within the meaning of Rule 158) next preceding the date of
the Pricing Agreement relating to the Designated Securities and (iii)
the date of filing of the last report of the Company or Sears
incorporated by reference into the Prospectus (within the meaning of
Rule 158) next preceding the date of the Pricing Agreement relating to
the Designated Securities.
7. The Company agrees with each of the Underwriters of
Designated Securities:
(a) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including
the earlier of (i) the termination of trading restrictions for such
Designated Securities, of which termination you agree to give the
Company prompt notice confirmed in writing, and (ii) the Time of
Delivery for such Designated Securities, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which
mature more than one year after such Time of Delivery and which are
substantially similar to such Designated Securities, without your prior
written consent, which consent shall not be unreasonably withheld,
except pursuant to arrangements of which you have been advised by the
Company prior to the time of execution of such Pricing Agreement, which
advice is confirmed in writing to you by the end of the business day
following the date of such Pricing Agreement; and
(b) To pay or cause to be paid all expenses, preapproved by the
Company, incident to the performance of its obligations hereunder and
under any Pricing Agreement or any Delayed Delivery Contract, including
the cost of all qualifications of the Securities under state securities
laws (including reasonable fees of counsel to the Underwriters in
connection with such qualifications and in connection with legal
investment surveys) and the cost of printing this Agreement, any Pricing
Agreement, and any blue sky and legal investment memoranda.
8. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such Designated
Securities shall be subject, in their discretion, to the condition that
all representations and warranties and other statements of the Company
or Sears herein are, at and as of the Time of Delivery for such
Designated Securities, true and correct, the condition that each of the
Company and Sears shall have performed all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission
shall have been complied with to your reasonable satisfaction.
(b) All corporate proceedings and related matters in connection
with the organization of the Company, the validity of the Indenture and
the registration, authorization, issue, sale and delivery of the
Designated Securities shall have been satisfactory to counsel to the
Underwriters, and such counsel shall have been furnished with such
papers and information as they may reasonably have requested to enable
them to pass upon the matters referred to in this subdivision (b).
(c) Counsel to the Company and Sears shall have furnished to you
such counsel's written opinion, dated the Time of Delivery for such
Designated Securities, in form and substance satisfactory to you in your
reasonable judgment, to the effect that:
(i) Each of the Company and Sears has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its respective state of incorporation;
(ii) The authorized capital stock of the Company consists
of 500,000 shares of common stock, par value $100.00 per share, 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) In the event any of the Designated Securities are to
be purchased pursuant to Delayed Delivery Contracts, each of such
Delayed Delivery Contracts has been duly authorized, executed and
delivered on the part of the Company and, assuming such Contracts have
been duly executed and delivered by the institutional purchasers named
therein, constitutes a valid and legally binding agreement of the
Company in accordance with its terms, except as the foregoing may be
limited by insolvency, bankruptcy, reorganization or other laws relating
to or affecting the enforcement of creditors' rights or by general
equity principles;
(vi) The issue and sale of the Designated Securities and
the compliance by the Company with all of the provisions of the
Designated Securities, the Indenture, each of the Delayed Delivery
Contracts, if any, this Agreement and the Pricing Agreement with respect
to the Designated Securities will not (a) conflict with or result in any
breach which would constitute a material default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any of
the property or assets of the Company material to the Company, pursuant
to the terms of, any indenture, loan agreement or other agreement or
instrument for borrowed money known to such counsel to which the Company
is a party or by which the Company may be bound or to which any of the
property or assets of the Company material to the Company is subject,
(b) result in any material violation of the provisions of the
Certificate of Incorporation, as amended or the By-Laws of the Company
or (c) to the best of the knowledge of such counsel, result in any
material violation of any statute or any order, rule or regulation
applicable to the Company of any court or any Federal, State or other
regulatory authority or other governmental body having jurisdiction over
the Company, other than the Act, the Exchange Act, the Trust Indenture
Act and the rules and regulations pursuant to each such act, and other
than the securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Designated Securities;
and, to the best knowledge of such counsel, no consent, approval,
authorization or other order of, or filing with, any court or any such
regulatory authority or other governmental body is required for the
issue and sale of the Designated Securities except as may be required
under the Act, the Exchange Act, the Trust Indenture Act and securities
laws of the various states or other jurisdictions which are applicable
to the issue and sale of the Designated Securities;
(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) The Indenture has been duly authorized, executed
and delivered on the part of the Company and, as to the Company, is a
valid and binding instrument in accordance with its terms except as the
foregoing may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
or by general equity principles, and has been qualified under the Trust
Indenture Act; the Underwriters' Securities have been duly authorized
and (assuming their due authentication by the Trustee) have been duly
executed, issued and delivered on the part of the Company and constitute
valid and binding obligations of the Company in accordance with their
terms, entitled to the benefits of the Indenture, except as the same may
be limited by insolvency, bankruptcy, reorganization or other laws
relating to or affecting the enforcement of creditors' rights or by
general equity principles; the Contract Securities, if any, when
executed, authenticated, issued and delivered pursuant to the Indenture
and Delayed Delivery Contracts, will constitute valid and binding
obligations of the Company in accordance with their terms, entitled to
the benefits of the Indenture, except as the foregoing may be limited by
insolvency, bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general equity
principles;
(ix) 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;
(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 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;
(xi) 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
(xii) 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 Morgan
Stanley & Co. Incorporated, representing you.
All statements, requests, notices and agreements hereunder shall
be in writing or by telegram if promptly confirmed in writing and if to
the Underwriters shall be sufficient in all respects, if delivered or
sent by registered mail to you as the Representatives at 85 Broad
Street, New York, New York 10004, Attention: New Issues, Syndicate Desk;
and if to the Company shall be sufficient in all respects if delivered
or sent by registered mail to the Company at 3711 Kennett Pike,
Greenville, Delaware 19807, Attention: Richard F. Kotz, Secretary; and
if to Sears shall be sufficient in all respects if delivered or sent by
registered mail to Sears at Sears Tower, Chicago, Illinois 60684,
Attention: David Shute, Senior Vice President, General Counsel and
Secretary.
14. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Company,
Sears and, to the extent provided in Section 9 and Section 11 hereof,
the officers and directors of the Company and Sears and each person who
controls the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement or
any such Pricing Agreement. No purchaser of any of the Securities from
any Underwriter shall be deemed a successor or assign by reason merely
of such purchase.
15. Time shall be of the essence of each Pricing Agreement.
16. This Agreement and each Pricing Agreement shall be governed
by, and construed in accordance with, the internal laws of the State of
New York.
17. This Agreement and each Pricing Agreement may be executed by
any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all
such respective counterparts shall together constitute one and the same
instrument.
<PAGE>
If the foregoing is in accordance with your understanding, please
sign and return two counterparts hereof.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By: Keith E. Trost
SEARS, ROEBUCK AND CO.
By: Larry R. Raymond
Accepted as of the date hereof:
Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: W. Eric Carlborg
Managing Director
J.P. MORGAN SECURITIES INC.
By: T. Kelley Millet
MORGAN STANLEY & CO. INCORPORATED
By: Harold J. Hendershot III
Principal
SALOMON BROTHERS INC
By: Anne Clarke Wolff
Vice President
<PAGE>
ANNEX I
PRICING AGREEMENT
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
As [Representatives of] the several
Underwriters named in Schedule I hereto
c/o Morgan Stanley & Co. Incorporated
1221 Avenue of the Americas
New York, New York 10020
,199
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company"), proposes subject to the terms and conditions stated herein
and in the Underwriting Agreement, dated , 199 (the
"Underwriting Agreement"), executed between the Company and Sears,
Roebuck and Co. ("Sears"), on the one hand, and
on the other hand, to issue and sell to the Underwriters named in
Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in
full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and, except where otherwise
specified, as of the date of this Pricing Agreement, except that each
representation and warranty with respect to the Prospectus in Sections 2
and 3 of the Underwriting Agreement shall be deemed to be a
representation and warranty as of the date of the Underwriting Agreement
in relation to the Prospectus (as therein defined) and also a
representation and warranty as of the date of this Pricing Agreement in
relation to the Prospectus as amended or supplemented. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used
herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities,
in the form heretofore delivered to you is now proposed to be filed with
the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the
Company, at the time and place and at a purchase price to the
Underwriters set forth in Schedule II hereto, the principal amount of
Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto, less the principal amount of Designated Securities
covered by Delayed Delivery Contracts, if any, as may be specified in
such Schedule II.
If the foregoing is in accordance with your understanding, please
sign and return to us two counterparts hereof, and upon acceptance
hereof by you on behalf of each of the Underwriters, this letter and
such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding
agreement between the Company, Sears and each of the Underwriters. It
is understood that your acceptance of this letter on behalf of each of
the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be supplied to the
Company upon request. You represent that you are authorized on behalf
of yourselves and on behalf of each of the other Underwriters named in
Schedule I hereto to enter into this Agreement.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted as of the date hereof:
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By:
Managing Director
J.P. MORGAN SECURITIES INC.
By:
MORGAN STANLEY & CO. INCORPORATED
By:
Principal
SALOMON BROTHERS INC
By:
Vice President
On behalf of each of the Underwriters<PAGE>
SCHEDULE I
Principal
Amount of
Designated
Securities
to
Underwriter be purchased
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
Total $
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate principal amount:
$
Price to Public:
% of the principal amount of
the Designated Securities, plus accrued
interest from to the Time of
Delivery [and accrued amortization,
if any, from to the Time
of Delivery]
Purchase Price by Underwriters:
% of the principal amount of the
Designated Securities, plus accrued
interest from to the Time of
Delivery [and accrued amortization,
if any, from to the Time
of Delivery]
Indenture:
Indenture, dated , between
the Company and , as Trustee
Form of Designated Securities:
[Certificated form only][Global form only]
Maturity:*
Interest Rate:*
[ %] [Zero Coupon]
Interest Payment dates:*
[months and dates]
Redemption Provisions:*
[No provision for redemption]
[The Designated Securities may be redeemed,
otherwise than through the sinking fund,
in whole or in part at the option of the
Company, in the amount of $ or an
integral multiple thereof,
[FN]
* The terms of an attached form of security may be incorporated by
reference.
[/FN]
[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:1
[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
[FN]
1 The terms of an attached form of security may be incorporated by
reference.
[/FN]
Funds in which payment by Underwriters to Company to be made:
[ ] Clearing House Funds
[ ] Same day funds
Method of Payment:
[Certified or official bank check or checks]
[Wire transfer to ]
Closing Location:
Delayed Delivery:
[None] [Underwriters are authorized to solicit Delayed Delivery
Contracts relating to a maximum of $ in aggregate principal
amount of the Designated Securities. Underwriters' commission shall be
% of the principal amount of Designated Securities for which Delayed
Delivery Contracts have been entered into. Such commission shall be
payable to the order of .]
[Certified or official bank check or checks]
[Wire transfer to ]
Counsel:
To the Company, [ ]
To Sears, [ ]
To the Underwriters, [ ]
[Other Terms]:2
[FN]
2. The terms of an attached form of security may be incorporated by
reference.
[/FN]<PAGE>
ANNEX II
DELAYED DELIVERY CONTRACT
SEARS ROEBUCK ACCEPTANCE CORP.,
c/o
Attention:
,199
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from Sears Roebuck
Acceptance Corp. (hereinafter called the "Company"), and the Company
agrees to sell to the undersigned,
$
principal amount of the Company's [Title of Designated Securities]
(hereinafter called the "Designated Securities"), offered by the
Company's Prospectus dated , 199 as amended or supplemented, receipt
of a copy of which is hereby acknowledged, at a purchase price of %
of the principal amount thereof, plus accrued interest from the date
from which interest accrues as set forth below, and on the further terms
and conditions set forth in this contract.
[The undersigned will purchase the Designated Securities from
the
Company on , 199 (the "Delivery Date") and interest on the
Designated Securities so purchased will accrue from , 199 .]
[The undersigned will purchase the Designated Securities from
the
Company on the delivery date or dates and in the principal amount or
amounts set forth below:
Delivery Date Principal Date from Which
Amount Interest Accrues
, 199 $ , 199
, 199 $ , 199
Each such date on which Designated Securities are to be purchased
hereunder is hereinafter referred to as a "Delivery Date".]
Payment for the Designated Securities which the undersigned has
agreed to purchase on [the] [each] Delivery Date shall be made to the
Company or its order by [certified or official bank check] [in New York
Clearing House funds at the office of Sears Roebuck Acceptance Corp.,
Greenville, Delaware] [or] [by wire transfer, in immediately available
funds, to a bank account specified by the Company], on [the] [such]
Delivery Date upon delivery to the undersigned of the Designated
Securities then to be purchased by the undersigned in definitive fully
registered form and in such denominations and registered in such names
as the undersigned may designate by written or telegraphic communication
addressed to the Company not less than five full business days prior to
[the] [such] Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Designated Securities on [the] [each] Delivery Date shall be
subject to the conditions that (a) the purchase of Designated Securities
to be made by the undersigned shall not on [the] [such] Delivery Date be
prohibited under the laws of the jurisdiction to which the undersigned
is subject and (b) the Company, on or before , 199 , shall
have sold to the several Underwriters, pursuant to the Pricing Agreement
dated , 199 with the Company and Sears, Roebuck and Co.
("Sears"), an aggregate principal amount of Designated Securities equal
to $ , minus the aggregate principal amount of Designated
Securities covered by this contract and other contracts similar to this
contract. The obligation of the undersigned to take delivery of and
make payment for Designated Securities shall not be affected by the
failure of any purchaser to take delivery of and make payment for
Designated Securities pursuant to other contracts similar to this
contract.
Promptly after completion of the sale to the Underwriters the
Company will mail or deliver to the undersigned at its address set forth
below notice to such effect, accompanied by a copy of the Opinion of
Counsel for the Company and Sears delivered to the Underwriters in
connection therewith.
The undersigned represents and warrants that, as of the date of
this contract, the undersigned is not prohibited from purchasing the
Designated Securities hereby agreed to be purchased by it under the laws
of the jurisdiction to which the undersigned is subject.
This contract will inure to the benefit of and be binding upon
the
parties hereto and their respective successors, but will not be
assignable by either party hereto without written consent of the other.
This contract may be executed by either of the parties hereto in
any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and
the same instrument.
This contract shall be governed by, and construed in accordance
with, the internal laws of the State of New York.
It is understood that the acceptance by the Company of any
Delayed
Delivery Contract (including this contract) is in the Company's sole
discretion and that, without limiting the foregoing, acceptances of such
contracts need not be on a first-come, first-served basis. If this
contract is acceptable to the Company, it is requested that the Company
sign the form of acceptance below and mail or deliver one of the
counterparts hereof to the undersigned at its address set forth below.
This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered by the
Company.
Yours very truly,
By
(Signature)
(Name and
Title)
(Address)
Accepted, ,199
in Greenville, Delaware
SEARS ROEBUCK ACCEPTANCE CORP.
By
(Title)
PRICING AGREEMENT
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
As the several Underwriters named
in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
September 7, 1995
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 September 7,
1995 (the "Underwriting Agreement"), executed between the
Company and Sears, Roebuck and Co. ("Sears"), on the one hand,
and Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Brothers Inc on the other hand, to
issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities"). Each of the provisions of
the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and
warranties set forth therein shall be deemed to have been made
at and, except where otherwise specified, as of the date of this
Pricing Agreement, except that each representation and warranty
with respect to the Prospectus in Sections 2 and 3 of the
Underwriting Agreement shall be deemed to be a representation
and warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined) and also a
representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or
supplemented. Unless otherwise defined herein, terms defined in
the Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated
Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the
Company agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, at the time and place and at a
purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto, less
the principal amount of Designated Securities covered by Delayed
Delivery Contracts, if any, as may be specified in such Schedule
II.
If the foregoing is in accordance with your understanding,
please sign and return two counterparts hereof.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By: /S/ Keith E. Trost
SEARS, ROEBUCK AND CO.
By: /S/ Larry R. Raymond
Accepted as of the date hereof:
/S/ Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:/S/W. Eric Carlborg
Managing Director
J.P. MORGAN SECURITIES INC.
By:/S/ T. Kelley Millet
MORGAN STANLEY & CO. INCORPORATED
By: /S/ Harold J. Hendershott III
Principal
SALOMON BROTHERS INC
By: /S/ Anne Clarke Wolff
Vice President
SCHEDULE I
Underwriter Principal Amount of Designated
Securities to be purchased
Goldman, Sachs & Co. $ 50,000,000
Merrill Lynch, Pierce, Fenner
& Smith Incorporated 50,000,000
J.P. Morgan Securities Inc. 50,000,000
Morgan Stanley & Co. Incorporated 50,000,000
Salomon Brothers Inc 50,000,000
Total $250,000,000
SCHEDULE II
Title of Designated Securities:
6-3/4% Notes due September 15, 2005
Aggregate principal amount:
$250,000,000
Price to Public:
99.927% of the principal amount of the Designated Securities, plus
accrued interest from September 12, 1995 to the Time of Delivery
Purchase Price by Underwriters:
99.277% of the principal amount of the
Designated Securities, plus accrued
interest from September 12, 1995 to the Time of
Delivery
Indenture:
Indenture, dated as of May 15, 1995,
between the Company and The Chase Manhattan
Bank, N.A., as Trustee
Maturity:1
Interest Rate:1
Interest Payment dates:1
Redemption Provisions:1
Sinking Fund Provisions:
None
Time of Delivery:
9:00 A.M., Chicago time, September 12, 1995
Funds in which payment by Underwriters to Company to be made:
Same day funds
Method of Payment:
Wire transfer to The Chase Manhattan Bank, N.A., for the
Account of Sears Roebuck Acceptance
Corp., Account No. 900-9000317
Closing Location:
Hoffman Estates, Illinois and Delaware<PAGE>
Delayed Delivery:
None
Counsel:
To the Company and Sears, Robert J. Pence, Senior Counsel
To the Underwriters, Wachtell, Lipton, Rosen & Katz
<PAGE>
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
6-3/4% Note due September 15, 2005
6-3/4% 6-3/4%
Due 2005 Due 2005
Sears Roebuck Acceptance Corp., a corporation organized and
existing under the laws of the State of Delaware (hereinafter
called the "Company"), for value received, hereby promises to
pay to , or registered assigns,
the principal sum of Dollars upon
presentation and surrender of this Note, on the fifteenth day of
September, 2005, at the office or agency of the Company in the
Borough of Manhattan in The City of New York or, at the option
of the holder hereof, such office or agency, if any, maintained
by the Company 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, in
such coin or currency of the United States of America as at the
time of payment is legal tender for public and private debts,
and to pay interest on said principal sum at the rate of 6-3/4%
per annum, 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 or at either of such
offices or agencies, in like coin or currency, from the March 15
or September 15, as the case may be, next preceding the date
hereof to which interest has been paid on the Notes referred to
on the reverse hereof (unless the date hereof is the date to
which interest has been paid on such Notes, in which case from
the date hereof, or unless the date hereof is prior to March 15,
1996, in which case from September 12, 1995), semiannually,
commencing on March 15, 1996, on March 15 and September 15,
until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if this Note is
dated after any March 1 and before the following March 15, or
after any September 1 and before the following September 15,
then this Note shall bear interest from such following March 15
or September 15, provided, however, that if the Company shall
default in the payment of interest due on such following March
15 or September 15, this Note shall bear interest from the next
preceding March 15 or September 15 to which interest has been
paid on such Notes, or if no interest has been paid on such
Notes, then from September 12, 1995. The interest so payable on
any March 15 or September 15 will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof, be
paid to the person in whose name this Note is registered at the
close of business on the March 1 prior to such March 15 or the
September 1 prior to such September 15. Any such interest not
so punctually paid or duly provided for shall forthwith cease to
be payable to the registered holder on such Interest Payment
Date, and may be paid to the Person in whose name this Note 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 of which shall be given to Noteholders not less
than 10 days prior to such Special Record Date, or may be paid,
at any time in any other lawful manner, all as more fully
provided in such Indenture.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, and such further provisions
shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof or any indenture
supplemental thereto, or become valid or obligatory for any
purpose, until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under such
Indenture.<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: ........................................
Sears Roebuck Acceptance Corp.
By _______________________________________
President
By _______________________________________
Vice President, Finance and
Assistant Secretary
[Corporate Seal]
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities of the series designated and
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, N.A.
as Trustee
`
By:
Authorized Officer
[FORM OF REVERSE SIDE OF NOTE]
SEARS ROEBUCK ACCEPTANCE CORP.
6-3/4% Note due September 15, 2005
This Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Company
(hereinafter called the "Securities") of the series hereinafter
specified, unlimited in aggregate principal amount, all issued
or to be issued under or pursuant to an indenture dated as of
May 15, 1995, executed between the Company and THE CHASE
MANAHATTAN BANK, N.A., as Trustee; to which indenture and all
indentures supplemental thereto (herein collectively called the
"Indenture") reference is hereby made for a specification of the
rights and limitation of rights thereunder of the Holders of the
Securities, the rights and obligations thereunder of the Company
and the rights, duties and immunities thereunder of the Trustee.
The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if
any) at different rates, may be subject to different redemption
provisions (if any), may be subject to different sinking,
purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary
as in the Indenture provided. This Note is one of a series
designated as the "6-3/4% Notes due September 15, 2005" of the
Company, limited in aggregate principal amount to $250,000,000
(hereinafter referred to as the "Notes"). All terms used in
this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
In case a default, as defined in the Indenture, shall occur and be
continuing with respect to the Notes, the principal amount of
all Notes then outstanding under the Indenture may be declared
or may become due and payable upon the conditions and in the
manner and with the effect provided in the Indenture. The
Indenture provides that such declaration may in certain events
be annulled by the Holders of a majority in principal amount of
the Notes outstanding.
To the extent permitted by, and as provided in, the Indenture,
indentures supplemental thereto may be entered into with the
consent of the Company and with the consent of the Holders of
not less than a majority in principal amount of the outstanding
Securities (as defined in the Indenture) of each series to be
affected; provided, however, that no such supplemental indenture
shall (i) change the Stated Maturity of the principal of (and
premium, if any, on), or the interest on, any Security, or
reduce the principal amount of (and 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 of the Indenture 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.
The Indenture also provides that the Holders of a majority in
principal amount of the Securities of any series then
outstanding may waive any past default under the Indenture and
its consequences, except a default in the payment of the
principal of or interest or premium, if any, on any of the
Securities.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the
respective times, at the rate, and in the currency, herein
prescribed.
This Note is transferable by the registered Holder hereof or by
his attorney duly authorized in writing at the office or agency
of the Company in the Borough of Manhattan of The City of New
York or, at the option of the Holder hereof such office or
agency, if any, maintained by the Company 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, without charge except for any tax or other
governmental charge imposed in relation thereto, but only in the
manner and subject to the limitations provided in the Indenture
and upon surrender of this Note. Upon any such transfer a Note
or Notes of authorized denominations for a like aggregate
principal amount and bearing a number not contemporaneously
outstanding will be issued in exchange herefor.
The Notes are issuable only as registered Notes without
coupons, in denominations of $1,000 and any multiple of $1,000.
In the manner and subject to the limitations provided in the
Indenture, Notes are exchangeable, without charge except for any
tax or other governmental charge imposed in relation thereto,
for other Notes of authorized denominations for a like aggregate
principal amount, at the office or agency of the Company in the
Borough of Manhattan of The City of New York or, at the option
of the Holder hereon, such office or agency, if any, maintained
by the Company 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.
The Company, the Trustee, any Authenticating Agent, any paying
agent and any Security registrar may deem and treat the
registered Holder hereof as the absolute owner hereof (whether
or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon by anyone other
than the Company or any Security registrar) for the purpose of
receiving payment of or on account of the principal hereof and
interest hereon and for all other purposes, and neither the
Company, the Trustee, an Authenticating Agent, a paying agent
nor Security registrar shall be affected by any notice to the
contrary. All such payments shall be valid and effectual to
satisfy and discharge the liability upon this Note to the extent
of the sum or sums so paid.
No recourse shall be had for the payment of the principal of or
the interest on this Note or for any claim based hereon or
otherwise in any manner in respect hereof, or in respect of the
Indenture, against any incorporator, shareholder, officer or
director, past, present or future, of the Company or of any
predecessor or successor corporation, whether by virtue of any
constitutional provision or statute or rule of law, or by the
enforcement of any assessment or penalty or in any other manner,
all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue
hereof. In the event of any sale or transfer of its assets and
liabilities substantially as an entirety to a successor
corporation, the predecessor corporation may be dissolved and
liquidated as more fully set forth in the Indenture.
1 Incorporated by reference to attached form of security.
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
6-1/2% Note due June 15, 2000
6-1/2% 6-1/2%
Due 2000 Due 2000
Sears Roebuck Acceptance Corp., a corporation organized and
existing under the laws of the State of Delaware (hereinafter called the
"Company"), for value received, hereby promises to pay to
, or registered assigns, the principal sum of
Dollars upon presentation and surrender of this Note, on the
fifteenth day of June, 2000, at the office or agency of the Company in
the Borough of Manhattan in The City of New York or, at the option of
the holder hereof, such office or agency, if any, maintained by the
Company 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, in such coin or currency of the United
States of America as at the time of payment is legal tender for public
and private debts, and to pay interest on said principal sum at the rate
of 6-1/2% per annum, 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 or at either of such offices or
agencies, in like coin or currency, from the June 15 or December 15, as
the case may be, next preceding the date hereof to which interest has
been paid on the Notes referred to on the reverse hereof (unless the
date hereof is the date to which interest has been paid on such Notes,
in which case from the date hereof, or unless the date hereof is prior
to December 15, 1995, in which case from June 13, 1995), semiannually,
commencing on December 15, 1995, on June 15 and December 15, until
payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if this Note is dated after any June 1
and before the following June 15, or after any December 1 and before the
following December 15, then this Note shall bear interest from such
following June 15 or December 15, provided, however, that if the Company
shall default in the payment of interest due on such following June 15
or December 15, this Note shall bear interest from the next preceding
June 15 or December 15 to which interest has been paid on such Notes, or
if no interest has been paid on such Notes, then from June 13, 1995.
The interest so payable on any June 15 or December 15 will, subject to
certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Note is registered at
the close of business on the June 1 prior to such June 15 or the
December 1 prior to such December 15. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable
to the registered holder on such Interest Payment Date, and may be paid
to the Person in whose name this Note 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 of which shall be given to
Noteholders not less than 10 days prior to such Special Record Date, or
may be paid, at any time in any other lawful manner, all as more fully
provided in such Indenture.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, and such further provisions shall for
all purposes have the same effect as though fully set forth at this
place.
This Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof or any indenture supplemental thereto,
or become valid or obligatory for any purpose, until the certificate of
authentication hereon shall have been signed by or on behalf of the
Trustee under such Indenture.<PAGE>
IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its corporate seal.
Dated: ........................................
Sears Roebuck Acceptance Corp.
By _______________________________________
President
By _______________________________________
Vice President, Finance and
Assistant Secretary
[Corporate Seal]
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities of the series designated and
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, N.A, as Trustee
By _______________________________________
Authorized Officer
[FORM OF REVERSE SIDE OF NOTE]
SEARS ROEBUCK ACCEPTANCE CORP.
6-1/2% Note due June 15, 2000
This Note is one of a duly authorized issue of debentures, notes,
bonds or other evidences of indebtedness of the Company (hereinafter
called the "Securities") of the series hereinafter specified, unlimited
in aggregate principal amount, all issued or to be issued under or
pursuant to an indenture dated as of May 15, 1995, executed between the
Company and THE CHASE MANAHATTAN BANK, N.A., as Trustee; to which
indenture and all indentures supplemental thereto (herein collectively
called the "Indenture") reference is hereby made for a specification of
the rights and limitation of rights thereunder of the Holders of the
Securities, the rights and obligations thereunder of the Company and the
rights, duties and immunities thereunder of the Trustee. The Securities
may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may mature at different
times, may bear interest (if any) at different rates, may be subject to
different redemption provisions (if any), may be subject to different
sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in
the Indenture provided. This Note is one of a series designated as the
"6-1/2% Notes due June 15, 2000" of the Company, limited in aggregate
principal amount to $250,000,000 (hereinafter referred to as the
"Notes"). All terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
In case a default, as defined in the Indenture, shall occur and be
continuing with respect to the Notes, the principal amount of all Notes
then outstanding under the Indenture may be declared or may become due
and payable upon the conditions and in the manner and with the effect
provided in the Indenture. The Indenture provides that such declaration
may in certain events be annulled by the Holders of a majority in
principal amount of the Notes outstanding.
To the extent permitted by, and as provided in, the Indenture,
indentures supplemental thereto may be entered into with the consent of
the Company and with the consent of the Holders of not less than a
majority in principal amount of the outstanding Securities (as defined
in the Indenture) of each series to be affected; provided, however, that
no such supplemental indenture shall (i) change the Stated Maturity of
the principal of (and premium, if any, on), or the interest on, any
Security, or reduce the principal amount of (and 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 of the Indenture 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.
The Indenture also provides that the Holders of a majority in
principal amount of the Securities of any series then outstanding may
waive any past default under the Indenture and its consequences, except
a default in the payment of the principal of or interest or premium, if
any, on any of the Securities.
No reference herein to the Indenture and no provision of this Note
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, at the
rate, and in the currency, herein prescribed.
This Note is transferable by the registered Holder hereof or by
his attorney duly authorized in writing at the office or agency of the
Company in the Borough of Manhattan of The City of New York or, at the
option of the Holder hereof such office or agency, if any, maintained by
the Company 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, without charge except for any tax or
other governmental charge imposed in relation thereto, but only in the
manner and subject to the limitations provided in the Indenture and upon
surrender of this Note. Upon any such transfer a Note or Notes of
authorized denominations for a like aggregate principal amount and
bearing a number not contemporaneously outstanding will be issued in
exchange herefor.
The Notes are issuable only as registered Notes without coupons,
in denominations of $1,000 and any multiple of $1,000. In the manner
and subject to the limitations provided in the Indenture, Notes are
exchangeable, without charge except for any tax or other governmental
charge imposed in relation thereto, for other Notes of authorized
denominations for a like aggregate principal amount, at the office or
agency of the Company in the Borough of Manhattan of The City of New
York or, at the option of the Holder hereon, such office or agency, if
any, maintained by the Company 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.
The Company, the Trustee, any Authenticating Agent, any paying
agent and any Security registrar may deem and treat the registered
Holder hereof as the absolute owner hereof (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other
writing hereon by anyone other than the Company or any Security
registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest hereon and for all other purposes, and
neither the Company, the Trustee, an Authenticating Agent, a paying
agent nor Security registrar shall be affected by any notice to the
contrary. All such payments shall be valid and effectual to satisfy and
discharge the liability upon this Note to the extent of the sum or sums
so paid.
No recourse shall be had for the payment of the principal of or
the interest on this Note or for any claim based hereon or otherwise in
any manner in respect hereof, or in respect of the Indenture, against
any incorporator, shareholder, officer or director, past, present or
future, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitutional provision or statute or rule of
law, or by the enforcement of any assessment or penalty or in any other
manner, all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue hereof.
In the event of any sale or transfer of its assets and liabilities
substantially as an entirety to a successor corporation, the predecessor
corporation may be dissolved and liquidated as more fully set forth in
the Indenture.
REGISTERED SEARS ROEBUCK ACCEPTANCE CORP. REGISTERED
No. FXR- MEDIUM-TERM NOTE SERIES I CUSIP
(FIXED RATE)
Except as otherwise provided in Section 2.10 of the
Indenture, this Note 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.
Unless this Note is presented by an authorized
representative of The Depository Trust Company (55 Water
Street, New York, New York) to the Company or its agent for
registration of transfer, exchange or payment, and any Note
issued upon registration of transfer of, or in exchange for,
or in lieu of, this Note is registered in the name of Cede &
Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OF OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
ORIGINAL ISSUE DATE: REDEMPTION COMMENCEMENT DATE:
INTEREST RATE:
REDEMPTION PRICE: IF A REDEMPTION COMMENCEMENT DATE IS
SPECIFIED ABOVE, THE REDEMPTION PRICE SHALL BE % OF
THE PRINCIPAL AMOUNT OF THIS NOTE TO BE REDEEMED AND THE
REDEMPTION PRICE SHALL DECLINE AT EACH ANNIVERSARY OF THE
REDEMPTION COMMENCEMENT DATE BY % OF THE PRINCIPAL
AMOUNT OF THIS NOTE TO BE REDEEMED UNTIL THE REDEMPTION
PRICE IS 100% OF SUCH PRINCIPAL AMOUNT.
MATURITY DATE: INTEREST PAYMENT DATES:
OTHER PROVISIONS:.
Sears Roebuck Acceptance Corp., a corporation duly
organized and existing under the laws of the State of Delaware
(herein referred to as the "Company", which term includes any
successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
or registered assigns, upon presentation and surrender of this
Note, on the Maturity Date shown above (except to the extent
redeemed prior to the Maturity Date) at the office or agency
of the Company in the Borough of Manhattan of The City of New
York, or, at the option of the Holder, such office or agency,
if any, maintained by the Company 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, the principal sum of
_________________ ________________________________
Principal Amount Specified Currency
and to pay interest thereon at the rate per annum shown above.
This Note will bear interest from the Original Issue Date
specified above or from the most recent Interest Payment Date
to which interest on this Note has been paid or duly provided
for. Unless otherwise specified above, interest will be
computed on the basis of a 360-day year of twelve 30-day
months.
Interest on this Note shall be payable on the Interest
Payment Dates and on the Maturity Date indicated above (or the
date of redemption), except that if this Note was originally
issued between a Regular Record Date and an Interest Payment
Date, the first payment of interest will be made on the
Interest Payment Date following the next succeeding Regular
Record Date to the registered Holder on such next succeeding
Regular Record Date. If any Interest Payment Date falls on a
day that is not a Business Day, the interest payment shall be
postponed to the next succeeding Business Day, and no interest
on such payment shall accrue for the period from and after the
Interest Payment Date. If the Maturity Date of this Note
falls on a day that is not a Business Day, the payment of
interest and principal may be made on the next succeeding
Business Day with the same force and effect as if made at
maturity, and no interest on such payment shall accrue for the
period from and after the Maturity Date.
The Regular Record Date shall be the May 1 and November
1 next preceding any May 15 or November 15 Interest Payment
Date and the date 15 calendar days prior to any other Interest
Payment Date, whether or not such date shall be a Business
Day.
"Business Day" as used herein means each Monday, Tuesday,
Wednesday, Thursday, and Friday which is not a legal holiday
for banking institutions in any of the City of Wilmington,
Delaware, the City of Chicago, The City of New York or the
city in which the principal corporate trust office of the
Trustee is located and, if this Note is denominated in a
currency other than Dollars, in
____________________________________________________________.
Principal Financial Center of Country Issuing Currency
Payments of interest with respect to any Interest Payment
Date or Maturity Date (or date of redemption) will include
interest accrued to, but excluding, such Interest Payment Date
or Maturity Date (or date of redemption).
The principal of (and premium, if any), and interest on,
this Note is payable by the Company in the Specified Currency.
Interest payable on any Interest Payment Date (other than
Defaulted Interest) shall be payable to the person who is the
registered Holder at the close of business on the immediately
preceding Regular Record Date. Interest payable upon
redemption or at maturity (other than a redemption or maturity
occurring on an Interest Payment Date) will be paid to the
same person to whom the principal amount of this Note is
payable.
Payment of principal of (and premium, if any), and
interest on, this Note on any day (if the Holder of this Note
is a Depository as defined in the Indenture referred to on the
reverse hereof or a nominee of such a Depository) will be made
in accordance with any applicable provisions of such written
agreement between the Company, the Trustee and such Depository
(or its nominee) as may be in effect from time to time or (if
the Holder of this Note holds an aggregate principal amount of
$10,000,000 or more of Notes with respect to which such
payment of principal (and premium, if any) or interest, as
applicable, is to be made on such day) will be made by wire
transfer if the Holder shall have designated in writing to the
Trustee an account with a bank located in the country issuing
the Specified Currency or such other country as shall be
satisfactory to the Company and the Trustee. If payment of
interest is to be made by wire transfer, such information must
be received by the Trustee at its corporate trust office in
the Borough of Manhattan of The City of New York on or prior
to the Regular Record Date for an Interest Payment Date. The
Trustee will, subject to applicable laws and regulations and
until it receives notice to the contrary, make such payment to
such Holder by wire transfer to the designated account. If a
payment of interest is not made in accordance with such a
written agreement or by wire transfer, payment will be made by
check. Checks for payment of interest on an Interest Payment
Date will be mailed to the Holder at the address of such
Holder appearing on the Security Register on the applicable
Regular Record Date.
To receive payment of a U.S. dollar denominated Note upon
redemption or at maturity, a Holder must make presentation and
surrender of such Note on or before the Redemption Date or
Maturity Date, as applicable. Payment (other than payment in
accordance with a written agreement between the Company, the
Trustee and a Depository (or its nominee) as set forth above)
will be made by check unless proper wire instructions are on
file with the Trustee or are received at presentment. To
receive payment of a Note denominated in a Foreign Currency
upon redemption or at maturity, a Holder must make
presentation and surrender not less than two Business Days
prior to the Redemption Date or Maturity Date, as applicable.
Upon presentation and surrender of a Note denominated in a
Foreign Currency at any time after the date two Business Days
prior to the Redemption Date or Maturity Date, as applicable,
the Company will pay the principal amount (and premium, if
any) of such Note, and any interest due upon redemption or at
maturity (unless the Redemption Date or Maturity Date is an
Interest Payment Date), two Business Days after such
presentation and surrender.
The Company will pay any administrative costs imposed by
banks in connection with sending payments by wire transfer,
but any tax, assessment or governmental charge imposed upon
payments will be borne by the Holders of the Notes in respect
of which payments are made.
Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof, and such further
provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof, or become valid
or obligatory for any purpose, until the certificate of
authentication hereon shall have been signed by or on behalf
of the Trustee under such Indenture.
IN WITNESS WHEREOF, the Company has caused this
Instrument to be duly executed under its corporate seal.
Dated: SEARS ROEBUCK ACCEPTANCE CORP.
By
CERTIFICATE OF AUTHENTICATION
This is one of the Notes President
designated and referred to in
the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, N.A.
as Trustee By
By
Authorized Signatory Vice President, Finance and
Assistant Secretary
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
Medium-Term Note Series I
This Note is one of a duly authorized issue of
debentures, notes, bonds or other evidences of indebtedness of
the Company (hereinafter called the "Securities") of the
series hereinafter specified, unlimited in aggregate principal
amount, all issued or to be issued under or pursuant to an
indenture dated as of May 15, 1995, executed between the
Company and THE CHASE MANHATTAN BANK, N.A., as Trustee; to
which indenture and all indentures supplemental thereto
(herein collectively called the "Indenture") reference is
hereby made for a specification of the rights and limitation
of rights thereunder of the Holders of the Securities, the
rights and obligations thereunder of the Company and the
rights, duties and immunities thereunder of the Trustee. The
Securities may be issued in one or more series, which
different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if
any) at different rates, may be subject to different
redemption provisions (if any), may be subject to different
covenants and defaults and may otherwise vary as in the
Indenture provided. This Note is one of a series designated
as the "Medium-Term Notes Series I" (hereinafter referred to
as the "Notes") of the Company, unlimited in aggregate
principal amount. All terms used in this Note which are
defined in the Indenture and which are not otherwise defined
in this Note shall have the meanings assigned to them in the
Indenture.
The Notes are issuable only in registered form without
coupons and will be either (a) Book-Entry Notes represented by
one or more global notes (each a "Global Note") recorded in
the book-entry system maintained by the Depository or (b)
certificated notes issued to, and registered in the names of,
the beneficial owners or their nominees ("Certificated
Notes"). Notes are issuable in minimum denominations of (i)
in the case of Notes denominated in Dollars, U.S. $1,000 and
in any larger amount in integral multiples of $1,000 and (ii)
in the case of Notes denominated in any Foreign Currency, the
equivalent in such Foreign Currency determined in accordance
with the Market Exchange Rate for such Foreign Currency on the
Business Day immediately preceding the date on which the
Company accepts an offer to purchase a Note, of U.S. $1,000
(rounded to an integral multiple of 1,000 units of the Foreign
Currency), and in any larger amount. In the manner and
subject to the limitations provided in the Indenture, the
Global Notes or Certificated Notes are exchangeable, without
charge except for any tax or other governmental charge imposed
in relation thereto, for other Notes of authorized
denominations for a like aggregate principal amount, at the
office or agency of the Company in the Borough of Manhattan of
The City of New York, or, at the option of the Holders
thereof, such office or agency, if any, maintained by the
Company 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.
Unless this Note is denominated in Dollars, in the event
that the currency in which this Note is denominated is not
available for payment at a time at which any payment is
required hereunder due to the imposition of exchange controls
or other circumstances beyond its control, the Company may, in
full satisfaction of its obligation to make such payment, make
instead a payment in an equivalent amount of Dollars,
determined in accordance with 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, and
such substituted payment of Dollars shall not constitute a
default under this Note or the Indenture.
If a Redemption Commencement Date is specified above,
this Note may be redeemed, whether or not any other Note is
concurrently redeemed, at the option of the Company, as a
whole, or from time to time in part, on any Business Day on or
after the Redemption Commencement Date and prior to the
Maturity Date, upon mailing by first-class mail, postage
prepaid, a notice of such redemption not less than 30 nor more
than 60 days prior to the Redemption Date, to the Holder of
this Note at his address appearing in the Security Register,
as provided in the Indenture (provided that, if the Holder of
this Note is a Depository or a nominee of a Depository,
notice of such redemption shall be given in accordance with
any applicable provisions of such written agreement between
the Company, the Trustee and such Depository (or its nominee)
as may be in effect from time to time), at the Redemption
Price specified on the face of this Note (expressed in
percentages of the principal amount hereof to be redeemed)
together in each case with interest accrued to the Redemption
Date (subject to the right of the Holder of record on a
Regular Record Date to receive interest due on an Interest
Payment Date). In the event of redemption of this Note in
part only, a new Note or Notes of this series, and of like
tenor, for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.<PAGE>
In case a default, as defined in the Indenture, shall occur
and be continuing with respect to the Notes, the
principal amount of all Notes then outstanding under the
Indenture may be declared or may become due and payable upon
the conditions and in the manner and with the effect provided
in the Indenture. The Indenture provides that such
declaration may in certain events be annulled by the Holders
of a majority in principal amount of the Notes outstanding.
To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or
of any indenture supplemental thereto, and of the rights and
obligations of the Company and the Holders of the Notes, may
be made with the consent of the Company by the affirmative
vote or consent of the Holders of not less than a majority in
principal amount of the Securities then outstanding (as
defined in the Indenture) of each series to be affected,
evidenced as in the Indenture provided; provided, however,
that no such modification or alteration shall (i) change the
stated maturity of the principal of (and premium, if any), or
interest on, any Security, or reduce the principal amount of
(and premium, if any), 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 Security 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 of the Indenture without the consent
of the Holder of each outstanding Security so affected, or
(ii) reduce the percentage of Securities, the vote or consent
of the Holders of which is required for such modifications and
alterations, without the consent of the Holders of all
Securities affected. The Indenture also provides that the
Holders of a majority in principal amount of the Securities of
any series then outstanding may waive any past default with
respect to Securities of such series under the Indenture and
its consequences, except a default in the payment of the
principal of (or premium, if any), or interest on, any of the
Securities.
This Note is transferable by the registered Holder hereof
or by his attorney duly authorized in writing at the office or
agency of the Company in the Borough of Manhattan of The City
of New York or, at the option of the Holder hereof, such
office or agency, if any, maintained by the Company 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, without charge except for
any tax, assessment or other governmental charge imposed in
relation thereto, but only in the manner and subject to the
limitations provided in the Indenture and upon surrender of
this Note. Upon any such transfer a Note or Notes of
authorized denominations for a like aggregate principal amount
and bearing a number not contemporaneously outstanding will be
issued in exchange herefor.
The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the
registered Holder hereof as the absolute owner hereof (whether
or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon by anyone other
than the Company or any Security registrar) for the purpose of
receiving payment of or on account of the principal hereof
(and premium, if any), and interest hereon, and for all other
purposes, and neither the Company, the Trustee, an
Authenticating Agent, a paying agent nor the Security
registrar shall be affected by any notice to the contrary.
All such payments shall be valid and effectual to satisfy and
discharge the liability upon this Note to the extent of the
sum or sums so paid.
No recourse shall be had for the payment of the principal
of (or premium, if any), or interest on, this Note or for any
claim based hereon or otherwise in any manner in respect
hereof, or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present
or future, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitutional provision
or statute or rule of law, or by the enforcement of any
assessment or penalty or in any other manner, all such
liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the
issue hereof. In the event of any sale or transfer of its
assets and liabilities substantially as an entirety to a
successor corporation, the predecessor corporation may be
dissolved and liquidated as more fully set forth in the
Indenture.
All Dollar amounts used in or resulting from calculations
referred to in this Note shall be rounded to the nearest cent
(with one half cent being rounded upwards).
This Note shall be governed by, and construed in
accordance with, the internal laws of the State of Delaware.<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
_______________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
____________________________________________________________
(Print or type assignee's name, address and zip code)
____________________________________________________________
____________________________________________________________
____________________________________________________________
and irrevocably appoint
____________________________________________________agent
to transfer this Note on the books of the Company. The agent
may substitute another to act for him.
Date _______________ Your signature _____________________
____________________________________________________________
(Sign exactly as your name appears on the other side of this
Note. The signature to this assignment must be guaranteed by
a commercial bank or trust company having its principal office
or a correspondent in The City of New York or by a member of
The New York Stock Exchange.
REGISTERED SEARS ROEBUCK ACCEPTANCE CORP. REGISTERED
No. FLR- MEDIUM-TERM NOTE SERIES I CUSIP
(FLOATING RATE)
Except as otherwise provided in Section 2.10 of the
Indenture, this Note 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.
Unless this Note is presented by an authorized
representative of The Depository Trust Company (55 Water
Street, New York, New York) to the Company or its agent for
registration of transfer, exchange or payment, and any Note
issued upon registration of transfer of, or in exchange for,
or in lieu of, this Note is registered in the name of Cede &
Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any
payment hereon is made to Cede & Co. ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner herof, Cede & Co.,
has an interest herein.
ORIGINAL ISSUE DATE: MATURITY DATE:
INITIAL INTEREST RATE: MAXIMUM RATE:
INDEX MATURITY: MINIMUM RATE:
SPREAD (plus or minus): CALCULATION AGENT:
SPREAD MULTIPLIER: REDEMPTION COMMENCEMENT DATE:
INTEREST RATE BASIS: DESIGNATED CMT MATURITY INDEX:
INTEREST PAYMENT DATES: DESIGNATED CMT TELERATE PAGE:
INTEREST RESET DATES:
REDEMPTION PRICE: IF A REDEMPTION COMMENCEMENT DATE IS
SPECIFIED ABOVE, THE REDEMPTION PRICE SHALL BE % OF THE
PRINCIPAL AMOUNT OF THIS NOTE TO BE REDEEMED AND THE
REDEMPTION PRICE SHALL DECLINE AT EACH ANNIVERSARY OF THE
REDEMPTION COMMENCEMENT DATE BY % OF THE PRINCIPAL AMOUNT
OF THIS NOTE TO BE REDEEMED UNTIL THE REDEMPTION PRICE IS %
OF SUCH PRINCIPAL AMOUNT.
OTHER PROVISIONS:
Sears Roebuck Acceptance Corp., a corporation duly
organized and existing under the laws of the State of New
York (herein referred to as the "Company", which term
includes any successor corporation under the indenture
hereinafter referred to), for value received, hereby
promises to pay to
or registered assigns, upon presentation and surrender of
this Note on the Maturity Date shown above (except to the
extent redeemed prior to the Maturity Date) at the office or
agency of the Company in the Borough of Manhattan of The
City of New York, or, at the option of the Holder, such
office or agency, if any, maintained by the Company 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, the principal sum of
____________________________ ____________________________
Principal Amount Specified Currency
and to pay interest thereon at the rate per annum equal to
the Initial Interest Rate shown above until the first
Interest Reset Date shown above and thereafter at the rate
determined in accordance with the provisions on the reverse
hereof depending on the Interest Rate Basis shown above.
This Note will bear interest from the Original Issue
Date specified above or from the most recent Interest
Payment Date to which interest on this Note has been paid or
duly provided for.
Interest on this Note shall be payable on the Interest
Payment Dates and on the Maturity Date indicated above (or
the date of redemption), except that if this Note was
originally issued between a Regular Record Date and an
Interest Payment Date, the first payment of interest will be
made on the Interest Payment Date following the next
succeeding Regular Record Date to the registered Holder on
such next succeeding Regular Record Date. If any Interest
Payment Date would fall on a day that is not a Business Day,
such Interest Payment Date shall be the next succeeding
Business Day (or, if the Interest Rate Basis on this Note is
LIBOR, if such day falls in the next calendar month, the
next preceding Business Day). If the Maturity Date of this
Note falls on a day that is not a Business Day, the payment
of interest and principal may be made on the next succeeding
Business Day with the same force and effect as if made at
maturity, and no interest on such payment shall accrue for
the period from and after the Maturity Date.
The Regular Record Date shall be the date 15 calendar
days prior to each Interest Payment Date, whether or not
such date shall be a Business Day.
"Business Day" as used herein means each Monday,
Tuesday, Wednesday, Thursday, and Friday which is (a) not a
legal holiday for banking institutions in any of the City of
Wilmington, Delaware, the City of Chicago, The City of New
York or the city in which the principal corporate trust
office of the Trustee is located, and (b) if this Note is
denominated in a currency other than Dollars, any such day
that is not a legal holiday for banking institutions in
,
Principal Financial Center of Country Issuing Currency
and (c) if the Interest Rate Basis with respect to this Note
is LIBOR, any such day specified in (a) on which dealings in
deposits in U.S. dollars are transacted in the London
interbank market.
The principal of (and premium, if any), and interest
on, this Note is payable by the Company in the Specified
Currency. Interest payable on any Interest Payment Date
(other than Defaulted Interest) shall be payable to the
person who is the registered Holder at the close of business
on the immediately preceding Regular Record Date. Interest
payable upon redemption or at maturity (other than a
redemption or maturity occurring on an Interest Payment
Date) will be paid to the same person to whom the principal
amount of this Note is payable.
Payment of principal of (and premium, if any), and
interest on, this Note (if the Holder of this Note is a
Depository as defined in the Indenture referred to on the
reverse hereof or a nominee of such a Depository) will be
made in accordance with any applicable provisions of such
written agreement between the Company, the Trustee and such
Depository (or its nominee) as may be in effect from time to
time or (if the Holder of this Note holds an aggregate
principal amount of $10,000,000 or more of Notes with
respect to which such payment of principal (and premium, if
any) or interest, as applicable, is to be made on such day)
will be made by wire transfer if the Holder shall have
designated in writing to the Trustee an account with a bank
located in the country issuing the Specified Currency or
such other country as shall be satisfactory to the Company
and the Trustee. If payment of interest is to be made by
wire transfer, such information must be received by the
Trustee at its corporate trust office in the Borough of
Manhattan of The City of New York on or prior to the Regular
Record Date for an Interest Payment Date. The Trustee will,
subject to applicable laws and regulations and until it
receives notice to the contrary, make such payment to such
Holder by wire transfer to the designated account. If a
payment of interest is not made in accordance with such a
written agreement or by wire transfer, payment will be made
by check. Checks for payment of interest on an Interest
Payment Date will be mailed to the Holder at the address of
such Holder appearing on the Security Register on the
applicable Regular Record Date.
To receive payment of a U.S. dollar denominated Note
upon redemption or at maturity, a Holder must make
presentation and surrender of such Note on or before the
Redemption Date or Maturity Date, as applicable. Payment
(other than payment in accordance with a written agreement
between the Company, the Trustee and a Depository (or its
nominee) as set forth above) will be made by check unless
proper wire instructions are on file with the Trustee or are
received at presentment. To receive payment of a Note
denominated in a Foreign Currency upon redemption or at
maturity, a Holder must make presentation and surrender not
less than two Business Days prior to the Redemption Date or
Maturity Date, as applicable. Upon presentation and
surrender of a Note denominated in a Foreign Currency at any
time after the date two Business Days prior to the
Redemption Date or Maturity Date, as applicable, the Company
will pay the principal amount (and premium, if any) of such
Note, and any interest due upon redemption or at maturity
(unless the Redemption Date or Maturity Date is an Interest
Payment Date), two Business Days after such presentation and
surrender.
The Company will pay any administrative costs imposed
by banks in connection with sending payments by wire
transfer, but any tax, assessment or governmental charge
imposed upon payments will be borne by the Holders of the
Notes in respect of which payments are made.
Reference is hereby made to the further provisions of
this Note set forth on the reverse hereof, and such further
provisions shall for all proposes have the same effect as
though fully set forth at this place.
This Note shall not be entitled to any benefit under
the Indenture referred to on the reverse hereof, or become
valid or obligatory for any purpose, until the certificate
of authentication hereon shall have been signed by or on
behalf of the Trustee under such Indenture.
IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.
Dated: SEARS ROEBUCK ACCEPTANCE CORP.
CERTIFICATE OF AUTHENTICATION
This is one of the Notes
designated and referred to in By
the within-mentioned Indenture. President
THE CHASE MANHATTAN BANK, N.A.,
as Trustee By
By
Authorized Signatory Vice President,
Finance and
Assistant Secretary
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
Medium-Term Note Series I
This Note is one of a duly authorized issue of
debentures, notes, bonds or other evidences of indebtedness
of the Company (hereinafter called the "Securities") of the
series hereinafter specified, unlimited in aggregate
principal amount, all issued or to be issued under or
pursuant to an indenture dated as of May 15, 1995, executed
between the Company and THE CHASE MANHATTAN BANK, N.A., as
Trustee; to which indenture and all indentures supplemental
thereto (herein collectively called the "Indenture")
reference is hereby made for a specification of the rights
and limitation of rights thereunder of the Holders of the
Securities, the rights and obligations thereunder of the
Company and the rights, duties and immunities thereunder of
the Trustee. The Securities may be issued in one or more
series, which different series may be issued in various
aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be
subject to different redemption provisions (if any), may be
subject to different covenants and defaults and may
otherwise vary as in the Indenture provided. This Note is
one of a series designated as the "Medium-Term Notes Series
I" (hereinafter referred to as the "Notes") of the Company,
unlimited in aggregate principal amount. All terms used in
this Note which are defined in the Indenture and which are
not otherwise defined in this Note shall have the meanings
assigned to them in the Indenture.
This Note will bear interest at a rate per annum equal
to the Initial Interest Rate shown on the face hereof until
the first Interest Reset Date shown on the face hereof and
thereafter at the rate determined in accordance with the
applicable provisions below by reference to the Interest
Rate Basis shown on the face hereof based on the Index
Maturity, if any, shown on the face hereof (i) plus or minus
the Spread, if any, specified on the face hereof, or (ii)
multiplied by the Spread Multiplier, if any, specified on
the face hereof. The rate of interest on this Note shall be
reset on each Interest Reset Date; provided, however, that
the Initial Interest Rate shall be in effect from the
Original Issue Date to the first Interest Reset Date. If
any Interest Reset Date would be a day that is not a Market
Day, the Interest Reset Date shall be postponed to the next
day that is a Market Day, except that if the Interest Rate
Basis on this Note is LIBOR and if such Market Day is in the
next succeeding calendar month, such Interest Reset Date
shall be the immediately preceding Market Day. The term
"Market Day" means any day that is not a legal holiday for
banking institutions in The City of New York, except that if
the Interest Rate Basis on this Note is LIBOR, "Market Day"
shall mean any such day on which dealings in deposits in
U.S. dollars are transacted in the London interbank market.
The "Interest Determination Date" pertaining to an
Interest Reset Date, if the Interest Rate Basis for this
Note is the Commercial Paper Rate, Prime Rate, LIBOR, CD
Rate or Federal Funds Rate, shall be the second Market Day
preceding such Interest Reset Date. The "Interest
Determination Date" pertaining to an Interest Reset Date, if
the Interest Rate Basis for this Note is the Treasury Rate,
shall be the day of the week in which such Interest Reset
Date falls on which Treasury bills would normally be
auctioned. Treasury bills are usually sold at auction on
the Monday of each week, unless that day is a legal holiday,
in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the
preceding Friday. If the Interest Rate Basis on this Note
is the Treasury Rate and, as the result of a legal holiday,
an auction is so held on the preceding Friday, such Friday
shall be the Interest Determination Date pertaining to the
Interest Reset Date occurring in the next succeeding week.
If an auction date shall fall on any Interest Reset Date,
then, if the Interest Rate Basis on this Note is the
Treasury Rate, such Interest Reset Date shall instead be the
first Market Day immediately following such auction date.
The "Calculation Date" pertaining to an Interest
Determination Date shall be the earlier of (i) the tenth day
after each Interest Determination Date or, if such day is
not a Business Day, the next succeeding Business Day or (ii)
the Business Day immediately preceding the applicable
Interest Payment Date or the date of maturity, redemption or
repayment.
Determination of Commercial Paper Rate. If the
Interest Rate Basis on this Note is the Commercial Paper
Rate, the Commercial Paper Rate with respect to this Note
for each Interest Reset Date shall equal the Money Market
Yield (calculated as described below) of the per annum rate
(quoted on a bank discount basis) for the relevant Interest
Determination Date for commercial paper having the Index
Maturity specified on the face hereof as such rate is
published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519) Selected Interest
Rates" or any successor publication of the Board of
Governors of the Federal Reserve System ("H.15(519)") under
the heading "Commercial Paper". In the event that such rate
is not published prior to 9:00 A.M., New York City time, on
the relevant Calculation Date, then the Commercial Paper
Rate with respect to such Interest Reset Date shall be the
Money Market Yield of such rate on such Interest
Determination Date for commercial paper having the Index
Maturity specified on the face hereof as published by the
Federal Reserve Bank of New York in its daily statistical
release, "Composite 3:30 P.M. Quotations for U.S. Government
Securities" or any successor publication published by the
Federal Reserve Bank of New York ("Composite Quotations")
under the heading "Commercial Paper". If by 3:00 P.M., New
York City time, on such Calculation Date such rate is not
yet published in either H.15(519) or Composite Quotations,
the Commercial Paper Rate with respect to such Interest
Reset Date shall be calculated by the Calculation Agent and
shall be the Money Market Yield of the arithmetic mean of
the offered per annum rates (quoted on a bank discount
basis), as of 11:00 A.M., New York City time, on such
Interest Determination Date, of three leading dealers of
commercial paper in The City of New York selected by the
Calculation Agent for commercial paper of the Index Maturity
specified on the face hereof placed for an industrial issuer
whose bond rating is "AA", or the equivalent, from a
nationally recognized statistical rating agency; provided,
however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Commercial Paper Rate with respect to
such Interest Reset Date shall be the Commercial Paper Rate
in effect on such Interest Determination Date.
"Money Market Yield" means the rate for which is quoted
on a bank discount basis, a yield (expressed as a
percentage) calculated in accordance with the following
formula:
Money Market Yield = D X 360 X 100
360 - (D X M)
where "D" refers to the per annum rate for a security,
quoted on a bank discount basis and expressed as a decimal;
and "M" refers to the number of days in the period for which
accrued interest is being calculated.
Determination of Prime Rate. If the Interest Rate
Basis on this Note is the Prime Rate, the Prime Rate with
respect to this Note for each Interest Reset Date shall
equal the rate set forth for the relevant Interest
Determination Date in H.15(519) under the heading "Bank
Prime Loan". In the event that such rate is not published
prior to 9:00 A.M., New York City time, on the relevant
Calculation Date, then the Prime Rate with respect to such
Interest Reset Date shall be the arithmetic mean of the
rates of interest publicly announced by each bank that
appears on the display designated as page "NYMF" on the
Reuter Monitor Money Rates Service (or such other page as
may replace the NYMF page on that service for the purpose of
displaying prime rates or base lending rates of major United
States banks) ("Reuters Screen NYMF Page") as such bank's
prime rate or base lending rate as in effect for such
Interest Determination Date as quoted on the Reuters Screen
NYMF Page on such Interest Determination Date. If fewer
than four such rates appear on the Reuters Screen NYMF Page
on such Interest Determination Date, the Prime Rate with
respect to such Interest Reset Date shall be the arithmetic
mean of the prime rates or base lending rates (quoted on the
basis of the actual number of days in the year divided by a
360-day year) as of the close of business on such Interest
Determination Date by three major banks in The City of New
York selected by the Calculation Agent; provided, however,
that if fewer than three banks selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence,
the Prime Rate with respect to such Interest Reset Date will
be the Prime Rate in effect on such Interest Determination
Date.
Determination of LIBOR. If the Interest Rate Basis on this
Note is LIBOR, LIBOR with respect to this Note for each
Interest Reset Date shall be determined in accordance with
the following provisions:
(i) On the relevant Interest Determination Date, LIBOR
will be the rate for deposits in U.S. dollars having the
Index Maturity specified on the face hereof, commencing on
the second Market Day immediately following such Interest
Determination Date that appears on the display designated as
page "3750" on the Dow Jones Telerate Service (or such other
page as may replace page 3750 on that service for the
purposes of displaying London interbank offered rates of
major banks) ("Telerate Page 3750") as of 11:00 A.M., London
time, on such Interest Determination Date. If such rate
does not appear on Telerate Page 3750, LIBOR with respect to
such Interest Reset Date shall be determined as described in
(ii) below.
(ii) With respect to an Interest Determination Date on
which no such rate appears on Telerate Page 3750 as
described in (i) above, LIBOR shall be determined on the
basis of the rates at approximately 11:00 A.M., London time,
on such Interest Determination Date at which deposits in
U.S. dollars having the Index Maturity specified on the face
hereof are offered to prime banks in the London interbank
market by four major banks in the London interbank market
selected by the Calculation Agent commencing on the second
Market Day immediately following such Interest Determination
Date and in a principal amount equal to an amount of not
less than U.S. $1,000,000 that in the Calculation Agent's
judgment is representative for a single transaction in such
market at such time (a "Representative Amount"). The
Calculation Agent shall request the principal London office
of each of such banks to provide a quotation of its rate.
If at least two such quotations are provided, LIBOR with
respect to such Interest Reset Date shall be the arithmetic
mean of such quotations. If fewer than two quotations are
provided, LIBOR with respect to such Interest Reset Date
shall be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., New York City time, on such
Interest Determination Date by three major banks in The City
of New York, selected by the Calculation Agent, for loans in
U.S. dollars to leading European banks having the Index
Maturity specified on the face hereof commencing on the
Interest Reset Date and in a Representative Amount;
provided, however, that if fewer than three banks selected
as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, LIBOR with respect to such
Interest Reset Date shall be the LIBOR in effect on such
Interest Determination Date.
Determination of Treasury Rate. If the Interest Rate
Basis on this Note is the Treasury Rate, the Treasury Rate
with respect to this Note for each Interest Reset Date shall
equal the rate for the auction on the relevant Interest
Determination Date of direct obligations of the United
States ("Treasury bills") having the Index Maturity
specified on the face hereof as published in H.15(519) under
the heading "U.S. Government Securities/Treasury
Bills/Auction Average (Investment)" or, if not so published
by 9:00 A.M., New York City time, on the relevant
Calculation Date, the auction average rate (expressed as a
bond equivalent, on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) for such
auction as otherwise announced by the United States
Department of the Treasury. In the event that the results
of such auction of Treasury bills having the Index Maturity
specified on the face hereof are not published or reported
as provided above by 3:00 P.M., New York City time, on such
Calculation Date, or if no such auction is held during such
week, then the Treasury Rate shall be the rate set forth in
H.15(519) for the relevant Interest Determination Date for
the Index Maturity specified on the face hereof under the
heading "U.S. Government Securities/Treasury Bills/Secondary
Market". In the event such rate is not so published by 3:00
P.M., New York City time, on the relevant Calculation Date,
the Treasury Rate with respect to such Interest Reset Date
shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent, on the
basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) of the arithmetic mean of the
secondary market bid rates as of approximately 3:30 P.M.,
New York City time, on such Interest Determination Date, of
three primary United States government securities dealers in
The City of New York selected by the Calculation Agent for
the issue of Treasury bills with a remaining maturity
closest to the Index Maturity specified on the face hereof;
provided, however, that if fewer than three dealers selected
as aforesaid by the Calculation Agent are quoting as
mentioned in this sentence, the Treasury Rate with respect
to such Interest Reset Date shall be the Treasury Rate in
effect on such Interest Determination Date.
Determination of CD Rate. If the Interest Rate Basis
on this Note is the CD Rate, the CD Rate with respect to
this Note for each Interest Reset Date shall equal the rate
for the relevant Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified
on the face hereof as published in H.15(519) under the
heading "CDs (Secondary Market)". In the event that such
rate is not published prior to 9:00 A.M., New York City
time, on the relevant Calculation Date, then the CD Rate
with respect to such Interest Reset Date shall be the rate
on such Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified
on the face hereof as published in Composite Quotations
under the heading "Certificates of Deposit". If by 3:00
P.M., New York City time, on such Calculation Date such rate
is not published in either H.15(519) or Composite
Quotations, the CD Rate with respect to such Interest Reset
Date shall be calculated by the Calculation Agent and shall
be the arithmetic mean of the secondary market offered
rates, as of 10:00 A.M., New York City time, on such
Interest Determination Date, of three leading nonbank
dealers of negotiable U.S. dollar certificates of deposit in
The City of New York selected by the Calculation Agent for
negotiable certificates of deposit of major United States
money market banks with a remaining maturity closest to the
Index Maturity specified on the face hereof in a
denomination of U.S. $5,000,000; provided, however, that if
fewer than three dealers selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence,
the CD Rate with respect to such Interest Reset Date shall
be the CD Rate in effect on such Interest Determination
Date.
Determination of Federal Funds Rate. If the Interest
Rate Basis on this Note is the Federal Funds Rate, the
Federal Funds Rate with respect to this Note for each
Interest Reset Date shall equal the rate on the relevant
Interest Determination Date for Federal Funds as published
in H.15(519) under the heading "Federal Funds (Effective)".
In the event that such rate is not published prior to 9:00
A.M., New York City time, on the relevant Calculation Date,
then the Federal Funds Rate with respect to such Interest
Reset Date will be the rate on such Interest Determination
Date as published in Composite Quotations under the heading
"Federal Funds/Effective Rate". If by 3:00 P.M., New York
City time, on such Calculation Date such rate is not
published in either H.15(519) or Composite Quotations, the
Federal Funds Rate with respect to such Interest Reset Date
shall be calculated by the Calculation Agent and shall be
the arithmetic mean of the rates, as of 9:00 A.M., New York
City time, on such Interest Determination Date, for the last
transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of
New York selected by the Calculation Agent; provided,
however, that if fewer than three brokers selected as
aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Federal Funds Rate with respect to
such Interest Reset Date shall be the Federal Funds Rate in
effect on such Interest Determination Date.
Determination of CMT Rate. If the Interest Rate Basis
on this Note is the CMT Rate, the CMT Rate with respect to
this Note for each Interest Reset Date shall equal the rate
displayed on the Designated CMT Telerate Page under the
caption "...Treasury Constant Maturities...Federal Reserve
Board Release H.15...Mondays Approximately 3:45 P.M.," under
the column for the Designated CMT Maturity Index for (i) if
the Designated CMT Telerate Page is 7055, the rate on such
Interest Determination Date and (ii) if the Designated CMT
Telerate Page is 7052, the week, or the month, as
applicable, ended immediately preceding the week in which
the related Interest Determination Date occurs. If such
rate is no longer displayed on the relevant page, or if not
displayed by 3:00 P.M., New York City time, on the relevant
Calculation Date, the CMT Rate shall be such treasury
constant maturity rate for the Designated CMT Maturity Index
as published in the relevant H.15(519). If such rate is no
longer published, or if not published by 3:00 P.M., New York
City time, on the relevant Calculation Date, the CMT Rate
shall be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States
Treasury rate for the Designated CMT Maturity Index) for the
Interest Determination Date with respect to such Interest
Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent
determines to be comparable to the rate formerly displayed
on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not published by
3:00 P.M., New York City time, on the relevant Calculation
Date, the CMT Rate shall be calculated by the Calculation
Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side
prices as of approximately 3:30 P.M., New York City time, on
the Interest Determination Date reported, according to their
written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer")
in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable
fixed rate obligations of the United States ("Treasury
Notes") with an original maturity of approximately the
Designated CMT Maturity Index and a remaining term to
maturity of not less than such Designated CMT Maturity Index
minus one year. If three or four (and not five) of such
Reference Dealers are quoting, than the CMT Rate shall be
based on the arithmetic mean of the offer prices obtained
and neither the highest nor the lowest of such quotes will
be eliminated. If the Calculation Agent cannot obtain three
such Treasury Note quotations, the CMT Rate shall be
calculated by the Calculation Agent and will be a yield to
maturity based on the arithmetic mean of the secondary
market offer side prices as of approximately 3:30 P.M., New
York City time, on the Interest Determination Date of three
Reference Dealers in The City of New York (from five such
Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for Treasury
Notes with an original maturity closest to the Designated
CMT Maturity Index and in an amount of at least $100
million. If three or four (and not five) of such Reference
Dealers are quoting, than the CMT Rate shall be based on the
arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated;
provided, however, that if fewer than three Reference
Dealers selected by the Calculation Agent are quoting, the
CMT Rate shall be the CMT Rate in effect on such CMT
Interest Determination Date. If two Treasury Notes with an
original maturity as described in the second preceding
sentence have remaining terms to maturity equally close to
the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity
will be used.
Notwithstanding the foregoing, the interest rate on
this Note shall not be greater than the Maximum Interest
Rate, if any, or less than the Minimum Interest Rate, if
any, shown on the face hereof.
At the request of the Holder hereof, the Calculation
Agent will provide to the Holder hereof the interest rate
then in effect and, if determined, the interest rate which
will become effective as of the next Interest Reset Date.
The Calculation Agent shall calculate the interest rate
hereon in accordance with the provisions hereof on or before
each Calculation Date. The Calculation Agent's
determination of any interest rate will be final and binding
in the absence of manifest error.
Unless otherwise specified on the face of this Note,
accrued interest on this Note from the date of issue or from
the last date to which interest has been paid shall be
calculated by multiplying the face amount hereof by an
accrued interest factor. Unless otherwise specified on the
face of this Note, such accrued interest factor is computed
by adding the interest factor calculated for each day from
the date of issue, or from the last date to which interest
has been paid, to but excluding the date for which accrued
interest is being calculated. Unless otherwise specified on
the face of this Note, the interest factor (expressed as a
decimal, rounded if necessary to the next higher one hundred
thousandth of a percentage point for each such day) shall be
computed by dividing the interest rate (expressed as a
decimal) applicable to such date by 360 if the Interest Rate
Basis with respect to this Note is the Commercial Paper
Rate, Prime Rate, LIBOR, CD Rate or Federal Funds Rate, or
by the actual number of days in the year, if the Interest
Rate Basis with respect to this Note is the Treasury Rate or
the CMT Rate. The applicable interest rate on any Interest
Reset Date will be the interest rate as reset on such date.
The applicable interest rate on any other day will be the
interest rate from the immediately preceding Interest Reset
Date (or, if none, the Initial Interest Rate).
Payments of interest on this Note with respect to any
Interest Payment Date or Maturity Date (or date of
redemption) will include interest accrued to but excluding
such Interest Payment Date or Maturity Date (or date of
redemption); provided, however, that if the Interest Reset
Dates with respect hereto are daily or weekly, interest
payable hereon on any Interest Payment Date, other than
interest payable on the date on which principal hereon is
payable, will include interest accrued to but excluding the
day following the next preceding Regular Record Date.
The Notes are issuable only in registered form without
coupons and will be either (a) Book-Entry Notes represented
by one or more global notes (each a "Global Note") recorded
in the book-entry system maintained by the Depository or (b)
certificated notes issued to, and registered in the names
of, the beneficial owners or their nominees ("Certificated
Notes"). Notes are issuable in minimum denominations of (i)
in the case of Notes denominated in Dollars, U.S. $1,000 and
in any larger amount in integral multiples of $1,000, and
(ii) in the case of Notes denominated in any Foreign
Currency, the equivalent in such Foreign Currency determined
in accordance with the Market Exchange Rate for such Foreign
Currency on the Business Day immediately preceding the date
on which the Company accepts an offer to purchase a Note, of
U.S. $1,000 (rounded to an integral multiple of 1,000 units
of the Foreign Currency), and in any larger amount. In the
manner and subject to the limitations provided in the
Indenture, the Global Notes or Certificated Notes are
exchangeable, without charge except for any tax or other
governmental charge imposed in relation thereto, for other
Notes of authorized denominations for a like aggregate
principal amount, at the office or agency of the Company in
the Borough of Manhattan of The City of New York, or, at the
option of the Holders thereof, such office or agency, if
any, maintained by the Company 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.
Unless this Note is denominated in Dollars, in the
event that the currency in which this Note is denominated is
not available for payment at a time at which any payment is
required hereunder due to the imposition of exchange
controls or other circumstances beyond its control, the
Company may, in full satisfaction of its obligation to make
such payment, make instead a payment in an equivalent amount
of Dollars, determined in accordance with 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, and such substituted payment of Dollars
shall not constitute a default under this Note or the
Indenture.
If a Redemption Commencement Date is specified above,
this Note may be redeemed, whether or not any other Note is
concurrently redeemed, at the option of the Company, as a
whole, or from time to time in part, on any Business Day on
or after the Redemption Commencement Date and prior to the
Maturity Date, upon mailing by first-class mail, postage
prepaid, a notice of such redemption not less than 30 nor
more than 60 days prior to the Redemption Date, to the
Holder of this Note at his address appearing in the Security
Register, as provided in the Indenture (provided that, if
the Holder of this Note is a Depository or a nominee of a
Depository, notice of such redemption shall be given in
accordance with any applicable provisions of such written
agreement between the Company, the Trustee and such
Depository (or its nominee) as may be in effect from time to
time), at the Redemption Price specified on the face of this
Note (expressed in percentages of the principal amount
hereof to be redeemed) together in each case with interest
accrued to the Redemption Date (subject to the right of the
Holder of record on a Regular Record Date to receive
interest due on an Interest Payment Date). In the event of
redemption of this Note in part only, a new Note or Notes of
this series, and of like tenor, for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
In case a default, as defined in the Indenture, shall
occur and be continuing with respect to the Notes, the
principal amount of all Notes then outstanding under the
Indenture may be declared or may become due and payable upon
the conditions and in the manner and with the effect
provided in the Indenture. The Indenture provides that such
declaration may in certain events be annulled by the Holders
of a majority in principal amount of the Notes outstanding.
To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or
of any indenture supplemental thereto, and of the rights and
obligations of the Company and the Holders of the Notes, may
be made with the consent of the Company by the affirmative
vote or consent of the Holders of not less than a majority
in principal amount of the Securities then outstanding (as
defined in the Indenture) of each series to be affected,
evidenced as in the Indenture provided; provided, however,
that no such modification or alteration shall (i) change the
stated maturity of the principal of (and premium, if any),
or the interest on, any Security, or reduce the principal
amount of (and premium, if any), 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 Security 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 of the Indenture
without the consent of the Holder of each outstanding
Security so affected, or (ii) reduce the percentage of
Securities, the vote or consent of the Holders of which is
required for such modifications and alterations, without the
consent of the Holders of all Securities affected. The
Indenture also provides that the Holders of a majority in
principal amount of the Securities of any series then
outstanding may waive any past default with respect to
Securities of such series under the Indenture and its
consequences, except a default in the payment of the
principal of (or premium, if any), or interest on, any of
the Securities.
This Note is transferable by the registered Holder
hereof or by his attorney duly authorized in writing at the
office or agency of the Company in the Borough of Manhattan
of The City of New York, or, at the option of the Holder
hereof, such office or agency, if any, maintained by the
Company 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,
without charge except for any tax, assessment or other
governmental charge imposed in relation thereto, but only in
the manner and subject to the limitations provided in the
Indenture and upon surrender of this Note. Upon any such
transfer a Note or Notes of authorized denominations for a
like aggregate principal amount and bearing a number not
contemporaneously outstanding will be issued in exchange
herefor.
The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat
the registered Holder hereof as the absolute owner hereof
(whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing
hereon by anyone other than the Company or any Security
registrar) for the purpose of receiving payment of or on
account of the principal hereof (and premium, if any), and
interest hereon, and for all other purposes, and neither the
Company, the Trustee, an Authenticating Agent, a paying
agent nor the Security registrar shall be affected by any
notice to the contrary. All such payments shall be valid
and effectual to satisfy and discharge the liability upon
this Note to the extent of the sum or sums so paid.
No recourse shall be had for the payment of the
principal of (or premium, if any), or interest on, this Note
or for any claim based hereon or otherwise in any manner in
respect hereof, or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past,
present or future, of the Company or of any predecessor or
successor corporation, whether by virtue of any
constitutional provision or statute or rule of law, or by
the enforcement of any assessment or penalty or in any other
manner, all such liability being expressly waived and
released by the acceptance hereof and as part of the
consideration for the issue hereof. In the event of any
sale or transfer of its assets and liabilities substantially
as an entirety to a successor corporation, the predecessor
corporation may be dissolved and liquidated as more fully
set forth in the Indenture.
All Dollar amounts used in or resulting from
calculations referred to in this Note shall be rounded to
the nearest cent (with one half cent being rounded upwards).
This Note shall be governed by, and construed in
accordance with, the internal laws of the State of Illinois.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
_______________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
____________________________________________________________
(Print or type assignee's name, address and zip code)
____________________________________________________________
____________________________________________________________
____________________________________________________________
and irrevocably appoint ____________________________________
agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.
____________________________________________________________
Date _______________ Your signature_________________________
____________________________________________________________
(Sign exactly as your name appears on the other side of
this Note. The signature to this assignment must be
guaranteed by a commercial bank or trust company having its
principal office or a correspondent in The City of New York
or by a member of The New York Stock Exchange.)
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
6-3/4% Note due September 15, 2005
6-3/4% 6-3/4%
Due 2005 Due 2005
Sears Roebuck Acceptance Corp., a corporation organized and
existing under the laws of the State of Delaware (hereinafter
called the "Company"), for value received, hereby promises to
pay to , or registered assigns,
the principal sum of Dollars upon
presentation and surrender of this Note, on the fifteenth day of
September, 2005, at the office or agency of the Company in the
Borough of Manhattan in The City of New York or, at the option
of the holder hereof, such office or agency, if any, maintained
by the Company 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, in
such coin or currency of the United States of America as at the
time of payment is legal tender for public and private debts,
and to pay interest on said principal sum at the rate of 6-3/4%
per annum, 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 or at either of such
offices or agencies, in like coin or currency, from the March 15
or September 15, as the case may be, next preceding the date
hereof to which interest has been paid on the Notes referred to
on the reverse hereof (unless the date hereof is the date to
which interest has been paid on such Notes, in which case from
the date hereof, or unless the date hereof is prior to March 15,
1996, in which case from September 12, 1995), semiannually,
commencing on March 15, 1996, on March 15 and September 15,
until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if this Note is
dated after any March 1 and before the following March 15, or
after any September 1 and before the following September 15,
then this Note shall bear interest from such following March 15
or September 15, provided, however, that if the Company shall
default in the payment of interest due on such following March
15 or September 15, this Note shall bear interest from the next
preceding March 15 or September 15 to which interest has been
paid on such Notes, or if no interest has been paid on such
Notes, then from September 12, 1995. The interest so payable on
any March 15 or September 15 will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof, be
paid to the person in whose name this Note is registered at the
close of business on the March 1 prior to such March 15 or the
September 1 prior to such September 15. Any such interest not
so punctually paid or duly provided for shall forthwith cease to
be payable to the registered holder on such Interest Payment
Date, and may be paid to the Person in whose name this Note 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 of which shall be given to Noteholders not less
than 10 days prior to such Special Record Date, or may be paid,
at any time in any other lawful manner, all as more fully
provided in such Indenture.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, and such further provisions
shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof or any indenture
supplemental thereto, or become valid or obligatory for any
purpose, until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under such
Indenture.<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated: ........................................
Sears Roebuck Acceptance Corp.
By _______________________________________
President
By _______________________________________
Vice President, Finance and
Assistant Secretary
[Corporate Seal]
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Securities of the series designated and
referred to in the within-mentioned Indenture.
The Chase Manhattan Bank, N.A.
as Trustee
`
By:
Authorized Officer<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
SEARS ROEBUCK ACCEPTANCE CORP.
6-3/4% Note due September 15, 2005
This Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Company
(hereinafter called the "Securities") of the series hereinafter
specified, unlimited in aggregate principal amount, all issued
or to be issued under or pursuant to an indenture dated as of
May 15, 1995, executed between the Company and THE CHASE
MANAHATTAN BANK, N.A., as Trustee; to which indenture and all
indentures supplemental thereto (herein collectively called the
"Indenture") reference is hereby made for a specification of the
rights and limitation of rights thereunder of the Holders of the
Securities, the rights and obligations thereunder of the Company
and the rights, duties and immunities thereunder of the Trustee.
The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if
any) at different rates, may be subject to different redemption
provisions (if any), may be subject to different sinking,
purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary
as in the Indenture provided. This Note is one of a series
designated as the "6-3/4% Notes due September 15, 2005" of the
Company, limited in aggregate principal amount to $250,000,000
(hereinafter referred to as the "Notes"). All terms used in
this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
In case a default, as defined in the Indenture, shall occur and
be continuing with respect to the Notes, the principal amount of
all Notes then outstanding under the Indenture may be declared
or may become due and payable upon the conditions and in the
manner and with the effect provided in the Indenture. The
Indenture provides that such declaration may in certain events
be annulled by the Holders of a majority in principal amount of
the Notes outstanding.
To the extent permitted by, and as provided in, the Indenture,
indentures supplemental thereto may be entered into with the
consent of the Company and with the consent of the Holders of
not less than a majority in principal amount of the outstanding
Securities (as defined in the Indenture) of each series to be
affected; provided, however, that no such supplemental indenture
shall (i) change the Stated Maturity of the principal of (and
premium, if any, on), or the interest on, any Security, or
reduce the principal amount of (and 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 of the Indenture 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.
The Indenture also provides that the Holders of a majority in
principal amount of the Securities of any series then
outstanding may waive any past default under the Indenture and
its consequences, except a default in the payment of the
principal of or interest or premium, if any, on any of the
Securities.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the
respective times, at the rate, and in the currency, herein
prescribed.
This Note is transferable by the registered Holder hereof or by
his attorney duly authorized in writing at the office or agency
of the Company in the Borough of Manhattan of The City of New
York or, at the option of the Holder hereof such office or
agency, if any, maintained by the Company 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, without charge except for any tax or other
governmental charge imposed in relation thereto, but only in the
manner and subject to the limitations provided in the Indenture
and upon surrender of this Note. Upon any such transfer a Note
or Notes of authorized denominations for a like aggregate
principal amount and bearing a number not contemporaneously
outstanding will be issued in exchange herefor.
The Notes are issuable only as registered Notes without
coupons, in denominations of $1,000 and any multiple of $1,000.
In the manner and subject to the limitations provided in the
Indenture, Notes are exchangeable, without charge except for any
tax or other governmental charge imposed in relation thereto,
for other Notes of authorized denominations for a like aggregate
principal amount, at the office or agency of the Company in the
Borough of Manhattan of The City of New York or, at the option
of the Holder hereon, such office or agency, if any, maintained
by the Company 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.
The Company, the Trustee, any Authenticating Agent, any paying
agent and any Security registrar may deem and treat the
registered Holder hereof as the absolute owner hereof (whether
or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon by anyone other
than the Company or any Security registrar) for the purpose of
receiving payment of or on account of the principal hereof and
interest hereon and for all other purposes, and neither the
Company, the Trustee, an Authenticating Agent, a paying agent
nor Security registrar shall be affected by any notice to the
contrary. All such payments shall be valid and effectual to
satisfy and discharge the liability upon this Note to the extent
of the sum or sums so paid.
No recourse shall be had for the payment of the principal of or
the interest on this Note or for any claim based hereon or
otherwise in any manner in respect hereof, or in respect of the
Indenture, against any incorporator, shareholder, officer or
director, past, present or future, of the Company or of any
predecessor or successor corporation, whether by virtue of any
constitutional provision or statute or rule of law, or by the
enforcement of any assessment or penalty or in any other manner,
all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue
hereof. In the event of any sale or transfer of its assets and
liabilities substantially as an entirety to a successor
corporation, the predecessor corporation may be dissolved and
liquidated as more fully set forth in the Indenture.
EXHIBIT 4(e)
SEARS, ROEBUCK AND CO.
Sears Tower
Chicago, Illinois 60684
May 15, 1995
Sears Roebuck Acceptance Corp.
3711 Kennett Pike
Greenville, Delaware 19807
Gentlemen:
Sears Roebuck Acceptance Corp. ("SRAC"), as registrant,
and Sears, Roebuck and Co. ("Sears"), as co-registrant, have
filed a registration statement (Registration Statement No.
33-58139) with the Securities and Exchange Commission, and
presently propose to file Amendment No. 1 thereto (the
"Registration Statement"). The Registration Statement, as
proposed to be amended, relates to up to $3 billion
aggregate initial offering price of Debt Securities to be
issued by SRAC (the "Debt Securities"). Subject to the
provisions contained in the form of Indenture, pursuant to
which the Debt Securities are proposed to be issued, which
is proposed to be filed as an exhibit to Amendment No. 1 to
the Registration Statement (the "Indenture"), SRAC will be
required to maintain a Fixed Charge Coverage Ratio (as
defined in the Indenture) for any fiscal quarter of not less
than 1.10 and SRAC has agreed to cause Sears to continue to
own and hold all legal title to and beneficial interest in
all of the outstanding voting stock of SRAC.
This is to confirm our agreement ("Fixed Charge
Coverage and Ownership Agreement") that Sears will (a) pay
SRAC such amounts which, together with any other earnings
available to SRAC therefor, are sufficient for SRAC to
maintain a Fixed Charge Coverage Ratio for any fiscal
quarter of not less than 1.10 as long as SRAC is required by
the provisions of the Indenture relating to any outstanding
Debt Securities to maintain such Fixed Charge Coverage Ratio
and (b) continue to own and to hold all legal title to and
beneficial interest in all of the outstanding voting stock
of SRAC as long as SRAC is required by the provisions of the
Indenture relating to any outstanding Debt Securities to
cause Sears to own and hold such title and interest.
This agreement is made for the benefit of the holders
of outstanding Debt Securities under the Indenture (the
"Holders"). SRAC will cause Sears to observe and perform in
all material respects all covenants or agreements of Sears
contained in this agreement. Sears agrees that any Holder
may bring a direct and immediate action against Sears to
enforce Sears obligations hereunder.
If the foregoing satisfactorily sets forth the terms
and conditions of our agreement, please indicate your
acceptance thereof 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: /s/ Alice M. Peterson
Alice M. Peterson
Vice President and Treasurer
Accepted:
SEARS ROEBUCK ACCEPTANCE CORP.
By: /s/ Keith E. Trost
Keith E. Trost
President
October 25, 1995
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 am Senior Counsel, Corporate Law, of Sears, Roebuck
and Co. ("Sears"). The Corporate Law Department, under my
supervision, has served as counsel to Sears and Sears Roebuck
Acceptance Corp. (the "Company") in connection with (i)
Registration Statement No. 33-58139 as filed with the
Securities and Exchange Commission on March 17, 1995 and
Amendment No. 1 thereto (together, the "Registration
Statement") in connection with the registration under the
Securities Act of 1933, as amended (the "Act") of
$3,000,000,000 aggregate initial offering price of debt
securities of SRAC, for an offering to be made on a continuous
or delayed basis pursuant to the provisions of Rule 415 under
the Act, (ii) the final prospectus, dated May 23, 1995,
relating to the offering and sale of $3,000,000,000 of the
aforesaid debt securities, which is part of the Registration
Statement (the "Prospectus"), and the Prospectus Supplements,
dated June 8, June 16 and September 7, 1995, (collectively,
the "Prospectus Supplements") relating to the offering and
sale of $250,000,000 aggregate principal amount of 6 1/2%
Notes due June 15, 2000 (the "6 1/2% Notes"), $2,000,000,000
aggregate principal amount Medium-Term Notes Series I (the
"Medium-Term Notes") and $250,000,000 aggregate principal
amount of 6 3/4% Notes due September 15, 2005 (the "6 3/4%
Notes"),respectively, of the Company (collectively, the
"Notes"), (iii) the Indenture dated as of May 15, 1995 between
the Company and The Chase Manhattan Bank (National
Association), as Trustee, relating to the aforesaid debt
securities, (iv) (a) the Underwriting Agreement dated June 8,
1995 among the Company, Sears and Morgan Stanley & Co.
Incorporated, Goldman, Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Brothers Inc and (b)
the Pricing Agreement pursuant thereto dated June 8, 1995
among the Company, Sears and Morgan Stanley & Co.
Incorporated, Goldman, Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Brothers Inc, as the
several Underwriters identified in Schedule I thereto,
relating to the sale of the 6 1/2% Notes, (v) the Distribution
Agreement, dated June 16, 1995, among the Company, Sears and
Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Salomon
Brothers Inc, relating to the Medium-Term Notes (vi)(a) the
Underwriting Agreement dated September 7, 1995 between the
Company, Sears and Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities
Inc., Morgan Stanley & Co. Incorporated and Salomon Brothers
Inc and (b) the Pricing Agreement pursuant thereto dated
September 7, 1995 between the Company, SRAC and Goldman, Sachs
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated
and Salomon Brothers Inc, as the several Underwriters
identified in Schedule I thereto, relating to the sale of the
6 3/4% Notes and (vii) the forms of the Notes. I am familiar
with the proceedings heretofore taken by the Company in
connection with the authorization, registration, issuance and
sale of the Notes.
I am of the opinion that the Notes are 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 and to general equity principles.
I consent to the incorporation by reference of this
opinion into the Registration Statement, and to the references
to me in the Prospectus and Prospectus Supplements.
Very truly yours,
/S/Robert J. Pence
Robert J. Pence
BAKER & MCKENZIE
June 16, 1995
Sears Roebuck Acceptance Corp.
3711 Kennett Pike
Greenville, DE 19807
Gentlemen:
Sears Roebuck Acceptance Corp. ("SRAC") may issue up to U.S.
$2,000,000,000 of Medium-Term Notes Series I (the "Notes") due at least
9 months from the date of issue as described in the Prospectus
Supplement dated June 16, 1995 to the Prospectus dated May 23, 1995
relating to the initial offering and sale of the Notes (the
"Prospectus").
This opinion is rendered to you in support of an opinion of Robert
J. Pence, Senior Counsel, of even date herewith, rendered pursuant to
Section 8(c) of the Distribution Agreement dated June 16, 1995, among
SRAC, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon Brothers
Inc. (the "Distribution Agreement").
As special tax counsel to SRAC, we have examined such records and
documents of SRAC as we deemed necessary and relevant for purposes of
rendering our opinion as to the principal United States federal income
and estate tax consequences to persons holding Notes, including (i) the
Prospectus, (ii) the Prospectus Supplement, (iii) the Indenture dated as
of May 15, 1995 between The Chase Manhattan Bank, N.A., and SRAC, (iv)
the form of Notes to be issued under the Indenture, and (v) the
Distribution Agreement. Unless otherwise defined herein, all capitalized
terms shall have the meanings assigned to them in the Prospectus and the
Prospectus Supplement.
We have been advised and for purposes of our opinion assume that
SRAC will characterize all Notes issued under the Indenture as
indebtedness of SRAC for all United States federal income tax purposes.
This opinion does not address:
(1) Special tax situations, such as dealers in securities or
currencies, Holders whose functional currency is not the United States
dollar, or persons holding Notes as a hedge against currency risk or as
part of a larger integrated financial transaction;
(2) Notes issued under the Indenture with a term of 12 months or
less at issue prices of less than their stated redemption price at
maturity, giving rise to original issue discount for federal income tax
purposes;
(3) Notes issued under the Indenture providing for payments of
principal in amounts to be determined by reference to an index;
(4) Notes with original issue discount which are denominated in
more than one currency; and
(5) Notes with original issue discount with a term of more than
five years from the date of issue and having a fixed yield to maturity
that equals or exceeds the sum of the applicable federal rate for the
calendar month in which the obligation is issued plus five percentage
points, including Notes with maturities of more than five years that
could have yields in excess of the applicable federal rate plus five
percentage points because they provide for contingent or variable
payments or because they are subject to redemption before maturity.
On the basis of the foregoing, we are of the opinion that under
present United States federal income and estate tax laws the principal
United States federal income and estate tax consequences to persons
holding Notes are as follows:
In the opinion of Baker & McKenzie, all Notes issued under the
Indenture will be properly characterized as indebtedness of SRAC, and
SRAC will so characterize all such Notes for all United States federal
income tax purposes. This characterization by SRAC will be binding on
every Holder of a Note, unless the Holder discloses its inconsistent
characterization on such Holder's federal income tax return. The
Internal Revenue Service will not be bound by the characterization of
the Notes by SRAC and the Holders.
United States Holders
As used herein, "United States Holder" means a Holder of a Note
who is, or which is, a United States Person. A "United States Person"
is (i) a citizen or resident of the United States of America (including
the States and the District of Columbia), its territories, possessions
and other areas subject to its jurisdiction, including the Commonwealth
of Puerto Rico (the "United States"), (ii) a corporation or partnership
created or organized in the United States or under the laws of the
United States or of any State and (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of
its source.
Payments of Interest and Original Issue Discount. Stated interest
on a Note (whether in a foreign currency or U.S. dollars) will be
taxable to a United States Holder as ordinary interest income at the
time it accrues or is paid in accordance with the United States Holder's
method of accounting for tax purposes, subject to the discussion in the
succeeding paragraphs.
If Notes are issued at a discount from their stated redemption
price at maturity equal to or more than one-fourth of one percent of the
stated redemption price at maturity multiplied by the number of full
years to maturity, such Notes will be original issue discount
obligations ("Original Issue Discount Notes"). The
difference between the issue price and the stated redemption price at
maturity of each such Original Issue Discount Note will constitute
original issue discount ("Original Issue Discount"). The stated
redemption price at maturity will include all payments other than
interest based on a fixed rate or, unless otherwise stated in a Pricing
Supplement, a floating rate, payable unconditionally at intervals of one
year or less during the entire term of the Original Issue Discount Notes
("Stated Interest").
Each initial Holder of an Original Issue Discount Note will be
required to include in gross income, in each taxable year during which
the Original Issue Discount Note is held, a portion of the Original
Issue Discount calculated on a yield to maturity basis in addition to
Stated Interest, if any, paid on such Note, regardless of the United
States Holder's method of accounting for tax purposes. A United States
Holder should be aware that, because of the above original issue
discount rules, such Holder will be required to include increasingly
greater amounts of Original Issue Discount in gross income in each
successive accrual period in advance of the receipt of the cash
attributable to such Original Issue Discount income.
A United States Holder of an Original Issue Discount Note must
include in gross income the sum of the daily portions of Original Issue
Discount with respect to an Original Issue Discount Note for each day
during the taxable year such Holder holds such Note. The daily portion
is determined by allocating to each day of the accrual period a ratable
portion of an amount equal to the excess of (i) the Adjusted Issue Price
(as defined below) of the Original Issue Discount Note at the beginning
of the accrual period multiplied by the yield to maturity of such Note
(determined by compounding at the close of each accrual period and
adjusted for the length of the accrual period) over (ii) the amount
payable as Stated Interest, if any, on such Note during such accrual
period. United States Holders may accrue Original Issue Discount using
accrual periods of any length, and such accrual periods may vary in
length over the term of the Original Issue Discount Note, provided that
each accrual period must be no longer than one year and each scheduled
payment of principal or interest must occur either on the final day of
an accrual period or on the first day of an accrual period.
The Adjusted Issue Price of an Original Issue Discount Note at the
start of any accrual period is the issue price of the Original Issue
Discount Note increased by the amount of Original Issue Discount accrued
during all prior accrual periods. A United States Holder of an Original
Issue Discount Note must include in income accrued Original Issue
Discount regardless of whether such Holder uses a cash receipts and
disbursements method of tax accounting or an accrual basis of tax
accounting.
The United States tax treatment of any Indexed Notes will be
described in the applicable Pricing Supplement.
The face of each Original Issue Discount Note will set forth the
issue date, issue price, yield to maturity, amount of Original Issue
Discount, and any other information required by Treasury regulations.
SRAC will furnish to the Internal Revenue Service the amount of Original
Issue Discount, the issue date and any additional information required
by Treasury regulations. Holders, including subsequent Holders, will be
required to determine for themselves the reportable amount of Original
Issue Discount income for a year.
For a Holder who uses a cash receipts and disbursements basis of
tax accounting, if a receipt of payment of stated interest is
denominated in a foreign currency, the amount of interest income will be
the U.S. dollar value of the foreign currency payment amount translated
at the spot rate on the payment date, regardless of whether the payment
is in fact converted to U.S. dollars. For a Holder who uses an accrual
basis of tax accounting, if an accrual of interest is denominated in a
foreign currency, the amount of interest income will be the U.S. dollar
value of the amount of interest accrued in foreign currency translated
at the appropriate accrual translation rate. The "appropriate accrual
translation rate" is the average spot rate in effect during such accrual
period or, at the Holder's election, the spot rate on the last day of
such accrual period (or on the day of receipt of such interest if such
day is within five days of the end of the applicable accrual period).
If the latter translation convention is elected, such convention will
apply with respect to all other debt instruments held by the Holder
during or after the taxable year for which the election is made. Upon
receipt of the interest payment in foreign currency or upon disposition
of the Note, a Holder will recognize currency gain or loss with respect
to the accrued interest equal to the difference between the Holder's
accrued foreign currency interest income translated at the appropriate
accrual translation rate and the U.S. dollar value of the foreign
currency payment translated at the spot rate on the payment date,
regardless of whether the payment is in fact converted to U.S. dollars.
In the case of Original Issue Discount Notes, Treasury regulations
provide similar rules for both cash basis and accrual basis United
States Holders for calculating currency gain or loss with respect to
accrued Original Issue Discount. Original Issue Discount will accrue in
the currency in which the Note is denominated and will be translated
into U.S. dollars at the appropriate accrual translation rate. Upon
receipt of the accrued Original Issue Discount or the disposition of the
Note, such a Holder will recognize currency gain or loss with respect to
the accrued Original Issue Discount equal to the difference between the
Holder's accrued Original Issue Discount income translated at the
appropriate accrual translation rate and the U.S. dollar value of the
foreign currency payment translated at the spot rate on the payment date
or the date of disposition.
Currency gain or loss recognized by a Holder upon receipt of a
foreign currency payment will be treated as ordinary income or loss. In
accordance with current Treasury regulations, currency gain or loss will
not be treated as interest income or expense.
If a United States Holder acquires a Note (including an Original
Issue Discount Note) other than upon original issue for an amount less
than the principal amount or, in the case of an Original Issue Discount
Note, less than the Revised Issue Price (defined as the sum of the issue
price of the Note and the aggregate amount of Original Issue Discount
includible in gross income for all periods prior to the acquisition
without regard to acquisition premium) of such Original Issue Discount
Note on the date of acquisition, the Note may be considered to be a
"market discount bond". As a result, a portion of the gain on the sale
or redemption of the Note (see "United States Tax Considerations-United
States Holders--Purchase, Sale and Redemption of Notes") equal to the
amount of market discount accrued with respect to the Note while it was
held by the United States Holder will be treated as interest income. In
addition, interest on indebtedness incurred or continued to purchase or
carry a Note that is a market discount bond, to the extent that it
exceeds in any year the interest (including Original Issue Discount) on
the Note includible in the United States Holder's income for that year,
may not be fully deductible in that year. The foregoing market discount
rules will not apply if the United States Holder elects to include in
income in each taxable year the portion of the market discount
attributable to that year (accrued on either a straight line or constant
interest rate basis) with respect to all market discount bonds acquired
during or after the taxable year in which such election is made. In the
case of a Note denominated in a foreign currency, the amount of market
discount will be determined in units of foreign currency in which the
Note is denominated. Unless the Holder elects to include in income in
each taxable year such market discount, the resultant market discount is
required to be translated at the spot rate on the date of sale or
redemption of the Note. No part of such market discount is treated as
currency gain or loss. If the Holder elects to include in income in each
taxable year such market discount, the accrued market discount currently
includible in income will be translated at the average spot rate for the
accrual period. Currency gain or loss with respect to accrued market
discount currently includible in income will be determined in a manner
similar to that for accrued Original Issue Discount as discussed above.
If a United States Holder acquires a Note other than upon original
issue for an amount more than the redemption price, a Holder may elect
to amortize such bond premium on a yield to maturity basis. In the case
of a Note denominated in a foreign currency, the amount of bond premium
will be determined in units of the foreign currency in which the Note is
denominated. If a Holder elects to amortize such bond premium, the
amount of accrued bond premium in units of foreign currency in each
taxable year will reduce interest income in units of foreign currency
for such taxable year. Currency gain or loss will be taken into account
with respect to accrued bond premium in each taxable year by treating
the portion of premium amortized with respect to any period as a return
of principal (see "United States Tax Considerations--United States
Holders--Purchase, Sale and Redemption of Notes").
If a United States Holder acquires an Original Issue Discount Note
other than upon original issue for an amount more than the Revised Issue
Price of such Note on the date of acquisition, but less than the
redemption price of such Note, such a Holder will be required to reduce
each daily portion of accrued Original Issue Discount by an allocable
portion of such acquisition premium. The allocable portion of such
acquisition premium will be equal to the daily portion of accrued
Original Issue Discount multiplied by a fraction (i) the numerator of
which is the excess of the cost of the Original Issue Discount Note
incurred by such Holder over the
Revised Issue Price of such Note on the date of acquisition and (ii) the
denominator of which is the excess of the stated redemption price of the
Original Issue Discount Note at maturity over the Revised Issue Price of
such Note on the date of acquisition. In the case of an Original Issue
Discount Note denominated in a foreign currency, the amount of
acquisition premium will be determined in units of foreign currency in
which the Note is denominated. The amount of the allocable portion of
acquisition premium in units of foreign currency in each taxable year
will reduce accrued Original Issue Discount in units of foreign currency
for such taxable year. Currency gain or loss will be taken into account
with respect to accrued acquisition premium in each taxable year by
treating the portion of acquisition premium amortized with respect to
any period as a return of principal (see "United States Tax
Considerations--United States Holders--Purchase, Sale and Redemption of
Notes").
A Holder may elect to include in gross income its entire return on
a Note (i.e., the excess of all remaining payments to be received on the
Note over the amount paid for such Note by the Holder) based on the
compounding of interest at a constant rate. This election for a Note
with amortizable bond premium or market discount results in a deemed
election to apply the same accrual principles to all of the Holder's
debt instruments with amortizable bond premium or market discount. This
election may be revoked only with the consent of the IRS.
Purchase, Sale and Redemption of Notes. A United States Holder's
tax basis in a Note will be its U.S. dollar cost. Such Holder's
original tax basis in a Note will be increased by (i) the net amount of
accrued Original Issue Discount included in income and (ii) the amount
of accrued market discount included in income. Such Holder's tax basis
in a Note will be decreased by (i) the amount of accrued bond premium
and (ii) payments other than Stated Interest received by the Holder with
respect to a Note. Although the issue has not yet been directly
addressed by Treasury regulations, in the case of a Note denominated in
a foreign currency, such Holder's original tax basis likely will be
increased by (i) the net amount of accrued Original Issue Discount
income in units of foreign currency translated at the appropriate
accrual translation rate in effect during such accrual period and (ii)
the amount of accrued market discount included in income in units of
foreign currency translated at the average spot rate in effect during
such accrual period. Such Holder's tax basis likely will be decreased
by (i) payments treated as receipts of accrued bond premium in units of
foreign currency translated at the spot rate on the date of acquisition;
(ii) payments treated as receipts of accrued Original Issue Discount
translated at the appropriate accrual translation rates, or accrued
market discount translated at the average spot rate, for the relevant
accrual period; and (iii) payments treated as receipts of principal
translated at the spot rate on the date of acquisition. In accordance
with current Treasury regulations, payments in units of foreign currency
received on a Note by such a Holder will be treated first as a receipt
of Stated Interest, second as a receipt of Original Issue Discount to
the extent accrued, and finally as a receipt of principal.
Subject to the discussion below and the discussion of Notes which
are market discount bonds (see "United States Tax Considerations--United
States Holders--Payments of Interest and Original Issue Discount"), upon
the sale or redemption of a Note, a United States Holder will recognize
capital gain or loss equal to the difference between the amount realized
on the sale or redemption of the Note and the tax basis of the Note.
The amount realized on a sale or redemption of a Note denominated in a
foreign currency will be equal to the sale proceeds or redemption price
in units of foreign currency translated at the spot rate on the date of
sale or redemption. Except to the extent described in the next
paragraph or described in "United States Tax Considerations--United
States Holders--Payments of Interest and Original Issue Discount", gain
or loss will be long-term capital gain or loss if at the time of the
sale or redemption the Note has been held for more than one year.
Except to the extent described in the discussion of market
discount bonds (see "United States Tax Considerations--United States
Holders--Payments of Interest and Original Issue Discount"), the portion
of the gain or loss recognized by a United States Holder on the sale or
redemption of a Note that is attributable to changes in exchange rates
will be treated as ordinary income or loss. If a United States Holder
acquires a Note denominated in a foreign currency on or after the date
of original issue, such Holder's currency gain or loss with respect to
principal will be calculated by multiplying the principal amount in
units of foreign currency by the change in spot rates between the date
such Holder acquired the Note and the date it was sold or redeemed. For
purposes of computing currency gain or loss, the principal amount of a
Note will be a Holder's purchase price for the Note in units of foreign
currency. The sum of any currency gain or loss with respect to the
principal of and accrued but unpaid interest (including accrued but
unpaid Original Issue Discount, if any) on a Note will be realized only
to the extent of the total gain or loss realized on the sale or
redemption.
Exchange of Foreign Currency. Foreign currency received as
interest on a Note or on the sale or redemption of a Note will have a
tax basis equal to its U.S. dollar value (translated at the spot rate)
at the time such interest is received or at the time of sale or
redemption of the Note. Foreign currency purchased will generally have
a tax basis equal to the U.S. dollar cost of acquisition. Any gain or
loss recognized on a sale or other disposition of the foreign currency
(including its use to purchase Notes or its exchange for U.S. dollars)
will be ordinary income or loss.
Foreign Holders
U.S. Withholding Tax. Under United States federal income tax laws
now in effect, and subject to the discussion of backup withholding which
follows, payments by SRAC or any paying agent thereof (in its capacity
as such) of principal of and interest (including payments of Original
Issue Discount, if any) on (and premium, if any, on) a Note to a Holder
who is not a United States Person will not be subject to United States
federal withholding tax, provided in the case of interest (including
payments of Original Issue Discount, if any) that (i) such Holder does
not actually or constructively own 10 percent or more of the total
combined voting power of all classes of stock of SRAC entitled to vote;
(ii) such Holder is not a controlled foreign corporation for United
States tax purposes with respect to which SRAC is a "related person" as
defined in the Code; and (iii) (A) the beneficial owner of the Note
provides a signed written statement to SRAC or its agent, under
penalties of perjury, that certifies that it is not a United States
Person and provides its name and address, (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "Financial
Institution") and holds the Note on behalf of the beneficial owner
provides an intermediary certificate to SRAC or its agent under
penalties of perjury that such a statement has been received from the
beneficial owner by it or by a Financial Institution between it and the
beneficial owner and furnishes the payor with a copy thereof, or (C) a
securities clearing organization that is the last intermediary in the
chain before SRAC or its agent (a "qualified clearing organization")
electronically provides an intermediary certificate to SRAC or its agent
under penalties of perjury that such a statement has been received from
the beneficial owner by it or by an intermediary that is a member of the
qualified clearing organization and agrees to furnish (or to cause the
relevant member intermediary to furnish) promptly upon the request of
SRAC or the Internal Revenue Service such statement. A statement
described in this paragraph is effective only with respect to interest
payments made to the certifying Holder after the issuance of the
statement in the calendar year of its issuance and the two immediately
succeeding calendar years.
U.S. Income Tax. Except for the possible imposition of United
States withholding tax (see "United States Tax Considerations-Foreign
Holders--U.S. Withholding Tax") and backup withholding tax (see "United
States Tax Considerations--Backup Withholding"), payments of principal
of and interest (including accrued Original Issue Discount, if any) on
(and premium, if any, on) a Note to a Holder who is not a United States
Person will not be subject to United States federal income tax, and
gains from the sale, redemption or other disposition of a Note will not
be subject to United States federal income tax, provided that:
(a) The Holder (or the fiduciary, settlor, or beneficiary of, or a
person holding a power over, such Holder, if such Holder is an estate or
trust; or a partner of such Holder, if such Holder is a partnership)
shall not be or have been engaged in a trade or business, or be or have
been present in, or have or have had a permanent establishment in the
United States;
(b) There shall not have been a present or former connection
between such Holder (or between the fiduciary, settlor, or beneficiary
of, or a person holding a power over, such Holder, if such Holder is an
estate or trust; or a partner of such Holder, if such Holder is a
partnership) and the United States, including, without limitation, such
Holder's status as a citizen or former citizen thereof or resident or
former resident thereof; and
(c) The Holder (or the fiduciary, settlor, or beneficiary of, or
a person holding a power over, such Holder, if such Holder is an estate
or trust; or a partner of such Holder, if such Holder is a partnership)
is not and has not been, for United States tax purposes, (i) a personal
holding company, (ii) a corporation that accumulates earnings to avoid
United States federal income tax, or (iii) a person treated as making an
election the effect of which is to make payments of principal of and
interest (including accrued Original Issue Discount, if any) on (and
premium, if any, on) Notes subject to United States federal income tax.
If a Holder who is not a United States Person is engaged in a
trade or business in the United States and interest (including accrued
Original Issue Discount, if any), gain or income in respect of a Note of
such Holder is effectively connected with the conduct of such trade or
business, the Holder, although exempt from the withholding tax discussed
in the preceding paragraphs, may be subject to United States income tax
on such interest (including accrued Original Issue Discount, if any),
gain or income at the statutory rates provided for United States Persons
after deduction of deductible expenses allocable to such effectively
connected interest, gain or income. In addition, if such a Holder is a
foreign corporation, it may be subject to a branch profits tax equal to
30% of its effectively connected earnings and profits for the taxable
year, as adjusted for certain items, unless a lower rate applies under a
United States income tax treaty with the Holder's country of residence.
For this purpose, interest (including accrued Original Issue Discount,
if any), gain or income in respect of a Note will be included in
earnings and profits subject to the branch tax if the interest
(including accrued Original Issue Discount, if any), gain or income is
effectively connected with the conduct of the United States trade or
business of the Holder.
U.S. Estate Tax. A Note held by an individual who at the time of
death is not a citizen or resident of the United States will generally
not be subject to United States federal estate tax if the individual
does not actually or constructively own 10% or more of the total
combined voting power of all classes of stock of SRAC and interest
(including accrued Original Issue Discount, if any) on the Note is not
effectively connected with a United States trade or business of the
individual.
Backup Withholding
A 31% "backup" withholding tax and information reporting
requirements apply to certain payments of principal of and interest
(including payments of Original Issue Discount, if any) on (and premium,
if any, on) an obligation, and to proceeds of the sale of an obligation
before maturity, to certain noncorporate United States Holders, if such
Holders fail to provide correct taxpayer identification numbers and
other information or fail to comply with certain other requirements.
SRAC, its paying agent, or a broker, as the case may be, will be
required to withhold from any payment that is subject to backup
withholding, a tax equal to 31% of such payment unless the Holder
furnishes its taxpayer identification number in the manner prescribed in
applicable Treasury regulations and certain other conditions are met.
In the case of payments of principal of and interest (including
payments of Original Issue Discount, if any) on (and premium, if any,
on) Notes by SRAC or paying agents of SRAC to Holders who are not United
States Persons, temporary Treasury regulations provide that backup
withholding and information reporting will not apply if the Holder has
provided the required certification of its non-United States status
under penalties of perjury or has otherwise established an exemption
(provided that neither SRAC nor its paying agent has actual knowledge
that the Holder is a United States Person or the conditions of any other
exemption are not in fact satisfied). In addition, if payment is
collected by a foreign office of a custodian, nominee or other agent
acting on behalf of an owner of a Note, such custodian, nominee or other
agent will not be required to apply backup withholding to its payments
to such owner. However, in such case if the custodian, nominee or other
agent is a United States Person, a controlled foreign corporation for
United States federal income tax purposes, or a foreign person 50% or
more of whose gross income is from a United States trade or business for
a specified three-year period, such custodian, nominee or other agent
will be subject to certain information reporting requirements with
respect to such payment unless such custodian, nominee or other agent
has evidence in its records that the Holder is not a United States
Person and no actual knowledge that such evidence is false or the Holder
otherwise establishes an exemption or is an exempt recipient. An exempt
recipient includes a bank, corporation or Financial Institution.
Under current regulations, payments of the proceeds of the sale of
a Note by a Holder who is not a United States Person to or through a
foreign office of a broker will not be subject to backup withholding.
Payments by foreign offices of a broker that is a United States Person,
a controlled foreign corporation for United States federal income tax
purposes or a foreign person 50% or more of whose gross income is from a
United States trade or business for a specified three-year period are
currently subject to certain information reporting requirements, unless
the payee is an exempt recipient or the broker has evidence in its
records that the payee is not a United States Person and no actual
knowledge that such evidence is false. Payments of the proceeds of a
sale to or through the United States office of a broker will be subject
to information reporting and backup withholding unless the payee
certifies under penalty of perjury that he is not a United States Person
and provides his name and address or the payee otherwise establishes an
exemption.
Any amounts withheld under the backup withholding rules from a
payment to a Holder will be allowed as a refund or a credit against such
Holder's United States federal income tax, provided that the required
information is furnished to the United States Internal Revenue Service.
The foregoing is based on the Internal Revenue Code of 1986, as
amended, regulations, rulings, administrative pronouncements and
judicial decisions as of the date hereof. Subsequent developments in
these areas could have a material effect on this opinion.
We hereby confirm that, as of the date hereof, the statements as
to United States law in the Prospectus Supplement contained under the
caption "United States Tax Considerations" are correct. We hereby
consent to the use of our opinion as set forth in the Prospectus
Supplement and the reference to our firm in said Supplement.
The Chase Manhattan Bank, N.A., as Trustee, may rely on this
opinion as if it were addressed to them.
Very truly yours,
/S/Baker & McKenzie
BAKER & MCKENZIE
RHD/LGH/JOD
