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) August 9, 1996
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 August 2, 1996, Registrant executed a Pricing Agreement with
Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Brothers Inc (the "Pricing Agreement"),
as the several underwriters named therein, relating to $250,000,000 aggregate
principal amount of Registrant's 6.90% Notes due August 1, 2003 pursuant to an
Underwriting Agreement executed August 2, 1996, with Morgan Stanley & Co.
Incorporated, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers Inc, relating to debt securities.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
Exhibit No.
1.1 Pricing Agreement, dated August 2, 1996, among Registrant,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc.
1.2 Underwriting Agreement, dated August 2, 1996, among Registrant,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc.
4 Form of 6.90% Note.
5 Opinion of Robert J. Pence dated August 9, 1996, relating to
the validity of $250,000,000 aggregate principal amount of
6.90% Notes due August 1, 2003.
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: August 9, 1996 By: /S/Stephen D. Carp
Stephen D. Carp
Vice President, Finance
and Assistant Secretary
<PAGE>
EXHIBIT INDEX
Exhibit No.
1.1 Pricing Agreement, dated August 2, 1996, among Registrant,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc.
1.2 Underwriting Agreement, dated August 2, 1996, among Registrant,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Salomon
Brothers Inc.
4 Form of 6.90% Note.
5 Opinion of Robert J. Pence dated August 9, 1996, relating to
the validity of $250,000,000 aggregate principal amount of
6.90% Notes due August 1, 2003.
23 Consent of Robert J. Pence (included in Exhibit 5).
Exhibit 1.1
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
1585 Broadway
New York, New York 10036
August 2, 1996
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 August 2, 1996
(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.<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: /S/Stephen D. Carp
SEARS, ROEBUCK AND CO.
By: /S/Alice M. Peterson
Accepted as of the date hereof:
By: /S/Morgan Stanley & Co. Incorporated
Principal
MORGAN STANLEY & CO. INCORPORATED
/S/Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
By: /S/Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /S/Salomon Brothers Inc
Managing Director
SALOMON BROTHERS INC
<PAGE>
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
<PAGE>
SCHEDULE II
Title of Designated Securities:
6.90% Notes due August 1, 2003
Aggregate principal amount:
$250,000,000
Price to Public:
99.975% of the principal amount of the Designated
Securities, plus accrued interest from August 9, 1996 to the Time
of Delivery
Purchase Price by Underwriters:
99.375% of the principal amount of the Designated
Securities, plus accrued interest from August 9, 1996 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:
None
Sinking Fund Provisions:
None
Time of Delivery:
9:00 A.M., Chicago time, August 9, 1996
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
- -------------------
1 Incorporated by reference to attached form of security.
<PAGE>
Delayed Delivery: None
Counsel:
To the Company and Sears, Robert J. Pence, Vice President,
Law, Sears, Roebuck and Co.
To the Underwriters, Wachtell, Lipton, Rosen & Katz
<PAGE>
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
6.90% Note due August 1, 2003
6.90% 6.90%
Due 2003 Due 2003
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 first day of
August, 2003, 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 6.90% 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 February
1 or August 1, 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 February
1, 1997, in which case from August 9, 1996), semiannually,
commencing on February 1, 1997, on February 1 and August 1, until
payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if this Note is
dated after any January 15 and before the following February 1,
or after any July 15 and before the following August 1, then this
Note shall bear interest from such following February 1 or August
1, provided, however, that if the Company shall default in the
payment of interest due on such following February 1 or August 1,
this Note shall bear interest from the next preceding February 1
or August 1 to which interest has been paid on such Notes, or if
no interest has been paid on such Notes, then from August 9,
1996. The interest so payable on any February 1 or August 1
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
January 15 prior to such February 1 or the July 15 prior to such
August 1. 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.
6.90% Note due August 1, 2003
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 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 "6.90% Notes due August 1, 2003" 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.
Exhibit 1.2
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
1585 Broadway
New York, New York 10036
August 2, 1996
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company") proposes to issue and sell from time to time certain
of its debt securities registered under the registration
statement referred to in Section 2(a) (the "Securities"). The
Company intends to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with
such additions and deletions as the parties thereto may
determine, and, subject to the terms and conditions stated
herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing
Agreement and the securities specified therein) certain of the
Securities specified in Schedule II to such Pricing Agreement
(with respect to such Pricing Agreement, the "Designated
Securities"). The Designated Securities with respect to each
Pricing Agreement shall be issued under an indenture (the
"Indenture") identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be made
from time to time to the Underwriters of such Securities, for
whom you will act as representatives. This Underwriting
Agreement shall not be construed as an obligation of the Company
to sell any of the Securities or as an obligation of any of the
Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the
obligation of any of the Underwriters to purchase any of the
Securities shall be evidenced by the Pricing Agreement with
respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of
such Designated Securities, the public offering price of such
Designated Securities, the purchase price to the Underwriters of
such Designated Securities, the names of the Underwriters of such
Designated Securities, the principal amount of such
Designated Securities to be purchased by each Underwriter and the
commission payable to the Underwriters with respect thereto and
shall set forth the date, time and manner of delivery of such
Designated Securities and payment therefor. The Pricing
Agreement shall also describe, in a manner consistent with the
Indenture and the registration statement and prospectus with
respect thereto, the principal terms of such Designated
Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any
other rapid transmission device designed to produce a written
record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. Each of the Company and Sears, Roebuck and Co.
("Sears") represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement in respect of the
Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and
any post-effective amendment thereto, each in the form heretofore
delivered or to be delivered to you and, excluding exhibits to
such registration statement, but including all documents
incorporated by reference in the prospectus included therein, to
you for each of the other Underwriters have been declared
effective by the Commission in such form (any preliminary
prospectus included in such registration statement being
hereinafter called a "Preliminary Prospectus;" the various parts
of such registration statement, including all exhibits thereto
except Form T-1, each as amended at the time such part became
effective, being hereinafter collectively called the
"Registration Statement;" the prospectus relating to the
Securities, in the form in which it has most recently been filed
with the Commission on or prior to the date of this Agreement,
being hereinafter called the "Prospectus;" any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed
to include the documents, if any, incorporated by reference
therein pursuant to the applicable form under the Securities Act
of 1933, as amended (the "Act"), as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to include any
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and so incorporated by
reference; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated
Securities in the form in which it is first filed with the
Commission pursuant to Rule 424(b) of Regulation C under the Act,
including any documents incorporated by reference therein as of
the date of such filing);
(b) Except for statements in such documents which do
not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the Act and
after substituting therefor any statements modifying or
superseding such excluded statements (i) the documents
incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents, when
they became effective or were so filed, as the case may be,
contained, in the case of documents which became effective under
the Act, an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading, and, in the case
of documents which were filed under the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading, and (ii) any further documents so filed and
incorporated by reference when they become effective or are filed
with the Commission, as the case may be, will conform in all
material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain, in the case of
documents which become effective under the Act, an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of documents
which are filed under the Exchange Act with the Commission, an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated
Securities through you expressly for use therein; at the Time of
Delivery (as defined in Section 4 hereof), the Indenture will be
duly qualified under, and will conform in all material respects
to the requirements of, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"); and
(c) Except for statements in documents incorporated
therein by reference which do not constitute part of the
Registration Statement or the Prospectus pursuant to Rule 412 of
Regulation C under the Act and after substituting therefor any
statements modifying or superseding such excluded statements, the
Registration Statement and the Prospectus conformed, and any
amendments or supplements thereto will, when they become
effective or are filed with the Commission, as the case may be,
conform, in all material respects to the requirements of the Act
and the Trust Indenture Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and as
of the applicable filing date as to the Prospectus, contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by an
Underwriter of Designated Securities through you expressly for
use in the Prospectus as amended or supplemented relating to such
Securities.
3. The Company represents and warrants to, and agrees with
each of the Underwriters that:
(a) Upon payment therefor as provided herein, the
Securities will have been duly and validly authorized and
(assuming their due authentication by the Trustee) will have been
duly and validly issued and will be valid outstanding obligations
of the Company in accordance with their terms, except as the same
may be limited by insolvency, bankruptcy, reorganization, or
other laws relating to or affecting the enforcement of creditors'
rights or by general equity principles, and will be entitled to
the benefits of the Indenture; and
(b) The issue and sale of the Securities pursuant to
any Pricing Agreement and the compliance by the Company with all
of the provisions of the Securities, the Indenture, this
Agreement will not conflict with or result in any breach which
would constitute a material default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any of the property or assets of the Company material to the
Company pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money to which the
Company is a party or by which the Company may be bound or to
which any of the property or assets of the Company, material to
the Company, is subject, nor will such action result in any
material violation of the provisions of the Certificate of
Incorporation, as amended or the By-Laws of the Company or, to
the best of its knowledge, any statute or any order, rule or
regulation applicable to the Company of any court or any Federal,
State or other regulatory authority or other governmental body
having jurisdiction over the Company, and no consent, approval,
authorization or other order of, or filing with, any court or any
such regulatory authority or other governmental body is required
for the issue and sale of the Designated Securities except as may
be required under the Act, the Exchange Act, the Trust Indenture
Act and securities laws of the various states and other
jurisdictions in which the Underwriters will offer and sell the
Designated Securities.
4. Upon the execution of the Pricing Agreement applicable
to any Designated Securities and authorization by you of the
release of the Underwriters' Securities, the several Underwriters
propose to offer the Underwriters' Securities for sale upon the
terms and conditions set forth in the Prospectus as amended or
supplemented.
The principal amount of Contract Securities to be deducted
from the principal amount of Designated Securities to be
purchased by each Underwriter as set forth in Schedule I to the
Pricing Agreement applicable to such Designated Securities shall
be, in each case, the principal amount of Contract Securities
which the Company has been advised by you have been attributed to
such Underwriter, provided that, if the Company has not been so
advised, the amount of Contract Securities to be so deducted
shall be, in each case, that proportion of Contract Securities
which the principal amount of Designated Securities to be
purchased by such Underwriter under such Pricing Agreement bears
to the total principal amount of the Designated Securities
(rounded as you may determine to the nearest $1,000 principal
amount). The total principal amount of Underwriters' Securities
to be purchased by all the Underwriters pursuant to such Pricing
Agreement shall be the total principal amount of Designated
Securities set forth in Schedule I to such Pricing Agreement less
the principal amount of the Contract Securities. The
Company will deliver to you not later than 3:30 p.m., New York
time, on the third business day preceding the Time of Delivery
specified in the applicable Pricing Agreement (or such other time
and date as you and the Company may agree upon in writing) a
written notice setting forth the principal amount of Contract
Securities.
The Pricing Agreement applicable to any Designated
Securities may provide that the Company and any entity acting as
an underwriter with respect to such Designated Securities may
enter into a deferred pricing agreement in the form set forth in
a schedule attached to such Pricing Agreement.
5. Underwriters' Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto,
in definitive form to the extent practicable, and in such
authorized denominations and registered in such names as you may
request upon at least two business days prior notice to the
Company, shall be delivered by or on behalf of the Company to you
for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor, by
certified or official bank check or checks or wire transfer, as
specified in such Pricing Agreement, payable to the order of the
Company in the funds specified in such Pricing Agreement, all at
the place and time and date specified in such Pricing Agreement
or at such other place and time and date as you and the Company
may agree upon in writing, such time and date being herein
called the "Time of Delivery" for such Securities.
6. Each of the Company and Sears agrees with each of the
Underwriters of Designated Securities:
(a) To make no further amendment or any supplement to
the Registration Statement or the Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to
such Securities and prior to the Time of Delivery for such
Securities without first having furnished you with a copy of the
proposed form thereof and given you a reasonable opportunity to
review the same; to advise you promptly of any such amendment or
supplement after such Time of Delivery and furnish you with
copies thereof and to file promptly all reports and any
definitive proxy or information statements required to be filed
by the Company or Sears, respectively, with the Commission
pursuant to Section 13 or 14 of the Exchange Act for so long as
the delivery of a prospectus is required in connection with the
offering or sale of such Securities, and during such same period
to advise you, promptly after the Company or Sears receives
notice thereof, of the time when the Registration Statement, or
any amendment thereto, or any amended Registration Statement has
become effective or any supplement to the Prospectus or any
amended Prospectus has been filed, of the issuance by the
Commission of any stop order or of any order preventing or
suspending the use of any Prospectus, or the suspension of the
qualification of such Securities for offering or sale in any
jurisdiction, or the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or
Prospectus or for additional information; and in the event of the
issuance of any such stop order or of any such order
preventing or suspending the use of any such Prospectus or
suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as
you may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions
as you may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection
therewith neither the Company nor Sears shall be required to
qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the
Prospectus as amended or supplemented in such quantities as you
may from time to time reasonably request, and, if the delivery of
a prospectus is required at any time in connection with the
offering or sale of such Securities and if at such time any event
shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or, if for any other reason it shall
be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply
with the Act, the Exchange Act or the Trust Indenture Act, to
notify you and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct
such statement or omission or effect such compliance; and
(d) To make generally available to its security
holders, in accordance with the provisions of Rule 158 under the
Act or otherwise, as soon as practicable, but in any event not
later than forty-five days after the end of the fourth full
fiscal quarter (ninety days in the case of the last fiscal
quarter in any fiscal year) following the fiscal quarter ending
after the latest of (x) the effective date of the Registration
Statement, (y) the effective date of the post-effective amendment
thereto hereinafter referred to, and (z) the date of the filing
of the report hereinafter referred to, earnings statements of the
Company and Sears and its consolidated subsidiaries (which need
not be audited) complying with Section 11(a) of the Act and
covering a period of at least twelve consecutive months
beginning after the latest of (i) the effective date of such
Registration Statement, (ii) the effective date of the
post-effective amendment, if any, to such Registration Statement
(within the meaning of Rule 158) next preceding the date of the
Pricing Agreement relating to the Designated Securities and (iii)
the date of filing of the last report of the Company or Sears
incorporated by reference into the Prospectus (within the meaning
of Rule 158) next preceding the date of the Pricing Agreement
relating to the Designated Securities.
7. The Company agrees with each of the Underwriters of
Designated Securities:
(a) During the period beginning from the date of the
Pricing Agreement for such Designated Securities and continuing
to and including the earlier of (i) the termination of trading
restrictions for such Designated Securities, of which
termination you agree to give the Company prompt notice
confirmed in writing, and (ii) the Time of Delivery for such
Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company which
mature more than one year after such Time of Delivery and which
are substantially similar to such Designated Securities, without
your prior written consent, which consent shall not be
unreasonably withheld, except pursuant to arrangements of which
you have been advised by the Company prior to the time of
execution of such Pricing Agreement, which advice is confirmed in
writing to you by the end of the business day following the date
of such Pricing Agreement; and
(b) To pay or cause to be paid all expenses,
preapproved by the Company, incident to the performance of its
obligations hereunder and under any Pricing Agreement, including
the cost of all qualifications of the Securities under state
securities laws (including reasonable fees of counsel to the
Underwriters in connection with such qualifications and in
connection with legal investment surveys) and the cost of
printing this Agreement, any Pricing Agreement, and any blue sky
and legal investment
memoranda.
8. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such
Designated Securities shall be subject, in their discretion, to
the condition that all representations and warranties and other
statements of the Company or Sears herein are, at and as of the
Time of Delivery for such Designated Securities, true and
correct, the condition that each of the Company and Sears shall
have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your
reasonable satisfaction.
(b) All corporate proceedings and related matters in
connection with the organization of the Company, the validity of
the Indenture and the registration, authorization, issue, sale
and delivery of the Designated Securities shall have been
satisfactory to counsel to the Underwriters, and such counsel
shall have been furnished with such papers and information as
they may reasonably have requested to enable them to pass upon
the matters referred to in this subdivision (b).
(c) Counsel to the Company and Sears shall have
furnished to you such counsel's written opinion, dated the Time
of Delivery for such Designated Securities, in form and substance
satisfactory to you in your reasonable judgment, to the effect
that:
(i) Each of the Company and Sears has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its respective state of incorporation;
(ii) The authorized capital stock of the Company
consists of 500,000 shares of common stock, par value $100.00 per
share, all of the issued and outstanding shares of which are
owned by Sears, Roebuck and Co., and the authorized capital stock
of Sears is as set forth or incorporated by reference in the
Registration Statement;
(iii) SRAC is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended;
(iv) This Agreement and the Pricing Agreement with
respect to the Designated Securities have been duly authorized,
executed and delivered on the part of the Company and Sears;
(v) The issue and sale of the Designated
Securities and the compliance by the Company with all of the
provisions of the Designated Securities, the Indenture, this
Agreement and the Pricing Agreement with respect to the
Designated Securities will not (a) conflict with or result in any
breach which would constitute a material default under, or result
in the creation or imposition of any lien, charge or encumbrance
upon any of the property or assets of the Company material to the
Company, pursuant to the terms of, any indenture, loan agreement
or other agreement or instrument for borrowed money known to such
counsel to which the Company is a party or by which the Company
may be bound or to which any of the property or assets of the
Company material to the Company is subject, (b) result in any
material violation of the provisions of the Certificate of
Incorporation, as amended or the By-Laws of the Company or (c) to
the best of the knowledge of such counsel, result in any material
violation of any statute or any order, rule or regulation
applicable to the Company of any court or any Federal, State or
other regulatory authority or other governmental body having
jurisdiction over the Company, other than the Act, the Exchange
Act, the Trust Indenture Act and the rules and regulations
pursuant to each such act, and other than the securities laws of
the various states or other jurisdictions which are applicable to
the issue and sale of the Designated Securities; and, to the best
knowledge of such counsel, no consent, approval, authorization or
other order of, or filing with, any court or any such regulatory
authority or other governmental body is required for the issue
and sale of the Designated Securities except as may be required
under the Act, the Exchange Act, the Trust Indenture Act and
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Designated
Securities;
(vi) The Fixed Charge Coverage and Ownership
Agreement dated as of May 15, 1995 and the Extension Agreement
dated March 1, 1996 each between the Company and Sears have been
duly authorized, executed and delivered by the parties thereto
and are valid and binding instruments 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;
(vii) The Indenture has been duly authorized,
executed and delivered on the part of the Company and, as to the
Company, is a valid and binding instrument in accordance with its
terms except as the foregoing may be limited by insolvency,
bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general
equity principles, and has been qualified under the Trust
Indenture Act; the Underwriters' Securities have been duly
authorized and (assuming their due authentication by the
Trustee) have been duly executed, issued and delivered on the
part of the Company and constitute valid and binding obligations
of the Company in accordance with their terms, entitled to the
benefits of the Indenture, except as the same may be limited by
insolvency, bankruptcy, reorganization or other laws relating to
or affecting the enforcement of creditors' rights or by general
equity principles; the Contract Securities, if any, when
executed, authenticated, issued and delivered pursuant to the
Indenture, will constitute valid and binding obligations of the
Company in accordance with their terms, entitled to the benefits
of the Indenture, except as the foregoing may be limited by
insolvency, bankruptcy, reorganization or other laws relating to
or affecting the enforcement of creditors' rights or by general
equity principles;
(viii) Such counsel does not know of any
pending legal or governmental proceedings required to be
described in the
Prospectus as amended or supplemented which are not described as
required;
(ix) Except for statements in such documents which
do not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the Act and
after substituting therefor any statements modifying or
superseding such excluded statements, the documents incorporated
by reference in the Prospectus as amended or supplemented (other
than the financial statements and related schedules, the
analyses of operations and financial condition and other
financial, statistical and accounting data therein, as to which
such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder;
(x) Except for statements in such documents which
do not constitute part of the Registration Statement or the
Prospectus pursuant to Rule 412 of Regulation C under the Act and
after substituting therefor any statements modifying or
superseding such excluded statements, the Registration Statement
and the Prospectus as amended or supplemented (excluding the
documents incorporated by reference therein) (other than the
financial statements and related schedules, the analyses of
operations and financial condition and other financial,
statistical and accounting data therein as to which such counsel
need express no opinion) comply as to form in all material
respects with the requirements of the Act and the rules and
regulations thereunder; the answers in the Registration Statement
to Items 9 and 10 (insofar as it relates to such counsel) of Form
S-3 are to the best of such counsel's knowledge accurate
statements or summaries of the matters therein set forth and
fairly present the information called for with respect to those
matters by the Act and the rules and regulations thereunder; and
(xi) Such counsel does not know of any contract or
other document to which the Company or Sears or any subsidiary
thereof is a party required to be filed as an exhibit to the
Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or
required to be described in the Prospectus as amended or
supplemented which has not been so filed, incorporated by
reference or described.
In rendering such opinion, such counsel may rely to the
extent such counsel deems appropriate upon certificates of
officers or other executives of the Company, Sears and its
business groups and subsidiaries and of public officials as to
factual matters and upon opinions of other counsel. Such counsel
shall also state that: (a) nothing has come to such counsel's
attention which has caused such counsel to believe that any of
the documents referred to in subdivision (viii) above (other than
the financial statements, the analyses of operations and
financial condition and other financial, statistical and
accounting data therein, as to which such counsel need express no
belief), in each case after excluding any statement in any such
document which does not constitute part of the Registration
Statement or the Prospectus as amended or supplemented pursuant
to Rule 412 of Regulation C under the Act and after substituting
therefor any statement modifying or superseding such excluded
statement, when they became effective or were filed, as the case
may be, contained, in the case of documents which became
effective under the Act, an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and, in the case of documents which were filed under
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (b)
nothing has come to such counsel's attention which has
caused such counsel to believe that the Registration Statement or
the Prospectus as amended or supplemented (other than the
financial statements, the analyses of operations and financial
condition and other financial, statistical and accounting data
therein, as to which such counsel need express no belief)
contains an untrue statement of a material fact or omits to state
a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(d) At the Time of Delivery for such Designated
Securities, Deloitte & Touche shall have furnished you a letter
or letters, dated the date of delivery thereof in form and
substance satisfactory to you as to such matters as you may
reasonably request.
(e) (i) The Company shall not have sustained, since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus as amended or
supplemented any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree and (ii) since the
respective dates as of which information is given in the
Prospectus as amended or supplemented there shall not have been
any material change in the capital stock accounts or long-term
debt of the Company or any material adverse change in the
general affairs, financial position, stockholders' equity or
results of operations of the Company, otherwise than as set forth
or contemplated in the Prospectus as amended or
supplemented, the effect of which in any such case described in
clause (i) or (ii), in your judgment makes it impracticable or
inadvisable to proceed with the public offering or the delivery
of the Designated Securities on the terms and in the manner
contemplated in the Prospectus as amended or supplemented.
(f) Subsequent to the date of the Pricing Agreement
relating to the Designated Securities, no downgrading shall have
occurred in the rating accorded to the Company's or Sears senior
debt securities by Moody's Investors Service, Inc. or Standard &
Poor's Corporation; provided, however, that this subdivision (f)
shall not apply to any such rating agency which shall have
notified you of the rating of the Designated Securities prior to
the execution of the Pricing Agreement.
(g) Subsequent to the date of the Pricing Agreement
relating to the Designated Securities neither (i) the United
States shall have become engaged in the outbreak or escalation of
hostilities involving the United States or there has been a
declaration by the United States of a national emergency or a
declaration of war, (ii) a banking moratorium shall have been
declared by either Federal or New York State authorities, nor
(iii) trading in securities generally on the New York Stock
Exchange shall have been suspended nor limited or minimum prices
shall have been established by such Exchange, any of which
events, in your judgment, renders it inadvisable to proceed with
the public offering or the delivery of the Designated Securities.
(h) Each of the Company and Sears shall have furnished
or caused to be furnished to you at the Time of Delivery for the
Designated Securities certificates satisfactory to you as to the
accuracy at and as of such Time of Delivery of the
representations, warranties and agreements of the Company and
Sears, respectively, herein and as to the performance by each of
the Company and Sears of all its obligations hereunder to be
performed at or prior to such Time of Delivery and the Company
shall have also furnished you similar certificates satisfactory
to you as to the matters set forth in subdivision (a) of this
Section 8.
9. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, any prospectus relating
to the Securities or the Prospectus as amended or supplemented,
or any amendment or supplement thereto furnished by the Company
or Sears, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or (in the case of the Registration Statement or
the Prospectus as amended or supplemented, or any amendment or
supplement thereto) necessary to make the statements therein not
misleading or (in the case of any Preliminary Prospectus)
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with
investigating or defending any such action or claim; provided,
however, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement, the Prospectus or the
Prospectus as amended or supplemented or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of
Designated Securities through you expressly for use in the
Prospectus as amended or supplemented relating to such
Securities; and provided, further, that the Company shall not be
liable to any Underwriter or any person controlling such
Underwriter under the indemnity agreement in this subdivision (a)
with respect to the Preliminary Prospectus or the Prospectus or
the Prospectus as amended or supplemented, as the case may be, to
the extent that any such loss, claim, damage or liability of such
Underwriter or controlling person results solely from the fact
that such Underwriter sold Designated Securities to a person to
whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding
documents incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents incorporated by
reference) if the Company has previously furnished copies thereof
to such Underwriter.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus or the Prospectus as
amended or supplemented, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or (in the case of the Registration Statement or the
Prospectus or the Prospectus as amended or supplemented, or any
amendment or supplement thereto) necessary to make the
statements therein not misleading or (in the case of any
Preliminary Prospectus) necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus or the
Prospectus as amended or supplemented, or any such amendment or
supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through
you expressly for use therein; and will reimburse the Company for
any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending any such
action or claim.
(c) Within a reasonable period after receipt by an
indemnified party under subdivision (a) or (b) above of notice of
the commencement of any action with respect to which
indemnification is sought under such subdivision or contribution
may be sought under subdivision (d) below, such indemnified party
shall notify the indemnifying party in writing of the
commencement thereof. In case any such action shall be brought
against any indemnified party, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subdivision (a) or
(b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
Underwriters of the Designated Securities on the other from the
offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates and
also the relative fault of the Company and Sears on the one hand
and the Underwriters of the Designated Securities on the other in
connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on
the one hand and such Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by
such Underwriters, in each case as set forth on the cover page of
the Prospectus as amended or supplemented. The relative fault
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or Sears on the one hand or
the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission of the Company or Sears on the
one hand and the Underwriters, directly or through you, on the
other hand. With respect to any Underwriter, such relative fault
shall also be determined by reference to the extent (if any) to
which such losses, claims, damages or liabilities (or actions in
respect thereof) with respect to any Preliminary Prospectus
result from the fact that such Underwriter sold Designated
Securities to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of
the Prospectus as then amended or supplemented (excluding
documents incorporated by reference) if the Company has
previously furnished copies thereof to such Underwriter. The
Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subdivision (d) were
determined by per capita allocation among the indemnifying
parties (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in
this subdivision (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in
this subdivision (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subdivision (d),
no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
applicable Designated Securities underwritten by it and
distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this
subdivision (d) to contribute are several in proportion to their
respective underwriting obligations with respect to such
securities and not joint.
(e) The obligations of the Company under this Section 9
shall be in addition to any liability which the Company may
otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the
Underwriters under this Section 9 shall be in addition to any
liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each
officer and director of the Company or Sears and to each person,
if any, who controls the Company within the meaning of the Act.
10. (a) If any Underwriter shall default in its obligation
to purchase the Underwriters' Securities which it has agreed to
purchase under the Pricing Agreement relating to such
Securities, you may in your discretion arrange for yourselves or
another party or other parties to purchase such Designated
Securities on the terms contained herein. If within thirty-six
hours after such default by any Underwriter you do not arrange
for the purchase of such Designated Securities, then the Company
shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties to purchase such
Designated Securities on such terms. In the event that, within
the respective prescribed periods, you notify the Company that
you have so arranged for the purchase of such Designated
Securities, or the Company notifies you that it has so arranged
for the purchase of such Designated Securities, you or the
Company shall have the right to postpone the Time of Delivery for
such Designated Securities for a period of not more than seven
days, in order to effect whatever changes may thereby be made
necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or
arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the
Prospectus which may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such
person had originally been a party to the Pricing Agreement with
respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Underwriters' Securities of a defaulting
Underwriter or Underwriters by you and the Company as provided in
subdivision (a) above, the aggregate principal amount of such
Underwriters' Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of the
Designated Securities, then the Company shall have the right to
require each non-defaulting Underwriter to purchase the
principal amount of Underwriters' Securities which such
Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Securities and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of Designated Securities
which such Underwriter agreed to purchase under such Pricing
Agreement) of the Underwriters' Securities of such defaulting
Underwriter or Underwriters for which such arrangements have not
been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Underwriters' Securities of a defaulting
Underwriter or Underwriters by you and the Company as provided in
subdivision (a) above, the aggregate principal amount of
Underwriters' Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of the Designated
Securities, as referred to in subdivision (b) above, or if the
Company shall not exercise the right described in subdivision (b)
above to require non-defaulting Underwriters to purchase
Underwriters' Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such
Designated Securities shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the
Company, except for the expenses to be borne by the Company and
the Underwriters as provided in Section 7(b) hereof and the
indemnity and contribution agreements in Section 9 hereof; but
nothing herein shall relieve a defaulting Underwriter from
liability for its default.
11. The respective indemnities, agreements,
representations, warranties and other statements of the Company,
Sears and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, the Company, Sears or any
officer or director or controlling person of the Company or
Sears, and shall survive delivery of and payment for the
Securities.
Anything herein to the contrary notwithstanding, the
indemnity agreement of the Company in subdivisions (a) and (e) of
Section 9 hereof, the representations and warranties in
subdivisions (b) and (c) of Section 2 hereof and any
representation or warranty as to the accuracy of the Registration
Statement or the Prospectus as amended or supplemented contained
in any certificate furnished by the Company or Sears pursuant to
subdivision (h) of Section 8 hereof, insofar as they may
constitute a basis for indemnification for liabilities (other
than payment by the Company of expenses incurred or paid in the
successful defense of any action, suit or proceeding) arising
under the Act, shall not extend to the extent of any interest
therein of an Underwriter or a controlling person of an
Underwriter if a director, officer or controlling person of the
Company or Sears when the Registration Statement becomes
effective or a person who, with his consent, is named in the
Registration Statement as being about to become a director of the
Company or Sears, is a controlling person of such
Underwriter, except in each case to the extent that an interest
of such character shall have been determined by a court of
appropriate jurisdiction as not against public policy as
expressed in the Act. Unless in the opinion of counsel for the
Company or Sears the matter has been settled by controlling
precedent, the Company or Sears will, if a claim for such
indemnification is asserted, submit to a court of appropriate
jurisdiction the question whether such interest is against
public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
12. If any Pricing Agreement shall be terminated pursuant
to Section 10 hereof, the Company shall not then be under any
liability to any Underwriter with respect to the Designated
Securities covered by such Pricing Agreement except as provided
in Section 7(b) and Section 9 hereof; but, if for any other
reason Underwriters' Securities are not delivered by or on
behalf of the Company as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket
expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Company shall
then be under no further liability to any Underwriter with
respect to such Designated Securities except as provided in
Section 7(b) and Section 9 hereof.
13. In all dealings hereunder, you shall act on behalf of
each of the Underwriters of Designated Securities, and the
parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any
Underwriter made or given by you or by 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 1585 Broadway, New York, New York 10036, and
if to the Company shall be sufficient in all respects if
delivered or sent by registered mail to the Company at 3711
Kennett Pike, Greenville, Delaware 19807, Attention: Richard F.
Kotz, Secretary; and if to Sears shall be sufficient in all
respects if delivered or sent by registered mail to Sears at 3333
Beverly Road, Hoffman Estates, Illinois 60179, Attention: Michael
D. Levin, 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/Stephen D. Carp
Sears, Roebuck and Co.
By: Alice M. Peterson
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By: /S/Morgan Stanley & Co. Incorporated
Principal
/S/Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /S/Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Managing Director
SALOMON BROTHERS INC
By: /S/Salomon Brothers Inc
Vice President
On behalf of each of the Underwriters
<PAGE>
ANNEX I
PRICING AGREEMENT
As [Representatives of] the several
Underwriters named in Schedule 1 hereto
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
,199
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company"), proposes subject to the terms and conditions stated
herein and in the Underwriting Agreement, dated ,
199 (the "Underwriting Agreement"), executed between the
Company and Sears, Roebuck and Co. ("Sears"), on the one hand,
and on the other hand, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities").
Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be
deemed to be a part of this agreement to the same extent as if
such provisions had been set forth in full herein; and each of
the representations and warranties set forth therein shall be
deemed to have been made at and, except where otherwise
specified, as of the date of this Pricing Agreement, except that
each representation and warranty with respect to the Prospectus
in Sections 2 and 3 of the Underwriting Agreement shall be deemed
to be a representation and warranty as of the date of the
Underwriting Agreement in relation to the Prospectus (as therein
defined) and also a representation and warranty as of the date of
this Pricing Agreement in relation to the Prospectus as amended
or supplemented. Unless otherwise defined herein, terms defined
in the Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement
to the Prospectus, as the case may be, relating to the Designated
Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the
Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the time and place and at a
purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon
acceptance hereof by you on behalf of each of the Underwriters,
this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between the Company, Sears
and each of the Underwriters. It is understood that your
acceptance of this letter on behalf of each of the Underwriters
is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be supplied to the
Company upon request. You represent that you are authorized on
behalf of yourselves and on behalf of each of the other
Underwriters named in Schedule I hereto to enter into this
Agreement.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted as of the date hereof:
By:___________________________________________________
By:____________________________________________________
By:_____________________________________________________
On behalf of each of the Underwriters
[On behalf of each of the Underwriters]
<PAGE>
SCHEDULE I
Principal Amount of Designated Securities to be
Underwriter Purchased
$
Total . . . . . . . . . . . . . .
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate principal amount:
$
Price to Public:
% of the principal amount of the Designated Securities, plus
accrued interest from to the Time of Delivery [and accrued
amortization, if any, from to the Time of Delivery]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus
accrued interest from to the Time of Delivery [and accrued
amortization, if any, from to the Time of Delivery]
Indenture:
Indenture, dated , between the Company and
, as Trustee
Form of Designated Securities:
[Certificated form only] [Global form only]
Maturity: 1
Interest Rate:*
[ %] [Zero Coupon]
Interest Payment dates:*
[months and dates]
Redemption Provisions:*
[No provision for redemption]
[The Designated Securities may be redeemed, otherwise than
through the sinking fund, in whole or in part at the option of
the Company, in the amount of $ or an integral multiple
thereof, [on or after , at the following
redemption prices (expressed in percentages of principal amount).
If [redeemed on or before , %, and if] redeemed
during the 12-month period beginning ,
Year Redemption Price and thereafter at 100% of their
principal amount, together in each case with accrued interest to
the redemption date.]
[on any interest payment date falling on or after ,
, at the election of the Company, at a redemption price equal
to the principal amount thereof, plus accrued interest to the
date of redemption.]
[Other possible redemption provisions, such as mandatory
redemption upon occurrence of certain events or redemption for
changes in tax law]
[Restriction of refunding]
Sinking Fund Provisions: 2
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a
sinking fund to retire $ principal amount of
Designated Securities on in each of the years
through at 100% of their principal amount plus accrued
interest] [, together with (cumulative) (non-cumulative)
redemptions at the option of the Company to retire an additional
$ principal amount of Designated Securities in the years
through at 100% of their principal amount plus accrued
interest].
Time of Delivery:
[ ] A.M., New York time, [ ] ,19
Funds in which payment by Underwriters to Company to be made:
[ ] Clearing House Funds
[ ] Same day funds
Method of Payment:
[Certified or official bank check or checks]
[Wire transfer to ]
Closing Location:
Counsel:
To the Company, [ ]
To Sears, [ ]
To the Underwriters, [ ]
[Other Terms]: 3
1 The terms of an attached form of security may be incorporated
by reference.
2 The terms of an attached form of security may be incorporated
by reference.
3 The terms of an attached form of security may be incorporated
by reference.
Exhibit 4
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
6.90% Note due August 1, 2003
6.90% 6.90%
Due 2003 Due 2003
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 first day of
August, 2003, 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 6.90% 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 February
1 or August 1, 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 February
1, 1997, in which case from August 9, 1996), semiannually,
commencing on February 1, 1997, on February 1 and August 1, until
payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if this Note is
dated after any January 15 and before the following February 1,
or after any July 15 and before the following August 1, then this
Note shall bear interest from such following February 1 or August
1, provided, however, that if the Company shall default in the
payment of interest due on such following February 1 or August 1,
this Note shall bear interest from the next preceding February 1
or August 1 to which interest has been paid on such Notes, or if
no interest has been paid on such Notes, then from August 9,
1996. The interest so payable on any February 1 or August 1
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
January 15 prior to such February 1 or the July 15 prior to such
August 1. 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.
6.90% Note due August 1, 2003
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 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 "6.90% Notes due August 1, 2003" 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.
Exhibit 5
[Robert J. Pence Letterhead]
August 9, 1996
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 to the
Pricing Agreement dated
August 2, 1996
c/o Morgan Stanley & Co.
1585 Broadway
New York, NY 10036
Ladies and Gentlemen:
I am a Vice President, Law of Sears, Roebuck and Co.
("Sears"). Sears Law Department, under my supervision, has acted
as counsel to Sears and Sears Roebuck Acceptance Corp. ("SRAC")
in connection with the registration under the Securities Act of
1933, as amended (the "Act"), and the public offering of an
aggregate of $250,000,000 in principal amount of SRAC's 6.90%
Notes due August 1, 2003 (the "Notes"). You are purchasing the
Notes to be sold to the public in accordance with the terms of
(i) the Pricing Agreement dated August 2, 1996 among Sears, SRAC
and you, as the several Underwriters named in Schedule I thereto
(the "Pricing Agreement"), and (ii) the Underwriting Agreement
dated August 2, 1996 among Sears, SRAC and Morgan Stanley & Co.
Incorporated, Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated and Salomon Brothers Inc (the "Underwriting
Agreement"). This opinion is rendered to you pursuant to Section
8(c) of the Underwriting Agreement. All terms not otherwise
defined herein have the meanings ascribed to them in the
Underwriting Agreement.
I have made such legal and factual examinations and
inquiries, including discussions with the Senior Vice President,
General Counsel and Secretary of Sears and an examination of
originals or copies certified or otherwise identified to my
satisfaction, of such documents, corporate records and other
instruments as I have deemed necessary or appropriate for the
purposes of this opinion.
I have obtained and relied upon, to the extent I deem
appropriate, certificates of officers and other executives of
Sears and SRAC and of public officials as to factual matters and
opinions of other counsel. I call your attention to the fact
that, in rendering my opinion, I am expressing my views only as
to the laws of the State of Illinois and the Federal statutes of
the United States of America (except as to the matters below
which are governed in part by the laws of the State of Delaware
and the state of New York, relating to the due incorporation and
valid existence in good standing of SRAC and Sears, respectively,
the due authorization, execution and delivery by SRAC and Sears,
respectively, of certain documents, and the absence of any
material violation of the provisions of the Certificate of
Incorporation or By-Laws of SRAC and Sears).
On the basis of the foregoing and in reliance thereon,
I am of the opinion that, as of the date hereof:
(i) Each of SRAC 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 SRAC 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, 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) The Underwriting Agreement and the Pricing
Agreement have been duly authorized, executed and delivered
on the part of each of Sears and SRAC;
(v) The issue and sale of the Notes and the compliance
by SRAC with all of the provisions of the Notes, the
Indenture, the Underwriting Agreement and the Pricing
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 SRAC,
material to SRAC, pursuant to the terms of, any indenture,
loan agreement or other agreement or instrument for borrowed
money known to me to which SRAC is a party or by which SRAC
may be bound or to which any of the property or assets of
SRAC material to SRAC is subject, (b) result in any material
violation of the provisions of the Restated Certificate of
Incorporation or the By-Laws of SRAC, or (c) to the best of
my knowledge, result in any material violation of any
statute or any order, rule or regulation applicable to SRAC
of any court or any Federal, State or other regulatory
authority or other governmental body having jurisdiction
over SRAC, other than the Act, the Exchange Act, the Trust
Indenture Act and the rules and regulations under each such
act, and other than the securities laws of the various
states or other jurisdictions which are applicable to the
issue and sale of the Notes; and, to the best of my
knowledge, 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 SRAC and, as to SRAC, 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 their due authentication by the Trustee) have been
duly executed, issued and delivered on the part of SRAC and
constitute valid and binding obligations of SRAC 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;
(vii) The Fixed Charge Coverage and Ownership
Agreement and the Extension Agreement have been duly
authorized, executed and delivered by the parties thereto
and are valid and binding instruments 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;
(viii) I do 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 I express no opinion), when they
were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act
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 I 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 me) of Form S-3 are to the best of my 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) I do not know of any contract or other document
to which SRAC 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.
With respect to the statements of belief set forth
below, I have not independently verified the accuracy,
completeness or fairness of the statements contained in either
the Registration Statement or the Prospectus as amended or
supplemented (including, in each case, the documents incorporated
by reference therein) and the limitations inherent in the
examination made by me and the knowledge available to me are such
that I am unable to assume, and I do not assume, any
responsibility for the accuracy, completeness or fairness of any
of the statements contained therein. I confirm, however, (1)
that as a result of (a) the examinations made by me as described
above, (b) participation by me in conferences with
representatives of Sears and SRAC, including conferences in which
you and your counsel participated, at which conferences the
contents of the Registration Statement, the Prospectus as amended
or supplemented, the Indenture, the Notes, the Underwriting
Agreement and the Pricing Agreement and related matters were
discussed, and (c) participation by me in conferences with
representatives of Sears (including its Senior Vice President,
General Counsel and Secretary) and SRAC at which the documents
referred to in paragraph (ix) above were discussed, and (2) in my
capacity as Vice President, Law of Sears: (a) nothing has come to
my attention which has caused me to believe that any of the
documents referred to in paragraph (ix) above (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 I 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 were filed, contained 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 my attention which has caused me to believe
that the Registration Statement or 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 I 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.
In rendering my opinion, I have assumed that the
Indenture, the Underwriting Agreement and the Pricing Agreement
have been duly authorized, executed and delivered by the parties
thereto other than Sears and SRAC and that the signatures (other
than those on behalf of Sears and SRAC) on all documents examined
by me are genuine, assumptions which I have not independently
verified.
This opinion is furnished by me as counsel for Sears
and SRAC to you as the several Underwriters, and is solely for
your benefit, and is not to be otherwise used, circulated or
relied upon without my express written consent.
Very truly yours,
/S/Robert J. Pence
