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):
May 13, 1997
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 May 13, 1997, Registrant executed a Pricing
Agreement with Morgan Stanley & Co. Incorporated, Goldman, Sachs
& Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
J.P. Morgan Securities Inc. (the "Pricing Agreement"), as the
several underwriters named therein, relating to $300,000,000
aggregate principal amount of Registrant's 6.95% Notes due May
15, 2002 pursuant to an Underwriting Agreement executed May 13,
1997, with Morgan Stanley & Co. Incorporated, Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P.
Morgan Securities Inc., relating to debt securities.
On June 13, 1997, Registrant executed a Distribution
Agreement with Goldman, Sachs & Co, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Morgan Stanely & Co. Incorporated and
Salomon Brothers Inc, as Agents, relating to the establishment of
Medium-Term Notes Series IV in an aggregate principal amount not
to exceed $1,750,000,000.
On June 25, 1997, Registrant executed a Pricing
Agreement with Goldman, Sachs & Co. (the "Pricing Agreement"), as
representative of the several underwriters named therein,
relating to $500,000,000 aggregate principal amount of
Registrant's 7% Notes due June 15, 2007 pursuant to an
Underwriting Agreement executed June 25, 1997, with Goldman,
Sachs & Co., relating to debt securities.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
Exhibit No.
1.1 Pricing Agreement, dated May 13, 1997, among
Registrant, Sears, Roebuck and Co., Morgan Stanley &
Co. Incorporated, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc.
1.2 Underwriting Agreement, dated May 13, 1997, among
Registrant, Sears, Roebuck and Co., Morgan Stanley &
Co. Incorporated, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc.
1.3 Distribution Agreement, dated June 13, 1997, among
Registrant, Sears, Roebuck and Co., Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and
Salomon Brothers Inc
1.4 Pricing Agreement, dated June 25, 1997, among
Registrant, Sears, Roebuck and Co. and Goldman, Sachs &
Co.
1.5 Underwriting Agreement, dated June 25, 1997, among
Registrant, Sears, Roebuck and Co. and Goldman, Sachs &
Co.
4.1 Form of 6.95% Note.
4.2 Form of Fixed Rate Medium-Term Note Series IV
4.3 Form of Floating Rate Medium-Term Note Series IV
4.4 Form of 7% Note
5 Opinion of Nancy K. Bellis dated July 9, 1997, relating
to the validity of $300,000,000 aggregate principal
amount of 6.95% Notes due May 15, 2002, Medium-Term
Notes Series IV and $500,000,000 aggregate principal
amount of 7% Notes due June 15, 2007.
8 Opinion of Baker & McKenzie, special tax counsel to
Registrant.
23 Consent of Nancy K. Bellis (included in Exhibit 5).
99.1 Letter of Representations among Registrant, The Chase
Manhattan Bank, as trustee, and The Depository Trust
Company relating to Medium-Term Notes Series IV.
99.2 Letter of Representations among Registrant, The Chase
Manhattan Bank, as trustee, and The Depository Trust
Company relating to $500,000,000 aggregate principal
amount of 7% Notes due June 15, 2007.
<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: July 9, 1997 By:_/S/ Keith E. Trost__________
KEITH E. TROST
President
<PAGE>
EXHIBIT INDEX
Exhibit No.
1.1 Pricing Agreement, dated May 13, 1997, among
Registrant, Sears, Roebuck and Co., Morgan Stanley &
Co. Incorporated, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc.
1.2 Underwriting Agreement, dated May 13, 1997, among
Registrant, Sears, Roebuck and Co., Morgan Stanley &
Co. Incorporated, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan
Securities Inc.
1.3 Distribution Agreement, dated June 13, 1997, among
Registrant, Sears, Roebuck and Co., Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and
Salomon Brothers Inc
1.4 Pricing Agreement, dated June 25, 1997, among
Registrant, Sears, Roebuck and Co. and Goldman, Sachs &
Co.
1.5 Underwriting Agreement, dated June 25, 1997, among
Registrant, Sears, Roebuck and Co. and Goldman, Sachs &
Co.
4.1 Form of 6.95% Note.
4.2 Form of Fixed Rate Medium-Term Note Series IV
4.3 Form of Floating Rate Medium-Term Note Series IV
4.4 Form of 7% Note
5 Opinion of Nancy K. Bellis dated July 9, 1997, relating
to the validity of $300,000,000 aggregate principal
amount of 6.95% Notes due May 15, 2002, Medium-Term
Notes Series IV and $500,000,000 aggregate principal
amount of 7% Notes due June 15, 2007.
8 Opinion of Baker & McKenzie, special tax counsel to
Registrant.
23 Consent of Nancy K. Bellis (included in Exhibit 5).
99.1 Letter of Representations among Registrant, The Chase
Manhattan Bank, as trustee, and The Depository Trust
Company relating to Medium-Term Notes Series IV.
99.2 Letter of Representations among Registrant, The Chase
Manhattan Bank, as trustee, and The Depository Trust
Company relating to $500,000,000 aggregate principal
amount of 7% Notes due June 15, 2007.
Exhibit 1.1
PRICING AGREEMENT
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J. P. MORGAN SECURITIES INC.
As the several Underwriters named
in Schedule I hereto
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
May 13, 1997
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 May 13, 1997
(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 J. P. Morgan Securities
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/ KEITH E. TROST
SEARS, ROEBUCK AND CO.
By: /S/ ALICE M. PETERSON
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By: /S/ HAROLD HENDERSHOT
Principal
/S/ GOLDMAN, SACHS & CO.
. . . . . . . . . . . . . . . . . . . . . . . .
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED
By: /S/ SCOTT PRIMROSE
Managing Director
J. P. Morgan Securities Inc.
By: __/S/ T. KELLEY MILLET_________________
<PAGE>
SCHEDULE I
Underwriter
Principal Amount of
Designated Securities to be
purchased
Morgan Stanley & Co. Incorporated $ 75,000,000
Goldman, Sachs & Co. $ 75,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 75,000,000
J. P. Morgan Securities Inc. 75,000,000
Total $300,000,000
<PAGE>
SCHEDULE II
Title of Designated Securities:
6.95% Notes due May 15, 2002
Aggregate principal amount:
$300,000,000
Price to Public:
99.808% of the principal amount of
the Designated Securities, plus accrued
interest from May 16, 1997 to the Time of
Delivery
Purchase Price by Underwriters:
99.258% of the principal amount of the
Designated Securities, plus accrued
interest from May 16, 1997 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, May 16, 1997
Funds in which payment by Underwriters to Company to be made:
Same day funds
Method of Payment:
Wire transfer to The Chase Manhattan Bank, for the Account
of Sears Roebuck Acceptance
Corp., Account No. 900-9000317
Closing Location:
Chicago, Illinois and Delaware
1 Incorporated by reference to attached form of security.
<PAGE>
Delayed Delivery: None
Counsel:
To the Company and Sears, Nancy K. Bellis, Assistant
General Counsel-Corporate & Securities,
Sears, Roebuck and Co.
To the Underwriters, Cleary, Gottlieb, Steen & Hamilton
<PAGE>
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
6.95% Note due May 15, 2002
6.95% 6.95%
Due 2002 Due 2002
Sears Roebuck Acceptance Corp., a corporation organized and
existing under the laws of the State of Delaware (hereinafter
called the "Company"), for value received, hereby promises to
pay to , or registered assigns,
the principal sum of Dollars upon
presentation and surrender of this Note, on the fifteenth day of
May, 2002, 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, 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 6.95% 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 November 15 or May
15, as the case may be, next preceding the date hereof to which
interest has been paid on the Notes referred to on the reverse
hereof (unless the date hereof is the date to which interest has
been paid on such Notes, in which case from the date hereof, or
unless the date hereof is prior to November 15, 1997, in which
case from May 16, 1997), semiannually, commencing on November
15, 1997, on November 15 and May 15, until payment of said
principal sum has been made or duly provided for.
Notwithstanding the foregoing, if this Note is dated after any
November 1 and before the following November 15, or after any
May 1 and before the following May 15, then this Note shall bear
interest from such following November 15 or May 15, provided,
however, that if the Company shall default in the payment of
interest due on such following November 15 or May 15, this Note
shall bear interest from the next preceding November 15 or May
15 to which interest has been paid on such Notes, or if no
interest has been paid on such Notes, then from May 16, 1997.
The interest so payable on any November 15 or May 15 will,
subject to certain exceptions provided in the Indenture referred
to on the reverse hereof, be paid to the person in whose name
this Note is registered at the close of business on the November
1 prior to such November 15 or the May 1 prior to such May 15.
Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the registered holder on
such Interest Payment Date, and may be paid to the Person in
whose name this Note is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice of which shall be given to
Noteholders not less than 10 days prior to such Special Record
Date, or may be paid, at any time in any other lawful manner,
all as more fully provided in such Indenture.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, and such further provisions
shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof or any indenture
supplemental thereto, or become valid or obligatory for any
purpose, until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under such
Indenture.<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated: ........................................
Sears Roebuck Acceptance Corp.
By_______________________________________
President
By _______________________________________
Vice President 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
as Trustee
`
By:
Authorized Officer<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
SEARS ROEBUCK ACCEPTANCE CORP.
6.95% Note due May 15, 2002
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 "6.95% Notes due May 15, 2002" of the Company,
limited in aggregate principal amount to $300,000,000
(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 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.
The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the
registered Holder hereof as the absolute owner hereof (whether
or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon by anyone other
than the Company or any Security registrar) for the purpose of
receiving payment of or on account of the principal hereof and
interest hereon and for all other purposes, and neither the
Company, the Trustee, an Authenticating Agent, a paying agent
nor Security registrar shall be affected by any notice to the
contrary. All such payments shall be valid and effectual to
satisfy and discharge the liability upon this Note to the extent
of the sum or sums so paid.
No recourse shall be had for the payment of the principal
of or the interest on this Note or for any claim based hereon or
otherwise in any manner in respect hereof, or in respect of the
Indenture, against any incorporator, shareholder, officer or
director, past, present or future, of the Company or of any
predecessor or successor corporation, whether by virtue of any
constitutional provision or statute or rule of law, or by the
enforcement of any assessment or penalty or in any other manner,
all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue
hereof. In the event of any sale or transfer of its assets and
liabilities substantially as an entirety to a successor
corporation, the predecessor corporation may be dissolved and
liquidated as more fully set forth in the Indenture.
Exhibit 1.2
UNDERWRITING AGREEMENT
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
May 13, 1997
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 5 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 and 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 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, earning 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 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;
(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;
(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 it became effective or was 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 LLP, certified auditors, 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; 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 none of (i) the United
States shall have become engaged in the outbreak or escalation of
hostilities involving the United States or there has been a
declaration by the United States of a national emergency or a
declaration of war, (ii) a banking moratorium shall have been
declared by either Federal or New York State authorities, or
(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,
Attention: Hal Hendershot; 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: Nancy K. Bellis, Secretary; and if to Sears
shall be sufficient in all respects if delivered or sent by
registered mail to Sears at 3333 Beverly Road, Hoffman Estates,
Illinois, Attention: Michael D. Levin, Senior Vice President,
General Counsel and Secretary.
14. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the
Underwriters, the Company, Sears and, to the extent provided in
Section 9 and Section 11 hereof, the officers and directors of
the Company and Sears and each person who controls the Company or
any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of
the Securities from any Underwriter shall be deemed a successor
or assign by reason merely of such purchase.
15. Time shall be of the essence of each Pricing
Agreement.
16. This Agreement and each Pricing Agreement shall be
governed by, and construed in accordance with, the internal laws
of the State of New York.
17. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto and thereto in
any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together
constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return two counterparts hereof.
Very truly yours,
Sears Roebuck Acceptance Corp.
By: /S/ KEITH E. TROST
Sears, Roebuck and Co.
By: /S/ ALICE M. PETERSON
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By: __/S/ HAROLD HENDERSHOT____________
Principal
/S/ GOLDMAN, SACHS & CO.
.............................................
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCOPORATED
By:__/S/ SCOTT PRIMROSE_________________
Managing Director
J.P. MORGAN SECURITIES INC.
By: ___T. KELLEY MILLET__________________
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
J.P. MORGAN SECURITIES INC.
As [Representatives of] the several
Underwriters named in Schedule I 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, less
the principal amount of Designated Securities covered by Delayed
Delivery Contracts, if any, as may be specified in such Schedule
II.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon
acceptance hereof by you on behalf of each of the Underwriters,
this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between the Company, Sears
and each of the Underwriters. It is understood that your
acceptance of this letter on behalf of each of the Underwriters
is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be supplied to the
Company upon request. You represent that you are authorized on
behalf of yourselves and on behalf of each of the other
Underwriters named in Schedule I hereto to enter into this
Agreement.
Very truly yours,
Sears Roebuck Acceptance Corp.
By:
Sears, Roebuck and Co.
By:
Accepted as of the date hereof:
MORGAN STANLEY & CO. INCORPORATED
By: ___________________________________
Principal
..............................................
(Goldman, Sachs & Co.)
MERRILL LYNCH, PIERCE,
FENNER & SMITH INCOPROATED
By:_____________________________________
Managing Director
J. P. MORGAN SECURITIES INC.
By: _____________________________________
<PAGE>
SCHEDULE I
Principal Amount
of Designated
Securities to be
Purchased
Underwriter
Morgan Stanley & Co. Incorporated . . . . . . . . . . . .. . ..
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . .
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . .
J.P. Morgan Securities Inc. . . . . . . . . . . . . . . . . .
___________________
$
Total . . . . . . . . . . . . . . . .
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate principal amount:
$
Price to Public:
% of the principal amount of
the Designated Securities, plus accrued
interest from to the Time of
Delivery [and accrued amortization,
if any, from to the Time
of Delivery]
Purchase Price by Underwriters:
% of the principal amount of the
Designated Securities, plus accrued
interest from to the Time of
Delivery [and accrued amortization,
if any, from to the Time
of Delivery]
Indenture:
Indenture, dated , between
the Company and , as Trustee
Form of Designated Securities:
[Certificated form only][Global form only]
Maturity: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
1 The terms of an attached form of security may be incorportated
by reference.<PAGE>
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:
Delayed Delivery:
[None] [Underwriters are authorized to solicit Delayed
Delivery Contracts relating to a maximum of $ in
aggregate
principal amount of the Designated Securities. Underwriters'
commission shall be % of the principal amount of Designated
Securities for which Delayed Delivery Contracts have been
entered into. Such commission shall be payable to the order of
.]
[Certified or official bank check or checks]
[Wire transfer to ]
Counsel:
To the Company, [ ]
To Sears, [ ]
To the Underwriters, [ ]
[Other Terms]:2
1 Ther terms of an attached form of security may be incorporated
by reference.
2 Ther terms of an attached form of security may be incorporated
by reference.
<PAGE>
ANNEX II
DELAYED DELIVERY CONTRACT
SEARS ROEBUCK ACCEPTANCE CORP.,
c/o
Attention:
,199
Attention:
Dear Sirs:
The undersigned hereby agrees to purchase from Sears
Roebuck Acceptance Corp. (hereinafter called the "Company"), and
the
Company agrees to sell to the undersigned,
$
principal amount of the Company's [Title of Designated
Securities] (hereinafter called the "Designated Securities"),
offered by the Company's Prospectus dated , 199 as amended
or supplemented, receipt of a copy of which is hereby
acknowledged, at a purchase price of % of the principal
amount thereof, plus accrued interest from the date from which
interest accrues as set forth below, and on the further terms
and conditions set forth in this contract.
[The undersigned will purchase the Designated Securities
from the Company on , 199 (the "Delivery Date") and
interest on the Designated Securities so purchased will accrue
from , 199 .]
[The undersigned will purchase the Designated Securities
from the Company on the delivery date or dates and in the
principal amount or amounts set forth below:
Each such date on which Designated Securities are to be
purchased hereunder is hereinafter referred to as a "Delivery
Date".]
Payment for the Designated Securities which the undersigned
has agreed to purchase on [the] [each] Delivery Date shall be
made to the Company or its order by [certified or official bank
check] [in New York Clearing House funds at the office of Sears
Roebuck Acceptance Corp., Greenville, Delaware] [or] [by wire
transfer, in immediately available funds, to a bank account
specified by the Company], on [the] [such] Delivery Date upon
delivery to the undersigned of the Designated Securities then to
be purchased by the undersigned in definitive fully registered
form and in such denominations and registered in such names as
the undersigned may designate by written or telegraphic
communication addressed to the Company not less than five full
business days prior to [the] [such] Delivery Date.
The obligation of the undersigned to take delivery of and
make payment for Designated Securities on [the] [each] Delivery
Date shall be subject to the conditions that (a) the purchase of
Designated Securities to be made by the undersigned shall not on
[the] [such] Delivery Date be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (b) the
Company, on or before , 199 , shall have sold to
the several Underwriters, pursuant to the Pricing Agreement
dated , 199 with the Company and Sears, Roebuck
and Co. ("Sears"), an aggregate principal amount of Designated
Securities equal to $ , minus the aggregate principal
amount of Designated Securities covered by this contract and
other contracts similar to this contract. The obligation of the
undersigned to take delivery of and make payment for Designated
Securities shall not be affected by the failure of any purchaser
to take delivery of and make payment for Designated Securities
pursuant to other contracts similar to this contract.
Promptly after completion of the sale to the Underwriters
the Company will mail or deliver to the undersigned at its
address set forth below notice to such effect, accompanied by a
copy of the Opinion of Counsel for the Company and Sears
delivered to the Underwriters in connection therewith.
The undersigned represents and warrants that, as of the
date of this contract, the undersigned is not prohibited from
purchasing the Designated Securities hereby agreed to be
purchased by it under the laws of the jurisdiction to which the
undersigned is subject.
This contract will inure to the benefit of and be binding
upon the parties hereto and their respective successors, but will
not be assignable by either party hereto without written consent
of the other.
This contract may be executed by either of the parties
hereto in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
This contract shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
It is understood that the acceptance by the Company of any
Delayed Delivery Contract (including this contract) is in the
Company's sole discretion and that, without limiting the
foregoing, acceptances of such contracts need not be on a
first-come, first-served basis. If this contract is acceptable
to the Company, it is requested that the Company sign the form
of acceptance below and mail or deliver one of the counterparts
hereof to the undersigned at its address set forth below. This
will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered by
the Company.
Yours very truly,
By
(Signature)
(Name and Title)
(Address)
Accepted, ,199
in Greenville, Delaware
SEARS ROEBUCK ACCEPTANCE CORP.
By
(Title)
Exhibit 1.3
Sears Roebuck Acceptance Corp.
$1,750,000,000 Medium-Term Notes Series IV
DISTRIBUTION AGREEMENT
June 13, 1997
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company"), proposes to issue and sell from time to time its
medium-term debt securities (the "Notes") in an aggregate
initial offering price up to U.S. $1,750,000,000 (or the
equivalent in foreign currency or currency units), and agrees
with each person serving as an agent pursuant to this Agreement
(individually, an "Agent", and collectively, the "Agents") as set
forth herein. Subject to the terms and conditions stated herein,
the Company hereby (i) appoints each Agent as an agent of the
Company for the purpose of soliciting and receiving offers to
purchase Notes from the Company and (ii) agrees that whenever it
determines to sell Notes directly to any Agent as principal, it
will enter into a separate agreement (each a "Terms Agreement"),
substantially in the form of Annex I hereto, relating to such
sale in accordance with Section 2(b) hereof (unless the Company
and such Agent shall otherwise agree).
The Notes will be issued under an indenture, dated as of May
15, 1995 (the "Indenture"), between the Company and The Chase
Manhattan Bank, as Trustee (the "Trustee"). The Notes shall have
the currency denomination, maturities, annual interest rates
(whether fixed or floating), redemption provisions and other
terms set forth in the Prospectus referred to below as it may be
amended or supplemented from time to time. The Notes will be
issued, and the terms and rights thereof established, from time
to time by the Company in accordance with the Indenture and the
Administrative
Procedure attached hereto as Annex II as it may be amended from
time to time by written agreement between the Agents and the
Company (the "Procedure") and, if applicable, will be specified
in a related Terms Agreement.
1. Each of the Company and Sears, Roebuck and Co.
("Sears") represents and warrants to, and agrees with, each Agent
that:
(a) A registration statement on Form S-3 (Registration
No. 333-9817) in respect of U.S. $4,000,000,000 aggregate
principal amount (or the equivalent in foreign currency or
currency units) of debt securities of the Company, including the
Notes, has been filed with the Securities and Exchange Commission
(the "Commission") in the form heretofore delivered to such
Agent, excluding exhibits
(whether or not incorporated by reference) to such registration
statement but including all documents incorporated by reference
in the prospectus included therein, and such registration
statement in such form has been declared effective by the
Commission and no stop order suspending the effectiveness of such
registration statement has been issued and no proceeding for that
purpose has been
initiated or threatened by the Commission (any preliminary
prospectus included in such registration statement being
hereinafter called a "Preliminary Prospectus;" the various parts
of such registration statement, including all exhibits thereto
but
excluding Form T-1, each as amended at the time such part became
effective, being hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Notes,
in the form in which it has most recently been filed with the
Commission on or
prior to the date of this Agreement, being hereinafter called the
"Prospectus"; any reference herein to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the
applicable form under the Securities Act of 1933, as amended (the
"Act") as of the date of such Preliminary Prospectus or
Prospectus, as the case may be; any supplement to the Prospectus
that sets
forth only the terms of a particular issue of Notes being
hereinafter called a "Pricing Supplement;" any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents
filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated
therein by
reference; and any reference to the Prospectus as amended or
supplemented shall be deemed to refer to the Prospectus as
amended or supplemented with respect to Notes sold pursuant to
this
Agreement, in the form in which it is filed with the Commission
pursuant to Rule 424(b) of Regulation C under the Act, including
any documents incorporated by reference therein as of the date of
such filing);
(b) Except for statements in such documents which do
not constitute part of the Registration Statement or the
Prospectus
pursuant to Rule 412 of Regulation C under the Act and after
substituting therefor any statements modifying or superseding
such excluded statements (i) the documents incorporated by
reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the
Commission thereunder, and
none of such documents, when they became effective or were so
filed, as the case may be, contained, in the case of documents
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and, in the case of documents which were filed under
the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and
(ii) any further documents so filed and incorporated by reference
in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the
Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder and will not contain, in the case of documents which
become effective under the Act, an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and in the case of documents which are filed under
the Exchange Act with the Commission, an untrue statement of
material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in
writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a particular
issuance of Notes; the Indenture has been duly qualified under,
and conforms in all material respects to the requirements of, the
Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"); and
(c) Except for statements in documents incorporated
therein by reference which do not constitute part of the
Registration Statement or the Prospectus pursuant to Rule 412 of
Regulation C under the Act and after substituting therefor any
statements modifying or superseding such excluded statements, the
Registration Statement and the Prospectus conformed, and any
amendments or supplements thereto will, when they become
effective or are filed with the Commission, as the case may be,
conform, in all material respects to the requirements of the Act
and the Trust Indenture Act, and the rules and regulations of the
Commission thereunder and do not and will not, as of the
applicable effective date in the case of the Registration
Statement and any amendment thereto and as of the applicable
filing date in the case of the Prospectus and any supplement
thereto, contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in
writing to the Company by any Agent expressly for use in the
Prospectus as amended or supplemented.
2. The Company represents and warrants to, and agrees
with, each Agent that:
(a) Upon payment therefor as provided herein and in
any Terms Agreement, the Notes will have been duly and validly
authorized, and (assuming their due authentication by the
Trustee) will have been duly and validly issued and will be valid
outstanding obligations of the Company in accordance with their
terms, except as the same may be limited by insolvency,
bankruptcy, reorganization, or other laws relating to or
affecting the
enforcement of creditors' rights or by general equity principles,
and will be entitled to the benefits of the Indenture; provided,
however, that The Company makes no representation as to whether,
with respect to any Notes denominated in a currency other than
United States dollars, a court located in the United States would
grant a judgment relating to the Notes in other than United
States dollars, nor as to the date which any such court would
utilize for determining the rate of convesion into United States
dollars in
granting such judgment;
(b) The issue and sale of the Notes and the compliance
by the Company with all of the provisions of the Notes, the
Indenture, this Agreement and any Terms Agreement will not
conflict with or result in any breach which would constitute a
material
default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of
the
Company material to the Company, pursuant to the terms of, any
indenture, loan agreement or other agreement or instrument for
borrowed money to which the Company is a party or by which the
Company may be bound or to which any of the property or assets of
the Company material to the Company, is subject, nor will such
action result in any material violation of the provisions of the
Certificate of Incorporation, as amended, or the By-Laws of the
Company or, to the best of its knowledge, any statute or any
order, rule or regulation applicable to the Company of any court
or any Federal, State or other regulatory authority or other
governmental body having jurisdiction over the Company, and no
consent,
approval, authorization or other order of, or filing with, any
court or any such regulatory authority or other governmental body
is required for the solicitation of offers to purchase Notes and
the issue and sale of the Notes, except as may be required under
the Act, the Exchange Act, the Trust Indenture Act and securities
laws of the various states and other jurisdictions in which the
Agents will solicit offers to purchase Notes from the Company and
will purchase Notes as principal, as the case may be; and
(c) Immediately after the settlement of any sale of
Notes by the Company resulting from solicitation by such Agent
hereunder and immediately after any Time of Delivery (as defined
below) relating to a sale to an Agent as principal, the aggregate
principal amount of Notes which shall have been issued and sold
by the Company hereunder or under any Terms Agreement and of any
debt securities of the Company (other than such Notes) that shall
have been issued and sold pursuant to the Registration Statement
will not exceed the amount of debt securities registered under
the
Registration Statement.
3. (a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein
set forth, each of the Agents hereby severally and not jointly
agrees to act as agent of the Company, to use its reasonable
efforts to solicit offers to purchase the Notes from the Company
upon the terms and conditions set forth in the Prospectus
relating to the Notes as amended or supplemented from time to
time and in the Procedure.
Subject to the provisions of this Section 3 and to the
Procedure, offers for the purchase of Notes may be solicited by
each Agent as agent for the Company at such time and in such
amounts as such Agent deems advisable; provided, however, that
the Company reserves the right to sell Notes directly on its own
behalf or through other agents, dealers or underwriters, and to
appoint additional persons from time to time to serve as Agents
pursuant to this Agreement.
Each Agent agrees that it will not solicit an offer to
purchase Notes or deliver any of the Notes in any jurisdiction
outside the United States of America except under circumstances
that will result in compliance with the applicable laws thereof.
Each Agent understands that no action has been taken to permit a
public offering in any jurisdiction outside the United States of
America where action would be required for such purpose. The
Agents further undertake that in connection with the distribution
of Notes denominated in any foreign currency or currency unit,
they will as agent, directly or indirectly, not solicit offers to
purchase and as principal under any Terms Agreement or otherwise,
directly or indirectly, not offer, sell or deliver, such Notes in
or to residents of the country issuing such currency, except as
permitted by applicable law.
The Company reserves the right, in its sole discretion, to
instruct the Agents to suspend at any time, for any period of
time or permanently, the solicitation of offers to purchase the
Notes. Promptly after receipt of notice from the Company, but in
any event not less than one business day thereafter, the Agents
will suspend solicitation of offers to purchase Notes from the
Company until
such time as the Company has advised them that such solicitation
may be resumed.
The Company agrees to pay each Agent, at the time of
settlement of any sale of a Note by the Company, the purchase of
which is solicited by such Agent, a commission in United States
dollars (which, in the case of Notes denominated in other than
United States dollars, shall be based upon the Market Exchange
Rate (as defined below) for such currency or currency unit at the
time of any acceptance of an offer to purchase a Note) in an
amount
equal to the following percentage of the principal amount of such
Note sold (or at such other amount as may from time to time be
negotiated between such Agent and the Company):
Maturity Commission (percentage
of aggregate principal
amount of Notes sold)
9 months to less than 1 year...................... .125%
1 year to less than 18 months.................... .150%
18 months to less than 2 years.................. .200%
2 years to less than 3 years....................... .250%
3 years to less than 4 years....................... .350%
4 years to less than 5 years....................... .450%
5 years to less than 6 years....................... .500%
6 years to less than 7 years....................... .550%
7 years to less than 11 years..................... .600%
11 years to less than 15 years................... .625%
15 years to less than 20 years................... .675%
20 years to 30 years.............................. .750%
Greater than 30 years............................... to be
negotiated
Notwithstanding anything herein to the contrary, if, at or prior
to the time of settlement, the Company and an Agent have entered
into, or such Agent has arranged for the Company to enter into, a
contract with respect to the sale of Notes in the currency (other
than United States dollars) or currency unit in which a Note has
been denominated and the purchase of which was solicited by such
Agent, the commission in United States dollars payable by the
Company to such Agent shall be based upon the same exchange rate
set forth in such contract.
The authorized denominations of Notes denominated in a
currency or currency unit other than United States dollars shall
be equivalent, as determined by the Market Exchange Rate for such
currency or currency unit on the business day immediately
preceding the date on which the offer for such Notes is accepted,
of U.S.$1,000 (rounded down to an integral multiple of 1,000
units of such currency or currency unit), and any larger amount
in an
integral multiple of 1,000 units of such currency or currency
unit. The authorized denominations of Notes denominated in
United States dollars shall be U.S.$1,000 and any larger amount
in integral
multiples of $1,000.
The "Market Exchange Rate" on a given date for a given
foreign currency means the noon buying rate in New York City for
cable
transfers in such currency as certified for customs purposes by
the Federal Reserve Bank of New York on such date; provided,
however, that in the case of European Currency Units, Market
Exchange Rate means, unless otherwise agreed by the Company and
the Agents, the rate of exchange determined by the Council of
European Communities (or any successor thereto) as published on
such date or the most recently available date in the Official
Journal of the European
Communities (or any successor publication).
Unless otherwise agreed between the Company and each Agent,
each Agent shall communicate to the Company, orally or in
writing, each offer to purchase Notes received by it as Agent
other than those rejected by such Agent in accordance herewith.
The
Company shall have the sole right to accept offers to purchase
Notes and may reject any proposed purchase of Notes. Each Agent
shall have the right, in its discretion reasonably exercised, to
reject any proposed purchase of Notes received by it, and any
such rejection by it shall not be deemed a breach of its
agreements
contained herein.
(b) Each sale of Notes to any Agent as principal shall be
made in accordance with the terms of this Agreement and (unless
the Company and such Agent shall otherwise agree) a Terms
Agreement, which will provide for the sale of such Notes. Terms
Agreements, each of which shall be substantially in the form of
Annex I hereto, may take the form of an exchange of any standard
form of written telecommunication between any Agent, the Company
and Sears,
including by telecopy or telex. The Company, Sears and any Agent
who is a party to a Terms Agreement agree to exchange executed
copies of such Terms Agreement as promptly as practicable after
they have entered into such Terms Agreement pursuant to the
foregoing exchange of written telecommunication. The Agents may
utilize a selling or dealer group in connection with the
reoffering of the Notes purchased as principal.
For each sale of Notes to an Agent as principal that is not
made pursuant to a Terms Agreement, the procedural details
relating to the issue and delivery of such Notes and payment
therefor shall be as set forth in the Procedure. For each such
sale of Notes to an Agent as principal that is not made pursuant
to a Terms Agreement, the Company agrees to pay such Agent a
commission (or grant an equivalent discount) as provided in
Section 3(a) and in accordance with the schedule set forth
therein or
established from time to time pursuant thereto, except as the
parties otherwise agree in writing.
Each time and date of delivery of and payment for Notes to
be purchased by an Agent as principal, whether set forth in a
Terms Agreement or in accordance with the Procedure, is referred
to
herein as a "Time of Delivery."
(c) Procedural details relating to the issue and delivery
of Notes, the solicitation of offers to purchase Notes, and the
payment in each case therefor, shall be as set forth in the
Procedure. The provisions of the Procedure shall apply to all
transactions contemplated hereunder other than those made
pursuant to a Terms Agreement. Each of the Agents and the
Company agrees to perform the respective duties and obligations
specifically provided to be performed by each of them in the
Procedure. The Company will furnish to the Trustee a copy of the
Procedure as from time to time in effect.
4. The documents required to be delivered pursuant to
Section 8 hereof shall be delivered at the offices of Latham &
Watkins, Sears Tower, Suite 5800, Chicago, Illinois, at 11:00
a.m., New York time, on the date of this Agreement, or at such
other date and time as the Agents and the Company agree (such
time and date being referred to herein as the "Closing Date").
5. Each of the Company and Sears covenants and agrees with
each Agent:
(a) Prior to the termination of the offering of the
Notes, to make no amendment or supplement to the Registration
Statement or the Prospectus (except for a Pricing Supplement or a
supplement relating to an offering of securities other than the
Notes) without first having furnished the Agents with a copy of
the proposed form thereof, and giving the Agents a reasonable
opportunity to review the same; to advise the Agents promptly of
any such amendment or supplement after such Time of Delivery and
furnish the Agents with copies thereof; to prepare, with respect
to any Notes to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a
form previously approved by such Agent and to file such Pricing
Supplement pursuant to Rule 424(b)(2) under the Act not later
than the close of business of the Commission on the second
business day after the date on which such Pricing Supplement is
first used or the date of determination of the offering price;
and to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company or Sears,
respectively, with the Commission pursuant to Section 13 or 14 of
the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Notes,
and during such same period to advise the Agents, promptly after
the Company or Sears receives notice thereof, of the time when
any
amendment to the Registration Statement has been filed or has
become effective or any supplement to the Prospectus or any
amended Prospectus (other than any Pricing Supplement and any
supplement relating to any offering of securities other than the
Notes) has been filed with, or mailed for filing to, the
Commission, of the issuance by the Commission of any stop order
or of any order
preventing or suspending the use of any prospectus relating to
the Notes, of the suspension of the qualification of the Notes
for
offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such stop
order or of any such order preventing or suspending the use of
any such prospectus or suspending any such qualification, to use
promptly its best
efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as
the Agents reasonably may request to qualify the Notes for
offering and sale under the securities laws of such jurisdictions
as the
Agents may request and to comply with such laws so as to permit
the continuance of sales and dealings therein for as long as may
be
necessary to complete the distribution or sale of the Notes;
provided that in connection therewith neither the Company nor
Sears shall be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) To furnish the Agents with copies of the
Registration Statement and each amendment thereto, and with
copies of the Prospectus as amended or supplemented, other than
any
Pricing Supplement (except as provided in the Procedure), in the
form in which it is filed with the Commission pursuant to Rule
424 under the Act or in the form first used to confirm sales
which was not required to be filed pursuant to Rule 424 under the
Act, in
such quantities as the Agents may from time to time reasonably
request, and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Notes
(including Notes purchased from the Company by such Agent as
principal) and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in
the
Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to (i) notify the Agents to suspend
solicitation of offers to purchase Notes from the Company (and,
if so notified, the Agents shall promptly cease such
solicitations), (ii) prepare and cause to be filed with the
Commission, after
having furnished the Agents with a copy of the proposed form and
given the Agents a reasonable opportunity to review the same, an
amendment or supplement to the Registration Statement or the
Prospectus as then amended or supplemented that will correct such
statement or omission or effect such compliance and (iii) supply
such Prospectus as then amended or supplemented to the Agents in
such quantities as the Agents may reasonably request; if such
amendment or supplement, and any documents, certificates and
opinions furnished to the Agents pursuant to Section 8 in
connection with the preparation or filing of such amendment or
supplement are reasonably satisfactory in all respects to the
Agents, the Agents will, upon the filing of such amendment or
supplement with the Commission and upon the effectiveness of an
amendment to the Registration Statement if such an amendment is
required, resume the Agents' obligation to solicit offers to
purchase Notes hereunder; if such amendment or supplement, or any
documents, certificates and opinions furnished to the Agents
pursuant to Section 8 in connection with the preparation or
filing of such amendment or supplement, are not satisfactory to
the
Agents, the Agents will as promptly as reasonably practicable
notify the Company and Sears in writing;
(d) To make generally available to its security
holders, in accordance with the provisions of Rule 158 under the
Act or
otherwise, as soon as practicable, but in any event not later
than forty-five days after the end of the fourth full fiscal
quarter
(ninety days in the case of the last fiscal quarter in any fiscal
year) following the fiscal quarter ending after the latest of (x)
the effective date of the Registration Statement, (y) the
effective date of the post-effective amendment thereto
hereinafter referred to and (z) the date of filing of the report
hereinafter referred to, an earning statement of the Company and
Sears and its
consolidated subsidiaries, respectively, (which need not be
audited) complying with Section 11(a) of the Act and covering a
period of at least twelve consecutive months beginning after the
latest of (i) the effective date of such Registration Statement,
(ii) the effective date of the post-effective amendment, if any,
to such Registration Statement (within the meaning of Rule 158)
and (iii) the date of filing of the last report of the Company or
Sears incorporated by reference into the Prospectus (within the
meaning of Rule 158); and
(e) That each acceptance by the Company of an offer to
purchase Notes hereunder shall be deemed to be an affirmation to
such Agent that the representations and warranties of the Company
and Sears contained in or made pursuant to this Agreement are
true and correct in all material respects as of the date of such
acceptance as though made at and as of such date, and an
undertaking that, if a settlement occurs with respect to such
acceptance, such representations and warranties will be true and
correct as of such settlement date as though made at and as of
such date (except that such representations and warranties shall
be
deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented relating to such Notes).
6. The Company covenants and agrees with each Agent that,
except as may otherwise be specified in any Terms Agreement,
during the period beginning from the date of any Terms Agreement
and
continuing to and including the earlier of (i) the termination of
the trading restrictions for the Notes purchased thereunder, of
which termination such Agent or Agents party to the Terms
Agreement agree to give the Company prompt notice confirmed in
writing and (ii) the Time of Delivery for such Notes, not to
offer, sell,
contract to sell or otherwise dispose of any debt securities of
the Company which (i) mature nine months or more after such Time
of
Delivery, (ii) mature within six months of the maturity of such
Notes and (iii) are denominated in the same currency or currency
unit specified in the Terms Agreement, without the prior written
consent of such Agent or Agents, which consent shall not be
unreasonably withheld, except pursuant to arrangements of which
such Agent or Agents have been advised by the Company prior to
the time of execution of such Terms Agreement, which advice is
confirmed in writing (which may be by telecopy or telex, receipt
acknowledged) to such Agent or Agents by the end of the business
day following the date of such Terms Agreement.
7. The Company covenants and agrees with each Agent that
the Company will pay or cause to be paid, whether or not any sale
of Notes is consummated, the following: (i) the fees and
expenses of the Company's counsel and accountants in connection
with the
registration of the Notes under the Act and all other expenses in
connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus, the
Prospectus and amendments and supplements thereto and the mailing
and
delivering of copies thereof to the Agents; (ii) the fees and
expenses of counsel for the Agents, which counsel has been
approved by the Company, incurred heretofore or hereafter in
connection with the transactions contemplated hereunder; (iii)
the cost of printing or reproducing this Agreement, any Terms
Agreement, any Indenture, any Blue Sky and Legal Investment
Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Notes; (iv) all
expenses in connection with the qualification of the Notes for
offering and sale under state securities laws as
provided in Section 4(b) hereof, including fees and disbursements
of counsel for the Agents in connection with such qualification
and in connection with the Blue Sky and legal investment surveys;
(v) any fees charged by security rating services for rating the
Notes; (vi) any filing fees incident to any required review by
the
National Association of Securities Dealers, Inc. of the terms of
the sale of the Notes; (vii) the cost of preparing the Notes;
(viii) the fees and expenses of any Trustee and any transfer or
paying agent of the Company and the fees and disbursements of
counsel for any Trustee or such agent in connection with any
Indenture and the Notes; (ix) on a monthly basis all out-of-
pocket expenses (including, without limitation, advertising
expenses)
incurred by such Agent connected with the solicitation of offers
to purchase and the sale of Notes so long as such expenses have
been approved by the Company; and (x) all other costs and
expenses
incident to the performance of the Company's obligations
hereunder (other than costs and expenses incurred by any Agent)
which are not otherwise specifically provided for in this Section
7.
8. The obligation of each Agent, as agent of the Company,
at any time ("Solicitation Time") to solicit offers to purchase
the Notes and the obligation of each Agent to purchase Notes as
principal pursuant to any Terms Agreement or otherwise shall in
each case be subject, in such Agent's discretion, to (i) the
condition that all representations and warranties and other
statements of the Company or Sears herein are true and correct in
all material respects at and as of the Closing Date, as of the
date of the effectiveness of any amendment to the Registration
Statement (including the filing of any document incorporated by
reference
therein), as of the date any supplement to the Prospectus is
filed with the Commission, as of any Time of Delivery, as of each
acceptance by the Company of an offer to purchase Notes hereunder
and as of each settlement date relating to such sale, (ii) the
condition that each of the Company and Sears shall have performed
all of its obligations hereunder theretofore to be performed, and
(iii) the following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the
part of the Commission shall have been complied with to the
Agents'
reasonable satisfaction;
(b) All corporate proceedings and related matters in
connection with the organization of the Company, the validity of
the Indenture and the registration, authorization, issue, sale
and delivery of the Notes shall have been satisfactory to the
Agents' counsel, and such counsel shall have been furnished with
such
papers and information as they may reasonably have requested to
enable them to pass upon the matters referred to in this Section
8(b);
(c) Counsel to the Company and Sears, who may be an
employee of the Company or of Sears, shall have furnished to the
Agents such counsel's written opinion, dated the Closing Date,
and, if so specified in any Terms Agreement, the applicable Time
of
Delivery and the date of effectiveness of each amendment or the
filing of each supplement to the Registration Statement or the
Prospectus (including the filing under the Act or the Exchange
Act of documents incorporated by reference in the Prospectus as
amended or supplemented but excluding amendments or supplements
(i)
relating to an offering of securities other than the Notes, (ii)
constituting a Pricing Supplement, (iii) setting forth or
incorporating by reference financial statements or other
information as of and for a fiscal quarter or (iv) relating
solely to the incorporation by reference of Sears proxy statement
for its annual meeting of shareholders or of a filing by the
Company or
Sears of a Current Report on Form 8-K under the Exchange Act
unless in the case of clauses (iii) or (iv) above, in such
Agent's
reasonable judgment, such financial statements or other
information contained in such documents are of such a character
that an opinion of counsel should be furnished), as the case may
be, in form and substance satisfactory to the Agents in the
Agents' reasonable
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) All of the outstanding shares of capital
stock of SRAC have been duly and validly issued and are fully
paid and non-assessable. The authorized capital stock of the
Company
consists of 500,000 shares of common stock, par value $100 per
share, all of the issued and outstanding shares of which are
owned by Sears, Roebuck and Co., and the authorized capital stock
of
Sears is as set forth or incorporated by reference in the
Registration Statement;
(iii) SRAC is not an "investment company" within
the meaning of the Investment Company Act of 1940, as amended;
(iv) Each of this Agreement and any applicable
Terms Agreement has been duly authorized, executed and delivered
on the part of the Company, and this Agreement has been duly
authorized, executed and delivered on the part of Sears;
(v) The issue and sale of the Notes and the
compliance by the Company with all of the provisions of the
Notes, the Indenture, this Agreement and any applicable Terms
Agreement will not (a) conflict with or result in any breach
which would
constitute a material default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the
property or assets of the Company, material to the Company,
pursuant to the terms of, any indenture, loan agreement or other
agreement or instrument for borrowed money known to such counsel
to which the Company is a party or by which the Company may be
bound or to which any of the property or assets of the Company,
material to the Company, is subject, (b) result in any material
violation of the provisions of the Certificate of Incorporation,
as amended, or the By-Laws of the Company or (c) to the best of
the knowledge of such counsel, result in any 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
securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Notes, as to
which such counsel need express no opinion; and, to the best
knowledge of
such counsel, no consent, approval, authorization or other order
of, or filing with, any court or any such regulatory authority or
other governmental body is required for the issue and sale of the
Notes except as has been obtained or effected under the Act, the
Exchange Act and the Trust Indenture Act or as may be required by
the securities laws of the various states or other jurisdictions
which are applicable to the issue and sale of the Notes;
(vi) The Indenture has been duly authorized,
executed and delivered on the part of the Company and, as to the
Company, is a valid, binding and enforceable instrument in
accordance with its terms except as the foregoing may be limited
by insolvency, bankruptcy, reorganization or other laws relating
to or affecting the enforcement of creditors' rights or by
general equity principles, and has been qualified under the Trust
Indenture Act; the Notes have been duly authorized and (assuming
due
authentication by the Trustee) when duly executed, issued and
delivered pursuant to the Indenture and any Terms Agreement, will
constitute valid, binding and enforceable obligations of the
Company in accordance with their terms, entitled to the benefits
of the Indenture, except as the foregoing may be limited by
insolvency, bankruptcy, reorganization or other laws relating to
or affecting the enforcement of creditors' rights or by general
equity principles;
(vii) The Fixed Charge Coverage and Ownership
Agreement dated May 15, 1995 and the Extension Agreement dated
August 22, 1996, each between the Company and Sears, have been
duly authorized, executed and delivered by the parties thereto
and are valid and binding instrument 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) Such counsel does not know of any
pending legal or governmental proceedings required to be
described in the Prospectus as amended or supplemented (including
documents
incorporated by reference therein) 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 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 such counsel need express no
opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder; the answers in the Registration Statement to Items 9
and 10 (insofar as it relates to such counsel) of Form S-3 are to
the best of such counsel's knowledge accurate statements or
summaries of the matters therein set forth and fairly present the
information called for with respect to those matters by the Act
and the rules and regulations thereunder; and
(xi) Such counsel does not know of any contract or
other document to which the Company or Sears is a party required
to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as
amended or
supplemented or required to be described in the Prospectus as
amended or supplemented which has not been so filed, incorporated
by reference or described.
In rendering such opinion, such counsel may rely to the
extent such counsel deems appropriate upon certificates of
officers or other executives of the Company, Sears and its
business groups and subsidiaries and of public officials as to
factual matters and upon opinions of other counsel. In rendering
the opinion referred to in subdivision (v) above, such counsel
need not express an
opinion as to whether, with respect to any Notes denominated in a
currency other than United States dollars, a court located in the
United States of America would grant a judgment relating to the
Notes in other than United States dollars, nor an opinion as to
the date which any such court would utilize for determining the
rate of conversion into United States dollars in granting such
judgment. Such counsel shall also state that: (a) nothing has
come to such counsel's attention which has caused such counsel to
believe that any of the documents referred to in subdivision (ix)
above (other than the financial statements, the analyses of
operations and
financial condition and other financial, statistical and
accounting data therein, as to which such counsel need express no
belief), in each case after excluding any statement in any such
document which does not constitute part of the Registration
Statement or the Prospectus as amended or supplemented pursuant
to Rule 412 of Regulation C under the Act and after substituting
therefor any statement modifying or superseding such excluded
statement, when such documents were so 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 such counsel's
attention which has caused such counsel to believe that the
Registration Statement or Prospectus as amended or supplemented
(other than the financial statements, the analyses of operations
and financial condition and other financial, statistical and
accounting data therein, as to which such counsel need express no
belief) contains an untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(d) On the Closing Date, and, if so specified in any
Terms Agreement, the applicable Time of Delivery and the date of
effectiveness of each amendment or the filing of each supplement
to the Registration Statement or the Prospectus setting forth or
incorporating by reference amended or supplemental financial
information, as the case may be, the independent certified
public accountants who have certified the financial statements of
the Company and Sears and its subsidiaries included or
incorporated by reference in the Registration Statement shall
have furnished to the Agents a letter or letters, dated the
Closing Date or such applicable date, as the case may be, in form
and substance satisfactory to the Agents, to the effect set forth
in Annex III hereto (modified in the case of amended or
supplemented financial information to reflect such amended and
supplemental financial
information included or incorporated by reference in the
Registration Statement and the Prospectus as amended or
supplemented to the date of such letter, provided that if the
Registration Statement or the Prospectus is amended or
supplemented solely to include or incorporate by reference
unaudited quarterly financial information, the scope of such
letter, which shall be
satisfactory in form and substance to such Agent, may be limited
to relate to such unaudited financial information unless any
other
accounting, financial or statistical information included or
incorporated by reference therein is of a character that, in the
reasonable judgment of such Agent, such letter should address
such other information);
(e) (i) The Company and Sears shall not have
sustained, after the date of the latest audited financial
statements included or incorporated by reference in the
Prospectus and (A) prior to the Closing Date, any material loss
or interference with its
business from fire, explosion, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or court
or
governmental action, order or decree, otherwise than as
contemplated in the Prospectus as amended or supplemented
through the date of this Agreement and (B) prior to each Time of
Delivery, any such loss or interference, otherwise than as set
forth or contemplated in the Prospectus as amended or
supplemented through the date that the Agent agreed to purchase
such Notes as principal; and (ii) since the respective dates as
of which
information is given in the Prospectus as amended or supplemented
and (A) prior to the Closing Date, there shall not have been any
material change in the capital stock accounts or long-term debt
of the Company or any material adverse change in the general
affairs, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented through
the date of this
Agreement and (B) prior to each Time of Delivery, there shall not
have been any such change, otherwise than as set forth or
contemplated in the Prospectus as amended or supplemented through
the date that the Agent agreed to purchase such Notes as
principal, the effect of which, in any such case described in
clause (i) or (ii), in the judgment of such Agent makes it
impracticable or
inadvisable to proceed with the solicitation by such Agent of
offers to purchase Notes from the Company or the purchase by such
Agent of Notes from the Company as principal, as the case may be;
(f) During the period in which the Agents are
soliciting offers to purchase Notes, including the period between
the date
that any Agent agreed to purchase such Notes as principal and the
related Time of Delivery, no downgrading shall have occurred in
the rating accorded the Company's or Sears debt securities by
Moody's Investors Service, Inc. or Standard & Poor's; provided,
however, that this Section 8(f) shall not apply to any such
rating agencies which shall have notified the Company of the
downgrading in the
rating of such debt securities and of which the Company shall
have given the Agents written notice prior to the execution of
the Terms Agreement;
(g) During the period in which the Agents are
soliciting offers to purchase Notes, including the period between
the date
that any Agent agreed to purchase such Notes as principal and the
related Time of Delivery, none of (i) the United States shall
have become engaged in the outbreak or escalation of hostilities
involving the United States or there has been a declaration by
the United States of a national emergency or a declaration of
war, (ii) a banking moratorium shall have been declared by either
Federal or New York State authorities or, in the case of Notes
denominated in other than United States dollars, by the
authorities of the country of the currency in which such Notes
are denominated, (iii) trading in securities generally on the New
York Stock Exchange shall have been suspended or limited or
minimum prices shall have been
established by such Exchange, or (iv) in the case of Notes
denominated in other than United States dollars, any change shall
have occured involving such exchange controls, taxation or
similar matters, any of which events, in the Agents' judgment,
renders it inadvisable to proceed with the solicitation by the
Agents of
offers to purchase Notes from the Company or the purchase by the
Agents of Notes from the Company as principal, as the case may
be; and
(h) Each of the Company and Sears shall have furnished
or caused to be furnished to the Agents at the Closing Date, and,
if so specified in any Terms Agreement, the applicable Time of
Delivery and the date of effectiveness of each amendment or the
filing of each supplement to the Registration Statement or the
Prospectus (including the filing under the Act or the Exchange
Act of documents which are incorporated by reference in the
Prospectus as amended or supplemented but excluding amendments or
supplements (i) relating to an offering of securities other than
the Notes,
(ii) constituting a Pricing Supplement, or (iii) relating solely
to the incorporation by reference of Sears proxy statement for
its
annual meeting of shareholders or of a filing by the Company or
Sears of a Current Report on Form 8-K under the Exchange Act,
unless in the case of clause (iii) above, in such Agent's
reasonable judgment, the information contained in such documents
is of such a character that certificates of officers referred to
below should be furnished, as the case may be) certificates of
officers of the Company and Sears satisfactory to the Agents, as
to the
accuracy at and as of the Closing Date or such applicable date,
as the case may be, of the representations, warranties and
agreements of the Company and Sears, respectively, herein and as
to the
performance by each of the Company and Sears of all its
obligations hereunder to be performed at or prior to the Closing
Date or such applicable date, as the case may be, and the Company
shall have
also furnished the Agents similar certificates satisfactory to
the Agents as to the matters set forth in subdivision (a) of this
Section 8.
9. (a) The Company will indemnify and hold harmless each
Agent against any losses, claims, damages or liabilities, joint
or several, to which such Agent may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in any Preliminary Prospectus, the
Registration
Statement, the Prospectus or the Prospectus as amended or
supplemented, or any amendment or supplement thereto furnished by
the Company or Sears, or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or (in the case of the Registration
Statement or the Prospectus as amended or supplemented or any
amendment or supplement thereto) necessary to make the statements
therein not misleading or (in the case of any Preliminary
Prospectus) necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; and will reimburse each Agent for any legal or other
expenses
reasonably incurred by such Agent in connection with
investigating or defending any such action or claim; provided,
however, that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based
upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any Preliminary Prospectus, or the
Registration Statement, the Prospectus or the Prospectus as
amended or supplemented or any such amendment or supplement in
reliance
upon and in conformity with written information furnished to the
Company by the Agents expressly for use therein; and provided,
further, that the Company shall not be liable to any Agent or any
person controlling such Agent under the indemnity agreement in
this subdivision (a) with respect to the Preliminary Prospectus
or the Prospectus or the Prospectus as amended or supplemented or
any
amendment or supplement thereto, as the case may be, to the
extent that any such loss, claim, damage or liability of such
Agent or
controlling person results solely from the fact that such Agent
sold Notes to a person to whom there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of
the Prospectus as then amended or supplemented (excluding
documents incorporated by reference), whichever is most recent,
if the
Company has previously furnished copies thereof to such Agent.
(b) Each Agent will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
statement or
alleged untrue statement of any material fact contained in any
Preliminary Prospectus, the Registration Statement, the
Prospectus, or the Prospectus as amended or supplemented, or any
amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or (in the case of
the Registration Statement or the Prospectus or the Prospectus as
amended or supplemented or any amendment or supplement thereto)
necessary to make the
statements therein not misleading or (in the case of any
Preliminary Prospectus) necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary
Prospectus or the Registration Statement or the Prospectus or the
Prospectus as
amended or supplemented or such amendment or supplement in
reliance upon and in conformity with written information
furnished to the Company by such Agent expressly for use
therein; and will reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim.
(c) Within a reasonable period after receipt by an
indemnified party under subdivision (a) or (b) above of notice of
the commencement of any action with respect to which
indemnification is sought under such subdivision or contribution
may be sought under subdivision (d) below, such indemnified party
shall notify the indemnifying party in writing of the
commencement thereof. In case any such action shall be brought
against any
indemnified party, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume
the
defense thereof, with counsel satisfactory to such indemnified
party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 9
is unavailable to an indemnified party under subdivision (a) or
(b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein,
then each
indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the contributing
Agent on the other from the offering of the Notes and also the
relative fault of the Company and Sears on the one hand and the
contributing Agent on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other
relevant
equitable considerations. The relative benefits received by the
Company on the one hand and the contributing Agent on the other
shall be deemed to be in the same proportion as the total net
proceeds from the sale of Notes (before deducting expenses)
received by the Company bear to the total commissions or
discounts received by the contributing Agent. The relative fault
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company or Sears on the one hand or
the
contributing Agent on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission of the Company or Sears on the
one hand and the contributing Agent on the other hand. With
respect to any Agent, such relative fault shall also be
determined by reference to the extent (if any) to which such
losses, claims, damages or liabilities (or actions in respect
thereof) with respect to any Preliminary Prospectus result from
the fact that such Agent sold Notes to a person to whom there was
not sent or given, at or prior to the written confirmation of
such sale, a copy of the
Prospectus (excluding documents incorporated by reference) or of
the Prospectus as then amended or supplemented (excluding
documents incorporated by reference) if the Company has
previously furnished copies thereof to such Agent. The Company
and the contributing Agent agree that it would not be just and
equitable if contribution pursuant to this subdivision (d) were
determined by per capita allocation (even if all Agents were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable
considerations referred to above in this subdivision (d). The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subdivision (d) shall
be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigating or
defending any such action or claim. Notwithstanding the
provisions of this subdivision (d), no Agent shall be required to
contribute any amount in excess of the amount by which the total
price at
which the Notes purchased by or through such Agent were sold
exceeds the amount of any damages which such Agent has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The
obligations of each of the Agents under this subdivision (d) to
contribute are several in proportion to the respective purchases
made by or through it to which such loss, claim, damage or
liability (or action in respect thereof) relates and are not
joint.
(e) The obligations of the Company under this Section 9
shall be in addition to any liability which the Company may
otherwise
have and shall extend, upon the same terms and conditions, to
each person, if any, who controls any Agent within the meaning of
the Act; and each Agent's obligations under this Section 9 shall
be in addition to any liability which such Agent may
otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or Sears
and to each person, if any, who controls the Company within the
meaning of the Act.
10. In soliciting offers to purchase Notes from the Company
and in performing the other obligations of such Agent hereunder
(other than in respect of any purchase by an Agent as principal,
pursuant to a Terms Agreement or otherwise), each Agent is
acting solely as agent for the Company and not as principal.
Each Agent will make reasonable efforts to assist the Company in
obtaining performance by each purchaser whose offer to purchase
Notes from the Company was solicited by such Agent and has been
accepted by the Company, but such Agent shall not have any
liability to the Company in the event such purchase is not
consummated for any reason. If the Company shall default on its
obligation to deliver Notes to a purchaser whose offer it has
accepted, the Company shall hold each Agent harmless against any
loss, claim or damage arising from or as a result of such
default by the Company.
11. The respective indemnities, agreements,
representations, warranties and other statements by any Agent,
the Company and Sears set forth in or made pursuant to this
Agreement shall remain in
full force and effect regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any
Agent, the Company, Sears, or any officer or director or any
controlling person of the Company, Sears or any Agent, and shall
survive each delivery of and payment for any of the Notes.
12. The provisions of this Agreement relating to the
solicitation of offers to purchase Notes from the Company may be
suspended or this Agreement may be terminated at any time by the
Company as to any or all Agents or by any Agent insofar as this
Agreement relates to such Agent upon the giving of written
notice of such suspension or termination to such Agent or the
Company, as the case may be. Unless otherwise agreed by the
respective parties, any such suspension or termination shall be
effective immediately with respect to the party giving such
notice and, in the case of the party receiving such notice, at
the close of business on the first business day following the
receipt of such notice. In the event of such suspension or
termination with
respect to any Agent, (x) this Agreement shall remain in full
force and effect with respect to any Agent as to which such
suspension or termination has not occurred, and (y) the Company
shall not have any liability to such Agent and such Agent shall
not have any
liability to the Company, except as provided in any Terms
Agreements and in the fifth paragraph of Section 3(a), Section 7,
Section 9, Section 10 and Section 11.
13. Except as otherwise specifically provided herein or in
the Procedure, all statements, requests, notices and advices
hereunder shall be in writing, or by telephone if promptly
confirmed in writing, and if to an Agent shall be sufficient in
all respects when delivered or sent by facsimile transmission or
registered mail to such Agent at the address or facsimile
transmission number set forth in the Appointment and Acceptance
of Agent relating to the appointment of such Agent, and if to the
Company shall be sufficient in all respects when delivered or
sent by facsimile transmission or registered mail to the Company
at 3711 Kennett Pike, Greenville, Delaware 19807, Attention:
Nancy K.
Bellis, Secretary, Facsimile Transmission No. (302) 888-3150, and
if to Sears shall be sufficient in all respects when delivered or
sent by facsimile transmission or registered mail to Sears at
3333 Beverly Road, Hoffman Estates, Illinois 60179, Attention:
Senior Vice President, General Counsel and Secretary, Facsimile
Transmission No. (847) 286-2471 with a copy to the Vice President
and Treasurer, Facsimile Transmission No. (847) 286-3690. Upon
request of any party hereto, any statements, requests, notices
and advices transmitted by facsimile shall be promptly followed
by
delivery of executed documents by registered mail.
14. This Agreement and any Terms Agreement shall be binding
upon, and inure solely to the benefit of, each Agent, the
Company and Sears, and to the extent provided in Section 9,
Section 10 and Section 11 hereof, the officers and directors of
the Company and Sears and any person who controls any Agent or
the Company, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this
Agreement or any Terms Agreement. No purchaser of any of the
Notes through or from any Agent hereunder shall be deemed a
successor or assign by reason merely of such purchase.
15. Time shall be of the essence in this Agreement and any
Terms Agreement. As used herein, the term "business day" shall
mean any day when the office of the Commission in Washington,
D.C. is normally open for business or each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a legal holiday for
banking
institutions in any of the City of Chicago, The City of New York
or the City of Wilmington.
16. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the internal laws
of the
State of New York.
17. This Agreement (including such Appointments and
Acceptances of Agent as may be executed and delivered by the
Company and Sears and accepted by one or more Agents from time to
time) and any Terms Agreement may be executed by any one or more
of the parties hereto and thereto in any number of counterparts,
each of which shall be an original, but all of such respective
counterparts shall together constitute one and the same
instrument.
<PAGE>
APPOINTMENT AND ACCEPTANCE OF AGENT
Each agent designated below is hereby appointed as an Agent
on the terms and conditions set forth in the Distribution
Agreement. Upon acceptance of such appointment by signing and
returning to us three counterparts hereof, the Distribution
Agreement shall constitute a binding agreement between the
Company, Sears and each such Agent in accordance with its terms.
Very truly yours,
SEARS ROEBUCK ACCEPTANCE CORP.
By: /S/ KEITH E. TROST
President
SEARS, ROEBUCK AND CO.
By: /S/ ALICE M. PETERSON
Vice President and Treasurer
Agents Designated Hereby:
Accepted in New York, New York, as of the date set forth on the
first page of the Distribution Agreement:
GOLDMAN, SACHS & CO.
Address: 85 Broad Steet, New York, New York 10004, Attn:
Registration Department
Facsimile Transmission No.: (212) 902-3000
/S/ GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
Address: 250 Vesey Street, 23rd Floor, World Financial Center,
North Tower, New York, New York 10281,
Attn: MTN Product Management
Facsimile Transaction No.: (212) 449-2234
By: /S/ SCOTT PROMROSE
Authorized Signatory
<PAGE>
MORGAN STANLEY & CO. INCORPORATED
Address: 1585 Broadway, New York, New York 10036, Attn: Managing
Director, Short and Medium-Term Note Department
Facsimile Transmission No.: (212) 761-0780
Copy to: 1585 Broadway, New York, New York 10036, Attn:
Investment Banking Information Center
Facsimile Transmission No.: (212) 761-0260
By: /S/ HAROLD HENDERSHOT
SALOMON BROTHERS INC
Address: Seven World Trade Center, 32nd Floor, New York, New
York 10048, Attn: Medium-Term Note Department
Facsimile Transmission No.: (212) 783-2274
By: /S/ ANNE CLARKE WOLFF
<PAGE>
ANNEX I
Sears Roebuck Acceptance Corp.
$ Medium-Term Notes Series __
TERMS AGREEMENT
_______________________
_______________________
_______________________
Dear Sirs: ,199
Sears Roebuck Acceptance Corp. (the "Company") proposes,
subject to the terms and conditions stated herein and in the
Distribution Agreement, dated ___________, 199_ (the
"Distribution Agreement"), between the Company and Sears,
Roebuck and Co. ("Sears") on the one hand and the Agents
thereunder on the other, to issue and sell to you the securities
specified in the Schedule hereto (the "Purchased Notes"). Each
of the provisions of the Distribution Agreement not specifically
related to the solicitation by such firms, as agents of the
Company, of offers to purchase Notes is incorporated herein by
reference in its entirety, and shall be deemed to be part of this
Agreement to the same extent as if such provisions had been set
forth in full herein, provided that for purposes of this
Agreement all references in the Distribution Agreement to the
"Agents" shall be deemed to refer to you alone. Nothing
contained herein or in the Distribution Agreement shall make any
party hereto an agent of the Company or make such party subject
to the provisions in the
Distribution Agreement relating to the solicitation of offers to
purchase securities from the Company, solely by virtue of its
execution of this Terms Agreement. Each of the representations
and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement, except that
each
representation and warranty in Sections 1 and 2 of the
Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the
date of the
Distribution Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date
of this Terms Agreement in relation to the Prospectus as amended
and supplemented to relate to the Purchased Notes. Unless
otherwise defined herein, terms defined in the Distribution
Agreement are
used herein as therein defined.
An amendment to the Registration Statement, or a supplement
to the Prospectus, as the case may be, relating to the Purchased
Notes, in the form heretofore delivered to you, is now proposed
to be filed with, or in the case of a supplement, mailed for
filing to, the Commission.
Subject to the terms and conditions set forth herein and in
the Distribution Agreement incorporated herein by reference, the
Company agrees to issue and sell to you and you agree to
purchase from the Company the Purchased Notes, at the time and
place, in the principal amount and at the purchase price set
forth in the Schedule hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon
acceptance hereof by you this letter and such acceptance hereof,
including those provisions of the Distribution Agreement
incorporated herein by reference, shall constitute a binding
agreement between you, the Company and Sears.
SEARS ROEBUCK ACCEPTANCE CORP.
By:
SEARS, ROEBUCK AND CO.
By:
Accepted:
[_______________________________________
By: ]
<PAGE>
SCHEDULE TO ANNEX I
Title of Purchased Notes:
[Medium-Term Notes, Series IV]
[ % Notes due ]
Aggregate Principal Amount:
[$ or units of other Specified Currency]
[Currency Swap or Forward Arrangements:]
[Price to Public:]
Purchase Price by :
% of the principal amount of the Purchased Notes [, plus
accrued interest from to ] [and accrued
amortization, from to ]
Specified Funds for Payment of Purchase Price:
immediately available funds
Indenture:
Indenture, dated as of May 15, 1995, as supplemented to the
date hereof, between the Company and The Chase Manhattan Bank, as
Trustee
Form of Purchased Notes:
[Certificated form only][Global form only]
Time of Delivery:
Closing Location:
Maturity:
Interest Rate:
[ %] [Specify floating rate provisions, if any]
Interest Payment Dates:
[months and dates]
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(1) The opinion referred to in Section 8(c).]
[(2) The accountants' letter referred to in Section 8(d).]
[(3) The officers' certificate referred to in Section 8(h).]
Lock-Out Provisions:
[Describe modifications, if any, to the lock-out provisions
set forth in Section 6 of the Distribution Agreement.]
<PAGE>
Syndicate Provisions: [Set forth any provisions relating to
underwriters' default and step-up of amounts to be purchased by
underwriters acting with ]
<PAGE>
ANNEX II
Sears Roebuck Acceptance Corp.
ADMINISTRATIVE PROCEDURE
Medium-term notes (the "Notes") in the aggregate initial
offering price of up to $1,750,000,000 are to be offered from
time to time by Sears Roebuck Acceptance Corp. (the "Company")
through agents of the Company (together, in such capacity, the
"Agents"). Each Agent has agreed to use its reasonable efforts
to solicit
offers to purchase Notes directly from the Company (an Agent, in
relation to a purchase of a particular Note by a purchaser
solicited by such Agent, being herein referred to as the "Selling
Agent") and may also purchase Notes from the Company as principal
(an Agent, in relation to a purchase of a Note by such Agent as
principal other than pursuant to a Terms Agreement being herein
referred to as the "Purchasing Agent"). The Notes are being sold
pursuant to a Distribution Agreement, dated June 13, 1997 (the
"Distribution Agreement"), between the Company, Sears, Roebuck
and Co. ("Sears") and the Agents, to which this Administrative
Procedure is attached as Annex II.
The Notes will be issued pursuant to an Indenture, dated as
of May 15, 1995 (the "Indenture"), between the Company and The
Chase Manhattan Bank, as Trustee (the "Trustee").
Unless otherwise defined herein, terms defined in the
Indenture or the Notes shall be used herein as therein defined.
In the case of purchases of Notes by any Agent as principal,
the relevant terms and settlement details related thereto,
including the Time of Delivery referred to in the first
paragraph of Section 8, will (unless the Company and such Agent
otherwise agree) be set forth in a Terms Agreement entered into
between such Agent and the Company and Sears pursuant to the
Distribution Agreement.
The procedures to be followed during, and the specific terms
of, the solicitation of offers by the Agents and the sale as a
result thereof by the Company are explained below. The
procedures are subject, and are qualified in their entirety by
reference, to all of the respective provisions of the
Distribution Agreement and the Indenture.
The Company will advise each Agent in writing of those
persons handling administrative responsibilities ("Designated
Persons")
with whom such Agent is to communicate regarding offers to
purchase Notes and the details of their delivery.
I. General Procedures
Registration: Notes will be issued only in fully registered
form and will be either (a) Book-Entry Notes represented by one
or more global notes (each a "Global Note") held by the Trustee,
as agent for The Depository Trust Company ("DTC") and recorded in
the book-entry system maintained by DTC or (b) Certificated Notes
delivered in certificated form to the Selling Agent or Purchasing
Agent. All Notes will be issued as Book-Entry Notes except as
otherwise approved in advance by the Company and except that non-
U.S. dollar-denominated Notes will be issued as Certificated
Notes only unless otherwise specified in a Prospectus Supplement
or
Pricing Supplement.
Maturities: Each Note will mature on a date, selected by
the purchaser and agreed to by the Company, which will be at
least nine months from the date of original issuance by the
Company of such Note (the "Settlement Date").
Price to Public: Each Note will be issued at the
percentage of principal amount specified in the Prospectus (as
defined in
Section 1(a) of the Distribution Agreement) relating to the
Notes.
Currencies: Notes will be denominated in U.S. dollars or
in such other currency or currency unit as is specified in the
Prospectus (the "Specified Currency").
Denominations: The denomination of any Book-Entry, Global or
Certificated Note will be a minimum of U.S. $1,000 or any amount
in excess thereof in integral multiples of $1,000 or the
equivalent, as determined pursuant to the provisions of the
Indenture, of U.S. $1,000 (rounded down to an integral multiple
of 1,000 units of such Specified Currency) and any amounts in
excess thereof in integral mutliples of 1,000 units.
Interest Payments: As specified in the Indenture and the
Note.
Acceptance of
Offers: Each Agent will promptly advise the Company
by telephone or other appropriate means of offers to purchase
Notes received by it other than those rejected by such Agent.
Each Agent may, in its discretion reasonably exercised, reject
any offer
received by it. Each Agent also may make offers to the Company
to purchase Notes as a Purchasing Agent in accordance with
Section
2(b) of the Distribution Agreement. The Company will have the
sole right to accept offers to purchase Notes and may reject any
such offer.
If the Company accepts an offer to purchase
Notes, it will confirm such acceptance in writing to the Selling
Agent or Purchasing Agent, as the case may be. If the Company
rejects an offer, it will promptly notify the Agent involved.
Filing and Delivery
of Prospectus: If the Company accepts an offer to
purchase a Note, the Company will prepare a Pricing Supplement
reflecting the terms of such Note and will arrange to have a
Pricing Supplement filed with the Securities and Exchange
Commission (the "Commission") as soon as practicable after the
preparation thereof and will supply at least one such Pricing
Supplement to the Selling Agent or the Purchasing Agent, as the
case may be, not later than 5:00 p.m., New York City time, on the
Business Day following the date of acceptance of such offer.
With respect to each Note sold pursuant to
the Distribution Agreement, the Selling Agent shall send a copy
of the Prospectus as most recently amended or supplemented
(together with the Pricing Supplement relating to such Note) to
the purchaser or its agent prior to or together with the delivery
of (a) the written confirmation of sale (including, in the case
of a
book-entry security, the confirmation through DTC's
Institutional Delivery System) or (b) the delivery of such Note,
whichever is earlier.
Confirmation: For each offer accepted by the Company, the
Selling Agent will issue a written confirmation to each
purchaser containing the Sale Information (as defined below),
plus delivery and payment instructions.
Currency Swaps: Unless otherwise requested by the
Company, each time an Agent advises the Company of an offer to
purchase
Notes denominated in a currency or currency unit other than U.S.
dollars, such Agent will provide the Company information with
respect to currency swap or forward arrangements that, as of the
time the offer is communicated to the Company, such Agent is
prepared to enter into or arrange with a third party to enter
into in order to exchange amounts to be received from the
purchaser of such Note at the Settlement Date and to exchange
amounts to be paid by the Company on the interest payment dates
and at maturity.
Settlement--
Sales as Principal: In the event of a purchase of Notes
by an Agent or Agents, as principal or underwriter (other than as
Purchasing Agent), appropriate settlement details will be set
forth in the applicable Terms Agreement to be entered into
between such Agent or Agents and the Company pursuant to the
Distribution
Agreement.
Settlement--
Sales as Agent: All offers solicited by the Agents and
accepted by the Company will be settled on the third Business Day
(as defined below) after the date of acceptance unless
otherwise agreed by the purchaser and the Company and the
Settlement Date shall be specified upon acceptance of such
offer. The term "Business Day" means a Monday, Tuesday,
Wednesday, Thursday or Friday which is not a legal holiday for
banking institutions in any of the City of New York, New York,
the City of Chicago, Illinois or the City of Wilmington,
Delaware or the city in which the principal corporate trust
office of the Trustee is located or (i) if the Note is
denominated in a currency other than U.S. dollars, in the
principal financial center of the country of the Specified
Currency, or (ii) if the Note is denominated in European Currency
Units, in Brussels.
Communication of Sale
Information to the
Company by Selling
Agent: For each offer accepted by the Company, the
Selling Agent or Purchasing Agent, as the case may be, will
provide (unless provided by the purchaser directly to the
Company) to a
Designated Person by facsimile transmission or other acceptable
means the following information (the "Sale Information"):
(1) If a Certificated Note, exact name of the registered
owner,
(2) If a Certificated Note, exact address of the registered
owner,
(3) If a Certificated Note, taxpayer identification number
of the registered owner (if available),
(4) If a Book-Entry Note, the DTC Participant Number of the
institution through which the customer will hold the beneficial
interest in the Global Note,
(5) Principal amount of the Note,
(6) Trade date of Note,
(7) If a Fixed Rate Note, the interest rate,
(8) Settlement Date,
(9) Maturity date,
(10) Currency or currency unit in which the Note is to be
denominated and, if other than U.S. dollars, the applicable
Exchange Rate for such currency or currency unit,
(11) Indexed Currency, the Base Rate and the Exchange Rate
Determination Date, if applicable,
(12) Issue Price,
(13) Selling Agent's commission or Purchasing Agent's
discount, as the case may be (to be paid upon settlement as a
discount from gross proceeds of sale except as provided below
under "Delivery of Notes and Cash Payment"),
(14) Net proceeds to the Company,
(15) If a redeemable Note with a Redemption Commencement
Date, such of the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Price (% of par), and
(iii) Amount (% of par) that the Redemption
Price shall decline (but not below par) on each anniversary of
the Redemption Commencement Date,
(16) If a redeemable or repayable Note with a Stated
Redemption Date or Stated Redemption Dates, such of the following
as are applicable:
(i) the Stated Redemption Date or Stated
Redemption Dates,
(ii) whether the Note is redeemable or repayable
at the option of the Company or the Holder or both,
(iii) the Redemption Price (% of par) on each
Stated Redemption Date,
(iv) the notice period during which the option to
redeem may be exercised, and
(v) the method by which notice of redemption is
to be given,
(17) If a Floating Rate Note, such of the following as
are applicable:
(i) Interest Rate Basis,
(ii) Index Maturity,
(iii) Spread,
(iv) Spread Multiplier,
(v) Maximum Rate,
(vi) Minimum Rate,
(vii) Initial Interest Determination
Date,
(viii) Interest Reset Dates,
(ix) Calculation Dates,
(x) Interest Determination Dates, and
(xi) Calculation Agent,
(18) Interest Payment Dates,
(19) Regular Record Dates,
(20) Denomination of certificates to be delivered
at settlement, and
(21) That the Note is a Certificated Note (if
applicable),
(22) To the extent known to the Agent, any
information not otherwise expressly set forth in the Prospectus
Supplement which is required pursuant to Item 501(c)(7) or 508 of
Regulation S-K promulgated by the Commission, including, but not
limited to, the initial public offering price of the Notes, if
other than 100% of the principal amount, and
(23) If an Agent purchases Notes as a principal,
the extent, if any, to which the items specified in Sections
8(c), 8(d) and 8(h) of the Distribution Agreement are required to
be furnished as of the Time of Delivery.
In addition, the Selling Agent will use its
reasonable efforts to provide in writing the following
information to the Company and the Trustee:
(24) One of the following:
a. In the case of a foreign registered
owner (other than a Financial Institution (as defined below)), an
IRS
Form W-8 that has been duly and properly signed by the registered
owner.
b. In the case of a registered owner which
is a Financial Institution, a statement from the Financial
Institution signed under penalties of perjury stating that the
Financial
Institution has received from the beneficial owner an IRS Form
W-8 that has been duly and properly signed by the registered
owner
together with a copy of such Form W-8.
c. In the case of a registered owner who is
a United States person, an IRS Form W-9 that has been duly and
properly signed by the registered owner.
A "Financial Institution" is a
securities clearing organization, a bank, or another financial
institution
that holds customers' securities in the ordinary course of its
trade or business which holds a Note for a beneficial owner who
is a foreign person.
After receiving the Sale Information the
Company will, after recording the Sale Information and any
necessary calculations, provide appropriate documentation to the
Trustee necessary for the preparation, authentication and
delivery of such Note.
Change in Interest
Rate, Maturity or
Currency Denomination: The Company and the Agents will discuss
from time to time the rates of interest per annum to be borne by,
and the maturity and currency denomination of, Notes that may be
sold as a result of the solicitation of offers by the Agents.
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to
suspend solicitation of offers to purchase Notes at any time,
whereupon the Agents will as promptly as possible (but in any
event not later
than one business day after receipt of such instruction) suspend
solicitation until such time as the Company has advised the
Agents that solicitation of offers to purchase Notes may be
resumed. If the Company proposes to amend or supplement the
Registration
Statement or the Prospectus relating to the Notes (except in the
case of a Pricing Supplement), it will promptly advise the Agents
and will furnish to the Agents such proposed amendment or
supplement and, after the Agents have been afforded a reasonable
opportunity to review such amendment or supplement, will cause
such amendment or supplement to be filed with the Commission.
The
Company will promptly provide the Agents with copies of any such
amendment or supplement and confirm to the Agents that such
amendment or supplement has been filed with the Commission.
In the event that at the time the Agents suspend
solicitation of offers to purchase Notes there shall be any
outstanding offers to purchase Notes that have been accepted by
the Company but for which settlement has not occurred, the
Company, consistent with its obligations under the Distribution
Agreement, promptly will advise the Agents whether such sales may
be settled and whether copies of the Prospectus as supplemented
at the time of the suspension may be delivered in connection with
the settlement of such sales. The
Company will have the sole responsibility for such decision and
for any arrangements which may be made in the event that the
Company determines that such sales may not be settled or that
copies of
such Prospectus may not be so delivered.
Authenticity of
Signatures: The Trustee will furnish the Agents from time
to time with the specimen signatures of each of the Trustee's
officers, employees or agents who have been authorized by the
Trustee to authenticate Notes, but the Agents will have no
obligation or liability to the Company or the Trustee in respect
of the authenticity of the signature of any officer, employee or
agent of the Company or the Trustee on any Note.
Advertising Cost: The Company will determine with the
Agents the amount of advertising that may be appropriate in the
solicitation of offers to purchase the Notes. Advertising
expenses will be paid by the Company.
<PAGE>
II. Book-Entry Procedures
In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the
Trustee will perform the custodial, document control and
administrative
functions described below, in accordance with its obligations
under a Letter of Representations from the Company and the
Trustee to
DTC, dated June 13, 1997, and a Medium-Term Note Certificate
Agreement, dated March 10, 1989 between the Trustee and DTC (the
"Certificate Agreement"), and the Trustee's obligations as a
participant in DTC including DTC's Same-Day Funds Settlement
System ("SDFS").
Issuance: All Fixed Rate Notes which have the same original
issue date, redemption or repayment provisions, Interest Payment
Dates, Regular Record Dates, interest rate, Specified Currency
and maturity date (collectively, the "Fixed Rate Terms") will be
represented initially by a single Global Note in fully
registered form without coupons.
All Floating Rate Notes which have the same
original issue date, redemption or repayment provisions, Interest
Payment Dates, Regular Record Dates, Interest Rate Basis,
Interest
Determination Dates, Interest Reset Dates, Calculation Dates,
Index Maturity, Spread or Spread Multiplier, if any, Minimum
Rate, if
any, Maximum Rate, if any, Specified Currency and
maturity date (collectively, the "Floating Rate Terms") will be
represented initially be a single Global Note in fully
registered form without coupons.
Identification: The Company has received from the CUSIP
Service Bureau of Standard & Poor's (the "CUSIP Service Bureau")
a series of approximately 900 CUSIP numbers for future assignment
to Global Notes, and the Company has delivered to the Trustee and
DTC such list of such CUSIP numbers. The Trustee will assign
CUSIP
numbers to Global Notes as described below. DTC will notify the
CUSIP Service Bureau periodically of the CUSIP numbers that have
been assigned to Global Notes. The Trustee will notify the
Company at any time when fewer than 100 of the reserved CUSIP
numbers
remain unassigned to Global Notes, and, if it deems necessary,
the Company will reserve additional CUSIP numbers for assignment
to
Global Notes. Upon obtaining such additional CUSIP numbers, the
Company will deliver a list of such additional numbers to the
Trustee and DTC.
Registration: Each Global Note will be registered in the
name of Cede & Co., as nominee for DTC, on the Security Register
maintained under the Indenture. The beneficial owner of a
Book-Entry Note (or one or more indirect participants in DTC
designated by such owner) will designate one or more participants
in DTC (the "Participants") to act as agent or agents for such
owner in connection with the book-entry system maintained by DTC,
and DTC will record in book-entry form, in accordance with
instructions provided by such Participants, a credit balance with
respect to such Book-Entry Note in the account of such
Participants. The ownership interest of such beneficial owner in
such Book-Entry Note will be recorded through the records of such
Participants or through the separate records of such Participants
and one or more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial transferors
and transferees of such Book-Entry Note.
Exchanges: The Trustee, at the Company's request, may
deliver to DTC and the CUSIP Service Bureau at any time a written
notice of consolidation specifying (a) the CUSIP numbers of two
or more outstanding Global Notes having the same Fixed Rate Terms
or Floating Rate Terms, as the case may be (except that original
issue dates need not be the same), and for which interest has
been paid to the same date; (b) a date, occurring at least 30
days after such written notice is delivered and at least 30 days
before the next Interest Payment Date for the related Book-Entry
Notes, on which such Global Notes shall be exchanged for a single
replacement
Global Note; and (c) a new CUSIP number to be assigned to such
replacement Global Note. Upon receipt of such a notice, DTC will
send to its participants (including the Trustee) a written
reorganization notice to the effect that such exchange will occur
on such date.
Prior to the specified exchange date, the Trustee
will deliver to the CUSIP Service Bureau written notice setting
forth such exchange date and the new CUSIP number and stating
that, as of such exchange date, the CUSIP numbers of the Global
Notes to be exchanged will no longer be valid.
On the specified exchange date, the Trustee will
exchange such Global Notes for a single Global Note bearing the
new CUSIP number. The CUSIP numbers of the exchanged Global
Notes
will, in accordance with CUSIP Service Bureau procedures, be
cancelled and not immediately reassigned.
Notwithstanding the foregoing, if the Global Notes
to be exchanged exceed $200,000,000 in aggregate principal
amount, one replacement Global Note will be authenticated and
issued to
represent each $200,000,000 of principal amount of the exchanged
Global Notes and an additional Global Note will be authenticated
and issued to represent any remaining principal amount of such
Global Notes, subject to the minimum denomination restrictions
described in General Procedures - Denominations (see
"Denominations" below).
Denominations: Global Notes representing Book-Entry Notes
will be denominated in principal amounts not in excess of
$200,000,000. If one or more Book-Entry Notes having an
aggregate principal
amount in excess of $200,000,000 would, but for the preceding
sentence, be represented by a single Global Note, then one Global
Note will be issued to represent each $200,000,000 principal
amount of such Book-Entry Note or Book-Entry Notes and an
additional
Global Note will be issued to represent any remaining principal
amount of such Book-Entry Note or Book-Entry Notes, subject to
the minimum denomination restrictions described in General
Procedures - Denominations. In such a case, each of the Global
Notes
representing such Book-Entry Note or Notes shall be assigned the
same CUSIP number.
Interest: DTC will arrange for each pending deposit message
described under Settlement Procedure B below to be transmitted to
Standard & Poor's, which will use the message to include certain
terms of the related Global Note in the appropriate daily bond
report published by Standard & Poor's.
Payments of Principal,
Premium, if any,
and Interest: Payments of Interest Only. Promptly
after each Regular Record Date (or as soon thereafter as such
information is determined), the Trustee will deliver to the
Company and DTC a written notice specifying by CUSIP number the
amount of interest to be paid on each Global Note on the
following Interest Payment Date (other than an Interest Payment
Date coinciding with the Maturity) and the total of such amounts.
DTC will confirm the amount payable on each Global Note on such
Interest Payment Date by reference to the daily bond reports
published by Standard & Poor's. On such
Interest Payment Date, the Company will pay to the Trustee, and
the Trustee in turn will pay to DTC, such total amount of
interest due (other than at Maturity), at the times and in the
manner set forth below under "Manner of Payment."
Payments at Maturity. On or about the first
Business Day of each month (or as soon thereafter as such
information is determined), the Trustee will deliver to the
Company and DTC a written list of principal, premium, if any, and
interest to be paid on each Global Note maturing or subject to
redemption or repayment in the following month. The Trustee, the
Company and DTC will confirm the amounts of such principal,
premium (if any) and interest payments with respect to each such
Global Note on or about the fifth Business Day preceding the
maturity date of such Global Note. At such maturity date, the
Company will pay to the Trustee, and the Trustee in turn will pay
to DTC, the principal of and
premium, if any, on such Global Note, together with interest due
at such maturity date, at the times and in the manner set forth
below under "Manner of Payment." Promptly after payment to DTC
of the principal, premium, if any, and interest due at maturity
of all
Book-Entry Notes represented by a particular Global Note, the
Trustee will cancel such Global Note, make appropriate entries in
its records and dispose of such Global Note as provided in the
Indenture.
Manner of Payment. The total amount of any
principal, premium and interest due on Global Notes on any
Interest Payment Date or at maturity shall be paid by the Company
to the
Trustee in funds immediately available for use by the Trustee as
of noon, New York City time, on such date. The Company will make
such payment on such Global Notes by wire transfer to the
Trustee or by instructing the Trustee to withdraw funds from an
account maintained by the Company at the Trustee. The Company
will confirm any such instructions in writing to the Trustee.
For
maturity, redemption and other principal payments, prior to 1:00
p.m., New York City time, on each such date or as soon as
possible thereafter following receipt of such funds from the
Company, the Trustee will pay by separate wire transfer (using
Fedwire message entry instructions in a form previously specified
by DTC) to an
account at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate use by DTC,
each payment of interest, principal and premium, if any, due on
Global Notes on such date; and for interest payments, the Trustee
will pay DTC in same day funds on the Interest Payment Date in
accordance with existing arrangements between the Trustee and
DTC. Thereafter on each such date, DTC will pay, in accordance
with its SDFS
operating procedures then in effect, such amounts in funds
available for immediate use to the respective Participants with
payments in amounts proportionate to their respective holdings in
principal amount of beneficial interest in such Global Note as
are recorded in the book-entry system maintained by DTC. Once
payment has been made to DTC, neither the Company nor the
Trustee shall have any responsibility or liability for the
payment by DTC of the principal of, or premium, if any, or
interest on, the Book-Entry Notes to such Participants.
Withholding Taxes. The amount of any taxes
required under applicable law to be withheld from any interest
payment on a Book-Entry Note will be determined and withheld by
the Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly to the
beneficial owner of such Book-Entry Note, or as applicable law
may otherwise require.
Settlement Procedures: Settlement Procedures with regard to
each Book-Entry Note sold by each Agent will be as follows:
A. Upon receiving the Sale Information, the
Company will, as soon as practicable, advise the Trustee by
facsimile transmission of the Sale Information and the name of
such Agent.
B. The Trustee will assign a CUSIP number to the
Global Note representing such Book-Entry Note and will
communicate to DTC and the Agent through DTC's Participant
Terminal System, a pending deposit message specifying such of the
following
Settlement information as applicable:
1. The following information:
(a) Principal amount of the purchase.
(b) In the case of a Fixed Rate Note, the
interest rate, or, in the case of a Floating Rate Note, the
initial interest rate, the Interest Reset Dates, the Interest
Payment
Dates, the Interest Rate Basis, Index Maturity, Spread or Spread
Multiplier, if any, and the Minimum Rate and Maximum Rate, if
any.
(c) Settlement date.
(d) Maturity date.
(e) Price.
(f) DTC Participant Number of the
institution through which the customer will hold the beneficial
interest in the Global Note.
2. The numbers of the participant accounts
maintained by DTC on behalf of the Trustee and the Agent.
3. Identification as a Fixed Rate Note or a
Floating Rate Note.
4. The initial Interest Payment Date for such
Note, number of days by which such date succeeds the related DTC
record date (which term means the Regular Record Date, or in the
case of Floating Rate Notes which reset weekly, the date five
calendar days immediately preceding the applicable Interest
Payment Date) and, for Fixed Rate Notes, the amount of interest
payable on such Interest Payment Date per $1,000 principal amount
of Note.
5. The frequency of interest payments.
6. The frequency of interest rate resets.
7. The CUSIP number of the Global Note
representing such Book-Entry Notes.
8. Whether such Global Note represents any other
Book-Entry Notes issued or to be issued.
The Trustee will also orally notify the Agent of the
CUSIP number assigned to the Global Note.
C. The Trustee will prepare a Global Note
representing such Book-Entry Note in a form that has been
approved by the
Company.
D. The Trustee will authenticate the Global Note
representing such Book-Entry Note and maintain possession of such
Global Note.
E. DTC will credit such Book-Entry Note to the
participant account of the Trustee maintained by DTC.
F. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC to (i)
debit such Book-Entry Note to the Trustee's participant account
and credit such Book-Entry Note to the participant account of the
Agent maintained by DTC and (ii) debit the settlement account of
the
Agent and credit the settlement account of the Trustee
maintained by DTC, in an amount equal to the price of such
Book-Entry Note less the Agent's commission. The entry of such a
deliver order shall be deemed to constitute a representation and
warranty by the Trustee to DTC that (a) the Global Note
representing such Book-Entry Note has been issued and
authenticated and (b) the Trustee is holding such Global Note
pursuant to the Certificate Agreement.
G. The Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing DTC to (i)
debit such Book-Entry Note to the Agent's participant account and
credit such Book-Entry Note to the participant accounts of the
Participants to whom such Book-Entry Note is to be credited
maintained by DTC and (ii) debit the settlement accounts of such
Participants and credit the settlement account of the Agent
maintained by DTC, in an amount equal to the initial public
offering price of the Book-Entry Note so credited to their
accounts.
H. Transfers of funds in accordance with
SDFS deliver orders described in Settlement Procedures F and G
will be settled in accordance with SDFS operating procedures in
effect on the Settlement Date.
I. The Trustee will credit to an
account of the Company maintained at The Chase Manhattan Bank
funds
available for immediate use in an amount equal to the amount
credited to the Trustee's DTC settlement account in accordance
with Settlement Procedure F.
J. The Agent will confirm the purchase
of each Book-Entry Note to the purchaser thereof either by
transmitting to the Participant to whose account such Note has
been credited a confirmation order through DTC's Participant
Terminal System or by mailing a written confirmation to such
purchaser. In all cases the Prospectus as most recently amended
or supplemented (including the applicable Pricing Supplement)
must accompany or
precede such confirmation.
Settlement Procedures
Timetable: For offers accepted by the Company,
Settlement Procedures A through J shall occur no later than the
respective
times (New York City time) listed below:
Settlement
Procedure Time
A 11:00 a.m. on the Business Day
following the date of acceptance.
B 2:00 p.m. on the Business Day
following the date of acceptance.
C 5:00 p.m. on the Business Day
before the Settlement Date.
D 9:00 a.m. on the Settlement Date.
E 10:00 a.m. on the Settlement Date.
F-G 2:00 p.m. on the Settlement Date.
H 4:45 p.m. on the Settlement Date.
I-J 5:00 p.m. on the Settlement Date.
Settlement Procedure H is subject to
extension in accordance with any extension of Fedwire closing
deadlines and in the other events specified in the SDFS operating
procedures in effect on the Settlement Date.
If Settlement of a Book-Entry Note is
rescheduled or cancelled, the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a cancellation message
to such effect by no later than 2:00 p.m., New York City time, on
the Business Day immediately preceding the scheduled Settlement
Date.
Failures: If the Trustee has not entered an SDFS
deliver order with respect to a Book-Entry Note pursuant to
Settlement
Procedure F (which may be evidenced by facsimile transmission),
the Trustee, at the Company's direction, shall deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable, but no later than 2:00 p.m. on any business day, a
withdrawal message
instructing DTC to debit such Book-Entry Note to the participant
account of the Trustee maintained at DTC. DTC will process the
withdrawal message, provided that such participant account
contains a principal amount of the Global Note representing such
Book-Entry Note that is at least equal to the principal amount of
such Book-Entry Note to be debited. If withdrawal messages are
processed
with respect to all the Book-Entry Notes issued or to be issued
represented by a Global Note, the Trustee will void such Global
Note, make appropriate entries in its records and, unless
otherwise directed by the Company, destroy the Certificate. The
CUSIP number assigned to such Global Note shall, in accordance
with CUSIP
Service Bureau procedures, be cancelled and not immediately
reassigned. If withdrawal messages are processed with respect to
a portion of the Book-Entry Notes represented by a Global Note,
the Trustee will exchange such Global Note for two Global Notes,
one of which shall represent such Book-Entry Notes (which shall
be
cancelled immediately after issuance), and the other of which
shall represent the remaining Book-Entry Notes previously
represented by the surrendered Global Note and shall bear the
CUSIP number of the surrendered Global Note. If the purchase
price for any Book-Entry Note is not timely paid to the
Participants with respect to such Note by the beneficial
purchaser (other than a Purchasing Agent) thereof (or a person,
including an indirect participant in DTC,
acting on behalf of such purchaser), such Participants and, in
turn, the related Agent may enter SDFS deliver orders through
DTC's Participant Terminal System debiting such Note free to such
Agent's Participant Account and crediting such Note free to the
Participant Account of the Trustee and shall notify the Trustee
and the Company thereof. Thereafter, the Trustee, (i) will
immediately notify the Company, once the Trustee has confirmed
that such Note has been
credited to its Participant Account, and the Company shall
transfer by Fedwire (immediately available funds) to such Agent
an amount equal to the price of such Note which was previously
sent by wire transfer to the account of the Company maintained at
The Chase
Manhattan Bank in accordance with settlement procedure I, and
(ii) the Trustee will deliver the withdrawal message and take the
related actions described in the preceding sentences of this
paragraph. Such debits and credits will be made on the
Settlement Date, if possible, and in any event not later than
5:00 p.m. on the following Business Day. If such failure shall
have occurred for any reason other than default by the Agent in
the performance of its obligations hereunder or under the
Distribution Agreement, the Company will reimburse the Agent on
an equitable basis for its loss of the use of funds during the
period when they were credited to the account of the Company. In
addition, if such failure shall
have occurred by reason of a default by the Company in the
performance of its obligations under the Distribution Agreement,
the Company will pay the Selling Agent any commission to which it
would have been entitled in connection with such sale.
Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-Entry Note, DTC may take
any
actions in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to a
Book-Entry Note that was to have been represented by a Global
Note also representing other Book-Entry Notes, the Trustee will
provide, in accordance with Settlement Procedures C and D, for
the
authentication and issuance of a Global Note representing such
other Book-Entry Notes and will make appropriate entries in its
records.
Trustee Not to Risk
Funds: Nothing herein shall be deemed to require the
Trustee to risk or expend its own funds in connection with any
payment to the Company, or the Agents or DTC, it being understood
by all parties that payments made by the Trustee to either the
Company, DTC or the Agents shall be made only to the extent that
funds are provided to the Trustee for such purpose.
<PAGE>
III. Certificated Notes procedures
Payment at
Maturity: As specified in the Indenture and the Form of
Note.
Settlement: Prior to 3:00 p.m., New York City time, on
the Business Day prior to the Settlement Date, the Company will
instruct the Trustee or its agent by facsimile transmission or
other acceptable written means to authenticate and deliver the
Certificated Notes no later than 2:15 p.m., New York City time,
on the Settlement Date.
If the Settlement Date is the same day as the date
of acceptance, then prior to 11:00 a.m., New York City time, on
the Settlement Date the Company will instruct the Trustee or its
agent by facsimile transmission or other acceptable written means
to
authenticate and deliver the Certificated Notes no later than
2:15 p.m., New York time, on the Settlement Date. Certificated
Notes denominated in a currency or currency unit other than U.S.
dollars shall have a Settlement Date not less than two Business
Days after the acceptance of the offer by the Company.
Delivery of
Notes
and Cash
Payment: Upon receipt of appropriate documentation and
instructions, the Company will cause the Trustee to prepare and
authenticate each Note and appropriate receipts.
Each Certificated Note shall be authenticated and
dated on the Settlement Date therefor. The Trustee will deliver
each authenticated Certificated Note to the Selling Agent for the
benefit of the purchaser in accordance with written instructions
(or oral instructions confirmed in writing (which may be given by
telex or telecopy) on the next business day) from the
Company. Delivery by the Trustee of each Certificated Note will
be made against a receipt therefor.
Upon verification by the Selling Agent that a
Certificated Note has been prepared and properly authenticated
and delivered by the Trustee and registered in the name of the
purchaser in the proper principal amount and other terms in
accordance with the Sale Information, payment will be made to the
Company's account at The Chase Manhattan Bank on behalf of the
Company by the Selling Agent on behalf of the purchaser the same
day as the Selling Agent's receipt of such Certificated Note in
immediately available funds. If either (i) the Certificated Note
is denominated in U.S. dollars or (ii) the Certificated Note is
denominated in a currency or currency unit other than U.S.
dollars and, at or prior to the Settlement Date, the Company and
the
Selling Agent have entered into, or the Selling Agent has
arranged for the Company to enter into, a contract with respect
to the sale of the Specified Currency, the amount payable by the
Selling Agent pursuant to the preceding sentence shall be the
issue price of the Certificated Note (or the U.S. dollar
equivalent pursuant to such contract) less the Selling Agent's
commission determined in
accordance with Section 2(a) of the Distribution Agreement. In
all other cases, the Selling Agent's commission shall not be
discounted from the gross proceeds but shall be paid separately
by the Company in U.S. dollars in immediately available funds on
the Settlement Date. The payment by the Selling Agent shall be
made only upon
prior receipt by such Agent of immediately available funds from
or on behalf of the purchaser in the Specified Currency unless
such Agent decides, at its option, to advance its own funds for
such
payment against subsequent receipt of funds from the purchaser.
Upon delivery of a Certificated Note to the
Selling Agent and the verification provided in the preceding
paragraph, the Selling Agent shall promptly deliver such
Certificated Note to the purchaser or its agent.
Failures: In the event that a purchaser (other than a
Purchasing Agent) shall fail to accept delivery of and make
payment for any Certificated Note, the Selling Agent will
forthwith notify the Trustee and the Company by telephone or by
facsimile
transmission. If the Certificated Note has been delivered to the
Selling Agent on behalf of the purchaser, the Selling Agent will
immediately return the Certificated Note to the Trustee. If
funds have been advanced by the Selling Agent for the purchase of
such Note, The Chase Manhattan Bank will, upon instruction by the
Company and upon receipt of the Certificated Note, debit the
account of the Company in an amount equal to the amount
previously credited thereto in respect of the Note and will
either credit the account of or return such funds to the Selling
Agent. Such debits and credits or returns will be made on the
Settlement Date if
possible and, in any event, not later than the business day
following the Settlement Date. If such failure shall have
occurred for any reason other than default by the Selling Agent
in the
performance of its obligations under the Distribution Agreement,
the Company will reimburse the Selling Agent on an equitable
basis for its loss of the use of the funds during the period when
they were credited to the account of the Company. In addition,
if such failure shall have occurred by reason of a default by
the
Company in the performance of its obligations under the
Distribution Agreement, the Company will pay the Selling Agent
any commission to which it would have been entitled in
connection with such sale.
Immediately upon receipt of the certificate
representing the Note in respect of which the failure occurred,
the Trustee will void such Certificated Note, make appropriate
entries in its records and, unless otherwise instructed by the
Company,
destroy the certificate.
<PAGE>
ANNEX III
Pursuant to Section 8(d) of the Distribution Agreement, the
Company's and Sears independent certified public accountants
shall furnish letters to the effect that:
(i) They are independent certified public accountants
with respect to the Company and Sears and its consolidated
subsidiaries within the meaning of the Act and the applicable
published rules and regulations of the Commission thereunder and
the answer to Item 10 of the Registration Statement is correct
insofar as it relates to them;
(ii) In their opinion, the financial statements and
schedules and the additional financial information examined by
them and included or incorporated by reference in the
Registration
Statement or the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act
or the Exchange Act, as applicable, and the published rules and
regulations thereunder;
(iii) On the basis of limited procedures, not
constituting an examination in accordance with generally accepted
auditing standards, including a reading of the unaudited
financial statements and schedules and other information referred
to
below, a reading of the latest available interim financial
statements of the Company and Sears and certain of its
subsidiaries, inspection of the minute books of the Company and
Sears and certain of its subsidiaries since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the
Company and Sears and its subsidiaries responsible for financial
and accounting
matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated statements of
income, consolidated statements of financial position and
consolidated
statements of changes in financial position of the Company and of
Sears and its consolidated subsidiaries included or
incorporated by reference in the Prospectus do not comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder; or
(B) as of a specified date not more than five
business days prior to the date of delivery of such letter, there
have been any changes in the capital stock accounts, long-term
debt, short-term debt, or any decreases in net assets or other
items specified by the Agents, in each case as compared with
amounts shown or included in the latest statement of financial
position of the Company included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(iv) In addition to the examination referred to in
their report(s) included or incorporated by reference in the
Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in clause (iii)
above, they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts,
percentages and financial information specified by the Agents
which are derived from the general accounting records of the
Company and Sears and its subsidiaries, which appear in the
Prospectus (excluding
documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified
by the Agents or in documents incorporated by reference in the
Prospectus specified by the Agents, and have compared certain of
such amounts, percentages and financial information with the
accounting records of the Company and Sears and its subsidiaries
and have found them to be in agreement.
All references in this Annex III to the Prospectus
shall be deemed to refer to the Prospectus as amended or
supplemented
(including the documents incorporated by reference therein) as of
the Closing Date referred to in Section 8(d) thereof and to the
Prospectus as amended or supplemented (including the
documents incorporated by reference therein) as of the date of
the amendment, supplement, incorporation or the Time of Delivery
relating to the Terms Agreement requiring the delivery of such
letter under Section 8(d) thereof.
Exhibit 1.4
PRICING AGREEMENT
GOLDMAN, SACHS & CO.
As Representatives of and on behalf of
the several Underwriters named in Schedule I hereto
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
June 25, 1997
Dear Sirs:
Sears Roebuck Acceptance Corp., a Delaware corporation (the
"Company"), proposes subject to the terms and conditions stated
herein and in the Underwriting Agreement, dated June 25, 1997
(the "Underwriting Agreement"), executed between the Company and
Sears, Roebuck and Co. ("Sears"), on the one hand, and Goldman,
Sachs & Co., as representatives of and on behalf of the several
Underwriters named in Schedule I hereto, on the other hand, to
issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities"). Each of the provisions of
the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement
to the same extent as if such provisions had been set forth in
full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and, except
where otherwise specified, as of the date of this Pricing
Agreement, except that each representation and warranty with
respect to the Prospectus in Sections 2 and 3 of the Underwriting
Agreement shall be deemed to be a representation and warranty as
of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined) and also a representation and
warranty as of the date of this Pricing Agreement in relation to
the Prospectus as amended or supplemented. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are
used herein as therein defined.
An amendment to the Registration Statement, or a supplement
to the Prospectus, as the case may be, relating to the Designated
Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, the
Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to
purchase from the Company, at the time and place and at a
purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto, less
the principal amount of Designated Securities covered by Delayed
Delivery Contracts, if any, as may be specified in such Schedule
II.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon
acceptance hereof by you on behalf of each of the Underwriters,
this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between the Company, Sears
and each of the Underwriters. It is understood that your
acceptance of this letter on behalf of each of the Underwriters
is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be supplied to the
Company upon request. You represent that you are authorized on
behalf of yourselves and on behalf of each of the other
Underwriters named in Schedule I hereto to enter into this
Agreement.
Very truly yours,
Sears Roebuck Acceptance Corp.
By: /S/ KEITH E. TROST
Sears, Roebuck and Co.
By: /S/ LARRY R. RAYMOND
Accepted as of the date hereof:
/S/ GOLDMAN, SACHS & CO.
........................................
Goldman, Sachs & Co.
As Representatives of and on behalf of
the several Underwriters named in Schedule I hereto
<PAGE>
SCHEDULE I
Underwriter Principal Amount of
Designated Securities to be
purchased
Goldman, Sachs & Co. $ 360,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 35,000,000
J. P. Morgan Securities Ltd. 35,000,000
Morgan Stanley & Co. International Limited 35,000,000
UBS Securities LLC 35,000,000
__________________
TOTAL $ 500,000,000
<PAGE>
SCHEDULE II
Title of Designated Securities:
7% Notes due June 15, 2007
Aggregate principal amount:
$500,000,000
Denominations:
US$1,000 (see "Other Terms")
Price to Public:
99.637% of the principal amount of
the Designated Securities, plus accrued
interest from July 1, 1997 to the Time of
Delivery
Purchase Price by Underwriters:
99.187% of the principal amount of the
Designated Securities, plus accrued
interest from July 1, 1997 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
Form of Designated Securities:
Global form only
Maturity:
June 15, 2007
<PAGE>
Interest Rate:
7%
Interest Payment dates:
June 15 and December 15
Redemption Provisions:
The Notes may be redeemed in whole but not in part at any
time at 100% of their principal amount plus accrued interest in
the event of certain developments affecting United States
taxation as set forth in the Prospectus as amended or
supplemented.
Sinking Fund Provisions:
None
Time of Delivery:
10:00 A.M., Chicago time, July 1, 1997
Funds in which payment by Underwriters to Company to be made:
Immediately available funds
Method of Payment:
Wire transfer to The Chase Manhattan Bank, ABA No.
021-000-021, for the Account of
Sears Roebuck Acceptance Corp., Account No. 910-2587590
Closing Location:
Chicago, Illinois
Delayed Delivery:
None
<PAGE>
Counsel:
To the Company and Sears, Nancy K. Bellis, Assistant General
Counsel-Corporate & Securities, Sears, Roebuck and Co.
To the Underwriters, Cleary, Gottlieb, Steen & Hamilton
Other Terms:
(a) For purposes of this Pricing Agreement only, Section 7
of the Underwriting Agreement shall be amended in the following
manner. The existing Section 7(b) shall be deleted and shall be
amended to read in its entirety as follows:
"(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, and to indemnify and hold
harmless the Underwriters from any documentary stamp or similar
issue tax and any related interest or penalties (except to the
extent that any such interest or penalties result from the
failure of the Underwriters to timely pay any such tax of which
they had knowledge) on the issue, sale or delivery of the
Designated Securities to the Underwriters (it being understood
that except as provided in this subsection (b) and in Section 10
hereof, the Underwriters will pay all of their own costs and
expenses, including the cost of printing any Agreement among
Underwriters, the fees of their counsel, transfer taxes on resale
of any of such Designated Securities by them and any advertising
expenses connected with any offers that they may make; and"
The following Section 7(c) shall be added:
"(c) To use its best efforts to have the Designated
Securities approved for listing on the Luxembourg Stock Exchange
or such other exchange as shall be agreed upon by you and the
Company, by the Time of Delivery or as soon as practicable
thereafter."
(b) For purposes of this Pricing Agreement only, Section 8
of the Underwriting Agreement shall be amended in the following
manner. The existing Section 8(g) shall be deleted and shall be
amended to read in its entirety as follows:
"(g) Subsequent to the date of the Pricing Agreement
relating to the Designated Securities, none of (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 Luxembourg or United States Federal or New York State
authorities, (iii) trading in securities generally on the
Luxembourg Stock Exchange or the New York Stock Exchange shall
have been suspended or limited or minimum prices shall have been
established by such Exchange, any of which events, in your
judgment, renders it impractical or inadvisable to proceed with
the public offering or the delivery of the Designated Securities,
or (iv) there shall have been any change in national or
international political, legal, tax or regulatory conditions, any
of which events, in your judgment, causes a substantial
deterioration in the price and/or value of the Notes;"
The following Section 8(j) shall be added:
"(j) Baker & McKenzie, special tax counsel for the
Company, shall have furnished to you their written opinion, dated
the Time of Delivery for such Designated Securities, in form
satisfactory to you in your reasonable judgment, as to matters
set forth under 'Description of Notes - Redemption and Purchase,'
'Description of Notes - Payment of Additional Amounts,' and
'United States Tax Considerations' in the Prospectus as amended
or supplemented."
UNDERWRITING AGREEMENT
GOLDMAN, SACHS & CO.
As Representatives of and on behalf of
the Underwriters
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
June 25,
1997
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 I I 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 5 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, binding and
enforceable obligations of the Company in accordance with their
terms, except as the same may be limited by insolvency,
bankruptcy, reorganization, moratorium, liquidation, fraudulent
conveyance or transfer or other similar laws relating to or
affecting the enforcement of creditors' rights and by general
equity principles,including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing
(regardless of whether such enforceability is considered in
equity or at law) 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 and 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 has
been obtained or effected under the Act, the Exchange Act and the
Trust Indenture Act or as may be required under the 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 Designated Securities, the several Underwriters
propose to offer the Designated Securities for sale upon the
terms and conditions set forth in the Prospectus as amended or
supplemented.
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. Designated Securities to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto,
in definitive certificates registered in the name of Cede & Co.,
as nominee for the Depository Trust Company, New York, New York
("DTC") (unless otherwise specified in the Pricing Supplement),
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.
The Designated Securities will be issued in the form of
fully registered global Notes, which will be deposited with, or
in accordance with the instructions of, DTC and registered in the
name of DTC's nominee. Except as provided in the Indenture,
beneficial owners of the Designated Securities represented by the
global Notes will not have the right to have Designated
Securities registered in their names, will not receive or be
entitled to receive physical delivery of such Designated
Securities, and will not be considered the owners or holders
thereof. Settlement for the Designated Securities will be made
in immediately available funds. Secondary market trading between
DTC participants will occur in accordance with DTC rules and will
be settled in immediately available funds using DTC's Same-Day
Funds Settlement System. All payments of interest and principal
on the Designated Securities will be made by the Company in
immediately available funds.
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
within the United States 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, earning 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) All of the outstanding shares of capital
stock of the Company have been duly and validly authorized and
issued and are fully paid and non-assessable. 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, and the
authorized capital stock of Sears is as set forth or incorporated
by reference in the Registration Statement;
(iii) The Company 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
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 securities laws of the various states or
other jurisdictions which are applicable to the issue and sale of
the Designated Securities as to which such counsel need express
no opinion; 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 has been obtained or effected
under the Act, the Exchange Act and the Trust Indenture Act or as
may be required under the 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 May 15, 1995 and the Extension Agreement dated
August 22, 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, binding and enforceable instrument in
accordance with its terms except as the foregoing may be limited
by insolvency, bankruptcy, reorganization, moratorium,
liquidation, fraudulent conveyance and transfer or other similar
laws relating to or affecting the enforcement of creditors'
rights generally and by general equity principles, including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether such enforceability
is considered in a proceeding in equity or at law) and has been
qualified under the Trust Indenture Act; the Designated
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,
binding and enforceable 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, moratorium, liquidation, fraudulent conveyance
and transfer or other similar laws relating to or affecting the
enforcement of creditors' rights generally and by general equity
principles, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(viii)Such counsel does not know of any pending
legal or governmental proceedings required to be described in the
Prospectus as amended or supplemented (including documents
incorporated by reference therein) 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 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 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 Item 9 and Item 10 (insofar as it relates to such counsel) of
Form S-3 are to the best of such counsel's knowledge accurate
statements or summaries of the matters therein set forth and
fairly present the information called for with respect to those
matters by the Act and the rules and regulations thereunder; and
(xi) Such counsel does not know of any contract
or other document to which the Company or Sears is a party
required to be filed as an exhibit to the Registration Statement
or required to be incorporated by reference into the Prospectus
as amended or supplemented or required to be described in the
Prospectus as amended or supplemented which has not been so
filed, incorporated by reference or described.
In rendering such opinion, such counsel may rely to the
extent such counsel deems appropriate upon certificates of
officers or other executives of the Company, Sears and its
business groups and subsidiaries and of public officials as to
factual matters and upon opinions of other counsel. Such counsel
shall also state that: (a) nothing has come to such counsel's
attention which has caused such counsel to believe that any of
the documents referred to in subdivision (ix) above (other than
the financial statements 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 belief), in each case after excluding any
statement in any such document which does not constitute part of
the Registration Statement or the Prospectus as amended or
supplemented pursuant to Rule 412 of Regulation C under the Act
and after substituting therefor any statement modifying or
superseding such excluded statement, when such documents were so
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 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 and the 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 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 LLP, certified auditors, 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; 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 none of (i) the United
States shall have become engaged in the outbreak or escalation of
hostilities involving the United States or the United States
shall have made a declaration of a national emergency or a
declaration of war, (ii) a banking moratorium shall have been
declared by either Federal or New York State authorities, or
(iii) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices
shall have been established by such Exchange, any of which
events, in your judgment, renders it inadvisable to proceed with
the public offering or the delivery of the Designated Securities.
(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) Each Underwriter represents and warrants that (i)
it has not offered or sold, and, prior to the date six months
after the date of issue of the Designated Securities, will not
offer or sell any Designated Securities to persons in the United
Kingdom, except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or
otherwise in circumstances that have not resulted and will not
result in an offer to the public in the United Kingdom within the
meaning of the Public Offers of Securities Regulations 1995; (ii)
it has complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by
it in relation to the Designated Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom
any document received by it in connection with the issue of the
Designated Securities to a person who is of a kind described in
Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements)(Exemptions) Order 1996 or is a person to whom the
document may otherwise lawfully be issued or passed on.
(b) Each of the Underwriters agrees that it will not
offer, sell or deliver any of the Designated Securities in any
jurisdiction outside the United States except under circumstances
that will result in compliance with the applicable laws thereof.
10. (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 10
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 10
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 10 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.
11. (a) If any Underwriter shall default in its obligation
to purchase the Designated 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 Designated Securities of a defaulting Underwriter
or Underwriters by you and the Company as provided in subdivision
(a) above, the aggregate principal amount of such Designated
Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of the Designated Securities,
then the Company shall have the right to require each non-
defaulting Underwriter to purchase the principal amount of
Designated 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
Designated Securities of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Designated Securities of a defaulting Underwriter
or Underwriters by you and the Company as provided in subdivision
(a) above, the aggregate principal amount of Designated
Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of the Designated Securities, as
referred to in subdivision (b) above, or if the Company shall not
exercise the right described in subdivision (b) above to require
non-defaulting Underwriters to purchase Designated Securities of
a defaulting Underwriter or Underwriters, then the Pricing
Agreement relating to such Designated Securities shall thereupon
terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 7(b)
hereof and the indemnity and contribution agreements in Section
10 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
12. 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 10 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.
13. If any Pricing Agreement shall be terminated pursuant
to Section 11 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 10 hereof; but, if for any other
reason Designated 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 10
hereof.
14. 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 Goldman, Sachs & Co.,
representing you.
All statements, requests, notices and agreements hereunder
shall be in writing or by telegram if promptly confirmed in
writing and if to the Underwriters shall be sufficient in all
respects, if delivered or sent by registered mail to you as the
Representatives at 85 Broad Street, New York, New York 10004,
Attention: New Issues, Syndicate Desk; and if to the Company
shall be sufficient in all respects if delivered or sent by
registered mail to the Company at 3711 Kennett Pike, Greenville,
Delaware 19807, Attention: Nancy K. Bellis, Secretary; and if to
Sears shall be sufficient in all respects if delivered or sent by
registered mail to Sears at 3333 Beverly Road, Hoffman Estates,
Illinois, Attention: Michael D. Levin, Senior Vice President,
General Counsel and Secretary.
15. 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 10 and Section 12 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.
16. Time shall be of the essence of each Pricing Agreement.
17. This Agreement and each Pricing Agreement shall be
governed by, and construed in accordance with, the internal laws
of the State of New York.
18. This Agreement and each Pricing Agreement may be
executed by any one or more of the parties hereto and thereto in
any number of counterparts, each of which shall be deemed to be
an original, but all such respective counterparts shall together
constitute one and the same instrument.
<PAGE>
If the foregoing is in accordance with your understanding,
please sign and return two counterparts hereof.
Very truly yours,
Sears Roebuck Acceptance Corp.
By: /S/ KEITH E. TROST
Sears, Roebuck and Co.
By: /S/ LARRY R. RAYMOND
Accepted as of the date hereof:
/S/ GOLDMAN, SACHS & CO.
.....................................
Goldman, Sachs & Co.
As Representatives of and on behalf of
the Underwriters
Exhibit 4.1
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
6.95% Note due May 15, 2002
6.95% 6.95%
Due 2002 Due 2002
Sears Roebuck Acceptance Corp., a corporation organized and
existing under the laws of the State of Delaware (hereinafter
called the "Company"), for value received, hereby promises to
pay to , or registered assigns,
the principal sum of Dollars upon
presentation and surrender of this Note, on the fifteenth day of
May, 2002, 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, 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 6.95% 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 November 15 or May
15, as the case may be, next preceding the date hereof to which
interest has been paid on the Notes referred to on the reverse
hereof (unless the date hereof is the date to which interest has
been paid on such Notes, in which case from the date hereof, or
unless the date hereof is prior to November 15, 1997, in which
case from May 16, 1997), semiannually, commencing on November
15, 1997, on November 15 and May 15, until payment of said
principal sum has been made or duly provided for.
Notwithstanding the foregoing, if this Note is dated after any
November 1 and before the following November 15, or after any
May 1 and before the following May 15, then this Note shall bear
interest from such following November 15 or May 15, provided,
however, that if the Company shall default in the payment of
interest due on such following November 15 or May 15, this Note
shall bear interest from the next preceding November 15 or May
15 to which interest has been paid on such Notes, or if no
interest has been paid on such Notes, then from May 16, 1997.
The interest so payable on any November 15 or May 15 will,
subject to certain exceptions provided in the Indenture referred
to on the reverse hereof, be paid to the person in whose name
this Note is registered at the close of business on the November
1 prior to such November 15 or the May 1 prior to such May 15.
Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the registered holder on
such Interest Payment Date, and may be paid to the Person in
whose name this Note is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice of which shall be given to
Noteholders not less than 10 days prior to such Special Record
Date, or may be paid, at any time in any other lawful manner,
all as more fully provided in such Indenture.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, and such further provisions
shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof or any indenture
supplemental thereto, or become valid or obligatory for any
purpose, until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under such
Indenture.<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated: ........................................
Sears Roebuck Acceptance Corp.
By_______________________________________
President
By _______________________________________
Vice President 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
as Trustee
`
By:
Authorized Officer<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
SEARS ROEBUCK ACCEPTANCE CORP.
6.95% Note due May 15, 2002
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 "6.95% Notes due May 15, 2002" of the Company,
limited in aggregate principal amount to $300,000,000
(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 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.
The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the
registered Holder hereof as the absolute owner hereof (whether
or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon by anyone other
than the Company or any Security registrar) for the purpose of
receiving payment of or on account of the principal hereof and
interest hereon and for all other purposes, and neither the
Company, the Trustee, an Authenticating Agent, a paying agent
nor Security registrar shall be affected by any notice to the
contrary. All such payments shall be valid and effectual to
satisfy and discharge the liability upon this Note to the extent
of the sum or sums so paid.
No recourse shall be had for the payment of the principal
of or the interest on this Note or for any claim based hereon or
otherwise in any manner in respect hereof, or in respect of the
Indenture, against any incorporator, shareholder, officer or
director, past, present or future, of the Company or of any
predecessor or successor corporation, whether by virtue of any
constitutional provision or statute or rule of law, or by the
enforcement of any assessment or penalty or in any other manner,
all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue
hereof. In the event of any sale or transfer of its assets and
liabilities substantially as an entirety to a successor
corporation, the predecessor corporation may be dissolved and
liquidated as more fully set forth in the Indenture.
Exhibit 4.2
REGISTERED SEARS ROEBUCK ACCEPTANCE CORP. REGISTERED
No. FXR- MEDIUM-TERM NOTE SERIES IV CUSIP
(FIXED RATE)
[Except as otherwise provided in Section 2.10 of the Indenture
referred to on the reverse hereof, this Note may be transferred,
in whole but not in part, only to another nominee of the
Depository or to a successor Depository or to a nominee of such
successor Depository.
Unless this Note is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New
York) to the Company or its agent for registration of transfer,
exchange or payment, and any Note issued upon registration of
transfer of, or in exchange for, or in lieu of, this Note is
registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OF OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
ORIGINAL ISSUE DATE:
INTEREST RATE: %
REDEMPTION COMMENCEMENT DATE:
REDEMPTION PRICE: IF A REDEMPTION COMMENCEMENT DATE IS
SPECIFIED ABOVE, THE REDEMPTION PRICE
SHALL BE % OF THE PRINCIPAL AMOUNT OF
THIS NOTE TO BE REDEEMED AND THE
REDEMPTION PRICE SHALL DECLINE AT EACH
ANNIVERSARY OF THE REDEMPTION
COMMENCEMENT DATE BY % OF THE
PRINCIPAL AMOUNT OF THIS NOTE TO BE
REDEEMED UNTIL THE REDEMPTION PRICE IS
100% OF SUCH PRINCIPAL AMOUNT.
STATED REDEMPTION DATE(S) AND REDEMPTION PRICE(S):
Stated Redemption Redemption Price if Redeemed Redemption
Date at the Option of Company Price if
Repaid at Option
of Holder
IF ONE OR MORE STATED REDEMPTION DATES ARE SPECIFIED ABOVE, THE
REDEMPTION PRICE SHALL BE THE PERCENTAGE OF THE PRINCIPAL AMOUNT
OF THIS NOTE TO BE REDEEMED OR REPAID AS REFLECTED ABOVE.
REDEEMABLE AT OPTION OF: [THE COMPANY,] [THE HOLDER,] OR [THE
COMPANY OR THE HOLDER]
NOTICE PROVISIONS FOR REDEMPTION ON A STATED REDEMPTION DATE:
MATURITY DATE:
INTEREST PAYMENT DATES: FEBRUARY 15 AND AUGUST 15, COMMENCING
OTHER PROVISIONS:
Sears Roebuck Acceptance Corp., a corporation duly
organized and existing under the laws of the State of Delaware
(herein
referred to as the "Company," which term includes any successor
corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to
or registered assigns, upon presentation and surrender of this
Note, on the Maturity Date shown above (except to the extent
redeemed prior to the Maturity Date) at the office or agency of
the Company in the Borough of Manhattan of The City of New York,
or, at the option of the Holder, such office or agency, if any,
maintained by the Company in the city in which the principal
executive offices of the Company are located or the city in
which the principal corporate trust office of the Trustee is
located, the principal sum of
Principal Amount Specified
Currency and to pay interest thereon at the rate per annum shown
above.
This Note will bear interest from the Original Issue Date
specified above or from the most recent Interest Payment Date to
which interest on this Note has been paid or duly provided for.
Unless otherwise specified above, interest will be computed on
the basis of a 360-day year of twelve 30-day months.
Interest on this Note shall be payable on the Interest
Payment Dates and on the Maturity Date indicated above (or the
date of redemption), except that if this Note was originally
issued between a Regular Record Date and an Interest Payment
Date, the first payment of interest will be made on the Interest
Payment Date following the next succeeding Regular Record Date to
the registered Holder on such next succeeding Regular Record
Date. If any Interest Payment Date falls on a day that is not a
Business Day, the interest payment shall be postponed to the
next succeeding Business Day, and no interest on such payment
shall accrue for the period from and after the Interest Payment
Date. If the Maturity Date of this Note falls on a day that is
not a Business Day, the payment of interest and principal may be
made on the next succeeding Business Day with the same force and
effect as if made at maturity, and no interest on such payment
shall accrue for the period from and after the Maturity Date.
The Regular Record Date shall be the February 1 and August
1 next preceding any February 15 or August 15 Interest Payment
Date and the date 15 calendar days prior to any other Interest
Payment Date, whether or not such date shall be a Business Day.
"Business Day" as used herein means each Monday, Tuesday,
Wednesday, Thursday or Friday which is not a legal holiday for
banking institutions in any of the City of Wilmington, Delaware,
the City of Chicago, Illinois The City of New York, New York or
the city in which the principal corporate trust office of the
Trustee is located or, if this Note is denominated in a currency
other than Dollars, in
______________________________________________________________.
Principal Financial Center of Country Issuing Currency
Payments of interest with respect to any Interest Payment
Date or Maturity Date (or date of redemption) will include
interest accrued to, but excluding, such Interest Payment Date or
Maturity Date (or date of redemption).
The principal (and premium, if any), and interest on, this
Note is payable by the Company in the Specified Currency.
Interest payable on any Interest Payment Date (other than
Defaulted Interest) shall be payable to the person who is the
registered Holder at the close of business on the immediately
preceding Regular Record Date. Interest payable upon redemption
or at maturity (other than a redemption or maturity occurring on
an Interest Payment Date) will be paid to the same person to whom
the principal amount of this Note is payable.
Payment of principal (and premium, if any), and interest
on, this Note on any day (if the Holder of this Note is a
Depository as defined in the Indenture referred to on the reverse
hereof or a nominee of such a Depository) will be made in
accordance with
any applicable provisions of such written agreement between the
Company, the Trustee and such Depository (or its nominee) as may
be in effect from time to time or (if the Holder of this Note
holds an aggregate principal amount of $10,000,000 or more of
Notes with respect to which such payment of principal (and
premium, if any) or interest, as applicable, is to be made on
such day) will be made by wire transfer if the Holder shall have
designated in writing to the Trustee an account with a bank
located in the country issuing the Specified Currency or such
other country as shall be satisfactory to the Company and the
Trustee. If payment of interest is to be made by wire transfer,
such information must be received by the Trustee at its corporate
trust office in the Borough of Manhattan of The City of New York
on or prior to the Regular Record Date for an Interest Payment
Date. The Trustee will, subject to applicable laws and
regulations and until it receives notice to the contrary, make
such payment to such Holder by wire transfer to the designated
account. If a payment of interest is not made in accordance with
such a written agreement or by wire transfer, payment will be
made by check. Checks for payment of interest on an Interest
Payment Date will be mailed to the Holder at the address of such
Holder appearing on the Security Register on the applicable
Regular Record Date.
To receive payment of a U.S. dollar denominated Note upon
redemption or at maturity, a Holder must make presentation and
surrender of such Note on or before the Redemption Date or
Maturity Date, as applicable. Payment (other than payment in
accordance with a written agreement between the Company, the
Trustee and a Depository (or its nominee) as set forth above)
will be made by check unless proper wire instructions are on
file with the Trustee or are received at presentment. To
receive payment of a Note denominated in a Foreign Currency upon
redemption or at maturity, a Holder must make presentation and
surrender such Note not less than two Business Days prior to the
Redemption Date or Maturity Date, as applicable. Upon
presentation and surrender of a Note denominated in a Foreign
Currency at any time after the date two Business Days prior to
the Redemption Date or Maturity Date, as applicable, the Company
will pay the principal amount (and premium, if any) of such
Note, and any interest due upon redemption or at maturity
(unless the Redemption Date or Maturity Date is an Interest
Payment Date), two Business Days after such presentation and
surrender.
The Company will pay any administrative costs imposed by
banks in connection with sending payments by wire transfer, but
any tax, assessment or governmental charge imposed upon payments
will be borne by the Holders of the Notes in respect of which
payments are made.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, and such further provisions
shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof, or become valid or
obligatory for any purpose, until the certificate of
authentication hereon shall have been signed by or on behalf of
the Trustee under such Indenture.
IN WITNESS WHEREOF, the Company has caused this Instrument
to be duly executed under its corporate seal.
Dated: SEARS ROEBUCK ACCEPTANCE
CORP.
CERTIFICATE OF AUTHENTICATION By
This is one of the Notes designated and
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, President
as Trustee
By By
Authorized Signatory
Vice President and
Assistant Secretary
SEARS ROEBUCK ACCEPTANCE CORP.
Medium-Term Note Series IV
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, as Trustee; to which indenture and all indentures
supplemental thereto (herein collectively called the "Indenture")
reference is hereby made for a specification of the rights and
limitation of rights thereunder of the Holders of the Securities,
the rights and obligations thereunder of the Company and the
rights, duties and immunities thereunder of the Trustee. The
Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at
different rates, may be subject to different redemption
provisions (if any), may be subject to different covenants and
defaults and may otherwise vary as in the Indenture provided.
This Note is one of a series designated as the "Medium-Term Notes
Series IV" (hereinafter referred to as the "Notes") of the
Company, of up to $1,750,000,000 in aggregate principal amount.
All terms used in this Note which are defined in the Indenture
and which are not otherwise defined in this Note shall have the
meanings assigned to them in the Indenture.
For purposes of the Notes, the term "Fixed Charge Coverage
and Ownership Agreement" shall mean the Fixed Charge Coverage and
Ownership Agreement as extended by the Extension Agreement
relating to debt securities of which the Notes are a part.
The Notes are issuable only in registered form without
coupons and will be either (a) Book-Entry Notes represented by
one or more global notes (each a "Global Note") recorded in the
book-entry system maintained by the Depository or (b)
certificated notes issued to, and registered in the names of,
the beneficial owners or their nominees ("Certificated Notes").
Notes are issuable in minimum denominations of (i) in the case
of Notes denominated in Dollars, U.S.$1,000 and in any larger
amount in integral multiples of $1,000 and (ii) in the case of
Notes denominated in any Foreign Currency, the equivalent in
such Foreign Currency determined in accordance with the Market
Exchange Rate for such Foreign Currency on the Business Day
immediately preceding the date on which the Company accepts an
offer to purchase a Note, of U.S.$1,000 (rounded to an integral
multiple of 1,000 units of the Foreign Currency), and in any
larger amount in integral multiples of 1,000 units. In the
manner and subject to the limitations provided in the Indenture,
the Global Notes or Certificated Notes are exchangeable, without
charge except for any tax or other governmental charge imposed
in relation thereto, for other Notes of authorized denominations
for a like aggregate principal amount, at the office or agency
of the Company in the Borough of Manhattan of The City of New
York, or, at the option of the Holders thereof, such office or
agency, if any, maintained by the Company in the city in which
the principal executive offices of the Company are located or
the city in which the principal corporate trust office of the
Trustee is located.
Unless this Note is denominated in Dollars, in the event
that the currency in which this Note is denominated is not
available for payment at a time at which any payment is required
hereunder due to the imposition of exchange controls or other
circumstances beyond its control, the Company may, in full
satisfaction of its obligation to make such payment, make
instead a payment in an equivalent amount of Dollars, determined
in accordance with the Market Exchange Rate for such currency on
the latest date for which such rate was established on or before
the date on which payment is due, and such substituted payment
of Dollars shall not constitute a default under this Note or the
Indenture.
If a Redemption Commencement Date is specified above, this
Note may be redeemed, whether or not any other Note is
concurrently redeemed, at the option of the Company, as a whole,
or from time to time in part, on any Business Day on or after the
Redemption Commencement Date and prior to the Maturity Date, upon
mailing by first-class mail, postage prepaid, a notice of such
redemption not less than 30 nor more than 60 days prior to the
Redemption Date, to the Holder of this Note at such Holder's
address appearing in the Security Register, as provided in the
Indenture (provided that, if the Holder of this Note is a
Depository or a nominee of a Depository, notice of such
redemption shall be given in accordance with any applicable
provisions of such written agreement between the Company, the
Trustee and such Depository (or its nominee) as may be in effect
from time to time), at the Redemption Price specified on the
face of this Note (expressed in percentages of the principal
amount hereof to be redeemed) together in each case with
interest accrued to the Redemption Date (subject to the right of
the Holder of record on a Regular Record Date to receive
interest due on an Interest Payment Date). If a Stated
Redemption Date or Stated Redemption Dates are specifed above,
this Note may be redeemed or repaid, whether or not any other
Note is concurrently redeemed or repaid, at the option of the
Company, the Holder, or either the Company or the Holder, as
specified above, as a whole or in part, on such Stated
Redemption Date, at the Redemption Price set forth in the table
above (expresed in percentages of the principal amount hereof to
be redeemed), together in each case with interest accrued to the
Redemption Date (subject to the right of the Holder of record on
a Regular Record Date to receive interest due on an Interest
Payment Date) upon delivery of the notice specified above. In
the event of redemption of this Note in part only, a new Note or
Notes of this series, and of like tenor, for the unredeemed
portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
In case a default, as defined in the Indenture, shall occur
and be continuing with respect to the Notes, the principal amount
of all Notes then outstanding under the Indenture may be declared
or may become due and payable upon the conditions and in the
manner and with the effect provided in the Indenture. The
Indenture provides that such declaration may in certain events
be annulled by the Holders of a majority in principal amount of
the Notes outstanding.
To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or of
any indenture supplemental thereto, and of the rights and
obligations of the Company and the Holders of the Notes, may be
made without the consent of any Holders of Notes, for the
limited purposes described in Section 11.1 of the Indenture.
To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or of
any indenture supplemental thereto, and of the rights and
obligations of the Company and the Holders of the Notes, may be
made with the consent of the Company by the affirmative vote or
consent of the Holders of not less than a majority in principal
amount of the Securities then outstanding (as defined in the
Indenture) of each series to be affected, evidenced as provided
in the Indenture; provided, however, that no such modification
or alteration shall (i) change the stated maturity of the
principal of (and premium, if any), or interest on, any
Security, or reduce the principal amount of (and premium, if
any), or the rate of interest on, any Security, or change the
Currency in which the principal of (and premium, if any), or
interest on, such Security is denominated or payable, or reduce
the amount of the principal of an Original Issue Discount
Security that would be payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.1 of
the Indenture without the consent of the Holder of each
outstanding Security so affected, or (ii) reduce the percentage
of Securities, the vote or consent of the Holders of which is
required for such modifications and alterations, without the
consent of the Holders of all Securities affected. The
Indenture also provides that the Holders of a majority in
principal amount of the Securities of any series then outstanding
may waive any past default with respect to Securities of such
series under the Indenture and its consequences, except a default
in the payment of the principal (or premium, if any), or interest
on, any of the Securities.
This Note is transferable by the registered Holder hereof
or by his attorney duly authorized in writing at the office or
agency of the Company in the Borough of Manhattan of The City of
New York or, at the option of the Holder hereof, such office or
agency, if any, maintained by the Company in the city in which
the principal executive offices of the Company are located or the
city in which the principal corporate trust office of the Trustee
is located, without charge except for any tax, assessment or
other governmental charge imposed in relation thereto, but only
in the manner and subject to the limitations provided in the
Indenture and upon surrender of this Note. Upon any such
transfer a Note or Notes of authorized denominations for a like
aggregate principal amount and bearing a number not
contemporaneously outstanding will be issued in exchange herefor.
The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the
registered Holder hereof as the absolute owner hereof (whether
or not this Note shall be overdue and notwithstanding any notice
of ownership or other writing hereon by anyone other than the
Company or any Security registrar) for the purpose of receiving
payment of or on account of the principal hereof (and premium,
if any), and interest hereon, and for all other purposes, and
none of the Company, the Trustee, an Authenticating Agent, a
paying agent nor the Security registrar shall be affected by any
notice to the contrary. All such payments shall be valid and
effectual to satisfy and discharge the liability upon this Note
to the extent of the sum or sums so paid.
.No recourse under or upon any obligation, covenant or
agreement of the Indenture or of this Note, or for any claim
based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company, whether by
virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being
expressly understood that the Indenture and this Note are solely
corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred
by the incorporators, stockholders, officers or directors, as
such, of the Company or of any successor corporation, or any of
them, because of the creation of the indebtedness authorized by
the Indenture, or under or by reason of the obligations,
covenants or agreements contained in the Indenture or this Note
or implied thereform; and that any and all such personal
liability, either at common law or in equity or by constitution
or statute, or, any and all such rights and claims against,
every such incorporator, stockholder, officer or director, as
such, because of the creation of the indebtedness authorized by
the Indenture, or under or by reason of the obligations,
covenants or agreements contained in the Indenture or this Note
or implied therefrom, are, by acceptance of this Note, hereby
expressly waived and released as a condition of, and as
consideration for, the issue of this Note. In the event of any
sale or transfer of its assets and liabilities substantially as
an entirety to a successor corporation, the predecessor
corporation may be dissolved and liquidated as more fully set
forth in the Indenture.
All Dollar amounts used in or resulting from calculations
referred to in this Note shall be rounded to the nearest cent
(with one half cent being rounded upwards).
This Note shall be governed by, and construed in accordance
with, the internal laws of the State of Delaware.
ASSIGNMENT FORM To assign this Note, fill in the form below:
I or we assign and transfer this Note to:
(Insert assignee's soc. sec. or tax I.D.
no.)
_________________________________________________________________
_______________________________________________________ (Print
or type assignee's name, address and zip code)
_________________________________________________________________
_______________________________________________________
_________________________________________________________________
_______________________________________________________
_________________________________________________________________
_______________________________________________________ and
irrevocably appoint
_________________________________________________________________
_____________________________________agent to transfer this Note
on the books of the Company. The agent may substitute another
to act for him. Date
_______________________________________________ Your signature
___________________________________________________________
_________________________________________________________________
_______________________________________________________ (Sign
exactly as your name appears on the other side of this Note.
The signature to this assignment must be guaranteed by a
commercial bank or trust company having its principal office or
a correspondent in The City of New York or by a member of The
New York Stock Exchange.
Exhibit 4.3
REGISTERED SEARS ROEBUCK ACCEPTANCE CORP. REGISTERED
No. FLR- MEDIUM-TERM NOTE SERIES IV CUSIP
(FLOATING RATE)
[Except as otherwise provided in Section 2.10 of the Indenture
referred to on the reverse hereof, this Note may be transferred,
in whole but not in part, only to another nominee of the
Depository or to a successor Depository or to a nominee of such
successor Depository.
Unless this Note is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New
York) to the Company or its agent for registration of transfer,
exchange or payment, and any Note issued upon registration of
transfer of, or in exchange for, or in lieu of, this Note is
registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository
Trust Company and any payment hereon is made to Cede & Co. ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
ORIGINAL ISSUE DATE:
MATURITY DATE:
INITIAL INTEREST RATE:
MAXIMUM RATE:
INDEX MATURITY:
MINIMUM RATE:
SPREAD (plus or minus):
CALCULATION AGENT:
SPREAD MULTIPLIER:
INTEREST RATE BASIS:
DESIGNATED CMT MATURITY INDEX:
INTEREST PAYMENT DATES:
DESIGNATED CMT TELERATE PAGE:
INTEREST RESET DATES:
REDEMPTION COMMENCEMENT DATE:
REDEMPTION PRICE: IF A REDEMPTION COMMENCEMENT DATE IS
SPECIFIED ABOVE, THE REDEMPTION PRICE SHALL BE % OF THE
PRINCIPAL AMOUNT OF THIS NOTE TO BE REDEEMED AND THE REDEMPTION
PRICE SHALL DECLINE AT EACH ANNIVERSARY OF THE REDEMPTION
COMMENCEMENT DATE BY % OF THE PRINCIPAL AMOUNT OF
THIS NOTE TO BE REDEEMED UNTIL THE REDEMPTION PRICE IS 100% OF
SUCH PRINCIPAL AMOUNT.
STATED REDEMPTION DATE(S) AND REDEMPTION PRICE(S):
Stated Redemption Date Redemption Price if Redemption Price
if Redeemed at Option Repaid at
Option of of Company Holder
IF ONE OR MORE STATED REDEMPTION DATES ARE SPECIFIED ABOVE, THE
REDEMPTION PRICE SHALL BE THE PERCENTAGE OF THE PRINCIPAL AMOUNT
OF THIS NOTE TO BE REDEEMED OR REPAID AS REFLECTED ABOVE.
REDEEMABLE AT OPTION OF: [THE COMPANY,] [THE HOLDER,] OR [THE
COMPANY OR THE HOLDER]
NOTICE PROVISIONS FOR REDEMPTION ON A STATED REDEMPTION DATE:
OTHER PROVISIONS:
Sears Roebuck Acceptance Corp., a corporation duly
organized and existing under the laws of the State of New York
(herein
referred to as the "Company", which term includes any successor
corporation under the indenture hereinafter referred to), for
value received, hereby promises to pay to
or registered assigns, upon presentation and surrender of this
Note on the Maturity Date shown above (except to the extent
redeemed prior to the Maturity Date) at the office or agency of
the Company in the Borough of Manhattan of The City of New York,
or, at the option of the Holder, such office or agency, if any,
maintained by the Company in the city in which the principal
executive offices of the Company are located or the city in
which the principal corporate trust office of the Trustee is
located, the principal sum of
Principal Amount Specified Currency
and to pay interest thereon at the rate per annum equal to the
Initial Interest Rate shown above until the first Interest Reset
Date shown above and thereafter at the rate determined in
accordance with the provisions on the reverse hereof depending
on the Interest Rate Basis shown above.
This Note will bear interest from the Original Issue Date
specified above or from the most recent Interest Payment Date to
which interest on this Note has been paid or duly provided for.
Interest on this Note shall be payable on the Interest
Payment Dates and on the Maturity Date indicated above (or the
date of redemption), except that if this Note was originally
issued between a Regular Record Date and an Interest Payment
Date, the first payment of interest will be made on the Interest
Payment Date following the next succeeding Regular Record Date to
the registered Holder on such next succeeding Regular Record
Date. If any Interest Payment Date would fall on a day that is
not a Business Day, such Interest Payment Date shall be the next
succeeding Business Day (or, if the Interest Rate Basis on this
Note is LIBOR, if such day falls in the next calendar month, the
next preceding Business Day). If the Maturity Date of this Note
falls on a day that is not a Business Day, the payment of
interest and principal may be made on the next succeeding
Business Day with the same force and effect as if made at
maturity, and no interest on such payment shall accrue for the
period from and after the Maturity Date.
The Regular Record Date shall be the date 15 calendar days
prior to each Interest Payment Date, whether or not such date
shall be a Business Day.
"Business Day" as used herein means each Monday, Tuesday,
Wednesday, Thursdayor Friday (a) that is not a legal holiday for
banking institutions in any of the City of Wilmington, Delaware,
the City of Chicago, Illinois, The City of New York, New York or
the city in which the principal corporate trust office of the
Trustee is located, and (b) if this Note is denominated in a
currency other than Dollars, that is not a legal holiday for
banking institutions in any of the City of Wilmington, Delaware,
the City of Chicago, Illinois, the City of New York, New York or
_________________________________________________________
Principal Financial Center of Country Issuing Currency
(or Brussels for European Currency Units) and (c) if the
Interest Rate Basis with respect to this Note is LIBOR, that is
a day on which dealings in deposits in U.S. dollars are
transacted in the London interbank market and is not a legal
holiday for banking institutions in any of the City of
Wilmington, Delaware, the City of Chicago, Illinois or the City
of New York, New York.
The principal of (and premium, if any), and interest on,
this Note is payable by the Company in the Specified Currency.
Interest payable on any Interest Payment Date (other than
Defaulted Interest) shall be payable to the person who is the
registered Holder at the close of business on the immediately
preceding Regular Record Date. Interest payable upon redemption
or at maturity (other than a redemption or maturity occurring on
an Interest Payment Date) will be paid to the same person to
whom the principal amount of this Note is payable.
Payment of principal of (and premium, if any), and interest
on, this Note (if the Holder of this Note is a Depository as
defined in the Indenture referred to on the reverse hereof or a
nominee
of such a Depository) will be made in accordance with any
applicable provisions of such written agreement between the
Company, the Trustee and such Depository (or its nominee) as may
be in effect from time to time or (if the Holder of this Note
holds an aggregate principal amount of $10,000,000 or more of
Notes with respect to which such payment of principal (and
premium, if any) or interest, as applicable, is to be made on
such day) will be made by wire transfer if the Holder shall have
designated in writing to the Trustee an account with a bank
located in the country issuing the Specified Currency or such
other country as shall be satisfactory to the Company and the
Trustee. If payment of interest is to be made by wire transfer,
such information must be received by the Trustee at its
corporate trust office in the Borough of Manhattan of The City
of New York on or prior to the Regular Record Date for an
Interest Payment Date. The Trustee will, subject to applicable
laws and regulations and until it receives notice to the
contrary, make such payment to such Holder by wire transfer to
the designated account. If a payment of interest is not made in
accordance with such a written agreement or by wire transfer,
payment will be made by check. Checks for payment of interest
on an Interest Payment Date will be mailed to the Holder at the
address of such Holder appearing on the Security Register on the
applicable Regular Record Date.
To receive payment of a U.S. dollar-denominated Note upon
redemption or at maturity, a Holder must make presentation and
surrender of such Note on or before the Redemption Date or
Maturity Date, as applicable. Payment (other than payment in
accordance with a written agreement between the Company, the
Trustee and a Depository (or its nominee) as set forth above)
will be made by check unless proper wire instructions are on
file with the Trustee or are received at presentment. To
receive payment of a Note denominated in a Foreign Currency upon
redemption or at maturity, a Holder must make presentation and
surrender not less than two Business Days prior to the
Redemption Date or Maturity Date, as applicable. Upon
presentation and surrender of a Note denominated in a Foreign
Currency at any time after the date two Business Days prior to
the Redemption Date or Maturity Date, as applicable, the Company
will pay the principal amount (and premium, if any) of such
Note, and any interest due upon redemption or at maturity
(unless the Redemption Date or Maturity Date is an Interest
Payment Date), two Business Days after such presentation and
surrender.
The Company will pay any administrative costs imposed by
banks in connection with sending payments by wire transfer, but
any tax, assessment or governmental charge imposed upon payments
will be borne by the Holders of the Notes in respect of which
payments are made.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, and such further provisions
shall for all proposes have the same effect as though fully set
forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof, or become valid or
obligatory for any purpose, until the certificate of
authentication hereon shall have been signed by or on behalf of
the Trustee under such Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated:
SEARS ROEBUCK
ACCEPTANCE CORP.
By
CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated
and referred to in the
within-mentioned Indenture. President
THE CHASE MANHATTAN BANK,
as Trustee By
By
Authorized Signatory Vice President and
Assistant Secretary
<PAGE>
SEARS ROEBUCK ACCEPTANCE CORP.
Medium-Term Note Series IV
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, as Trustee; to which indenture and all
indentures supplemental thereto (herein collectively called the
"Indenture") reference is hereby made for a specification of the
rights and limitation of rights thereunder of the Holders of the
Securities, the rights and obligations thereunder of the Company
and the rights, duties and immunities thereunder of the Trustee.
The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if
any) at different rates, may be subject to different redemption
provisions (if any), may be subject to different covenants and
defaults and may otherwise vary as in the Indenture provided.
This Note is one of a series designated as the "Medium-Term
Notes Series IV" (hereinafter referred to as the "Notes") of the
Company, up to $1,750,000,000 in aggregate principal amount.
All terms used in this Note which are defined in the Indenture
and which are not otherwise defined in this Note shall have the
meanings assigned to them in the Indenture.
For purposes of the Notes, the term "Fixed Charge Coverage
and Ownership Agreement" shall mean the Fixed Charge Coverage and
Ownership Agreement as extended by the Extension Agreement
relating to debt securities of which the Notes are a part.
This Note will bear interest at a rate per annum equal to
the Initial Interest Rate shown on the face hereof until the
first Interest Reset Date shown on the face hereof and thereafter
at the rate determined in accordance with the applicable
provisions below by reference to the Interest Rate Basis shown on
the face hereof based on the Index Maturity, if any, shown on the
face hereof (i) plus or minus the Spread, if any, specified on
the face hereof, or (ii) multiplied by the Spread Multiplier, if
any, specified on the face hereof. The rate of interest on this
Note shall be reset on each Interest Reset Date; provided,
however, that the Initial Interest Rate shall be in effect from
the Original Issue Date to the first Interest Reset Date. If
any Interest Reset Date would be a day that is not a Market Day,
the Interest Reset Date shall be postponed to the next day that
is a Market Day, except that if the Interest Rate Basis on this
Note is LIBOR and if such Market Day is in the next succeeding
calendar month, such Interest Reset Date shall be the
immediately preceding Market Day. The term "Market Day" means
any day that is not a legal holiday for banking institutions in
The City of New York, except that if the Interest Rate Basis on
this Note is LIBOR, "Market Day" shall mean any such day on
which dealings in deposits in U.S. dollars are transacted in the
London interbank market.
The "Interest Determination Date" pertaining to an Interest
Reset Date, if the Interest Rate Basis for this Note is the
Commercial Paper Rate, Prime Rate, LIBOR, CD Rate, CMT Rate or
Federal Funds Rate, shall be the second Market Day preceding
such Interest Reset Date. The "Interest Determination Date"
pertaining to an Interest Reset Date, if the Interest Rate Basis
for this Note is the Treasury Rate, shall be the day of the week
in which such Interest Reset Date falls on which Treasury bills
would normally be auctioned. Treasury bills are usually sold at
auction on the Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the
following Tuesday, except that such auction may be held on the
preceding Friday. If the Interest Rate Basis on this Note is
the Treasury Rate and, as the result of a legal holiday, an
auction is so held on the preceding Friday, such Friday shall be
the Interest Determination Date pertaining to the Interest Reset
Date occurring in the next succeeding week. If an auction date
shall fall on any Interest Reset Date, then, if the Interest
Rate Basis on this Note is the Treasury Rate, such Interest
Reset Date shall instead be the first Market Day immediately
following such auction date.
The "Calculation Date" pertaining to an Interest
Determination Date shall be the earlier of (i) the tenth calendar
day after each Interest Determination Date or, if such day is not
a Business Day, the next succeeding Business Day or (ii) the
Business Day immediately preceding the applicable Interest
Payment Date or the date of maturity, redemption or repayment.
Determination of Commercial Paper Rate. If the Interest
Rate Basis on this Note is the Commercial Paper Rate, the
Commercial Paper Rate with respect to this Note for each Interest
Reset Date shall equal the Money Market Yield (calculated as
described below) of the per annum rate (quoted on a bank discount
basis) for the relevant Interest Determination Date for
commercial paper having the Index Maturity specified on the face
hereof as such rate is published by the Board of Governors of the
Federal Reserve System in "Statistical Release H.15(519) Selected
Interest Rates" or any successor publication of the Board of
Governors of the Federal Reserve System ("H.15(519)") under the
heading "Commercial Paper," or such other heading representing
commercial paper of non-financial issuers whose bond rating is
"AA," or the equivalent, from a nationally recognized statistical
rating agency. In the event that such rate is not published
prior to 9:00 A.M., New York City time, on the relevant
Calculation Date, then the Commercial Paper Rate with respect to
such Interest Reset Date shall be the Money Market Yield of such
rate on such Interest Determination Date for commercial paper
having the Index Maturity specified on the face hereof as
published by the Federal Reserve Bank of New York in
its daily statistical release, "Composite 3:30 P.M. Quotations
for U.S. Government Securities" or any successor publication
published by the Federal Reserve Bank of New York ("Composite
Quotations") under the heading "Commercial Paper." If by 3:00
P.M., New York City time, on such Calculation Date such rate is
not yet published in either H.15(519) or Composite Quotations,
the Commercial Paper Rate with respect to such Interest Reset
Date shall be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean of the offered per
annum rates (quoted on a bank discount basis), as of 11:00 A.M.,
New York City time, on such Interest Determination Date, of
three leading dealers of commercial paper in The City of New
York selected by the Calculation Agent for commercial paper of
the Index Maturity specified on the face hereof placed for an
industrial issuer whose bond rating is "AA", or the equivalent,
from a nationally recognized statistical rating agency;
provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in
this sentence, the Commercial Paper Rate with respect to such
Interest Reset Date shall be the Commercial Paper Rate in effect
on such Interest Determination Date.
"Money Market Yield" means the rate for which is quoted on
a bank discount basis, a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D X 360 X 100
360 - (D X M)
where "D" refers to the per annum rate for a security, quoted on
a bank discount basis and expressed as a decimal; and "M" refers
to the number of days in the period for which accrued interest
is being calculated.
Determination of Prime Rate. If the Interest Rate Basis on
this Note is the Prime Rate, the Prime Rate with respect to this
Note for each Interest Reset Date shall equal the rate set forth
for the relevant Interest Determination Date in H.15(519) under
the heading "Bank Prime Loan." In the event that such rate is
not published prior to 9:00 A.M., New York City time, on the
relevant Calculation Date, then the Prime Rate with respect to
such Interest Reset Date shall be the arithmetic mean of the
rates of interest publicly announced by each bank that appears
on the display designated as page "USPRIME1" on the Reuter
Monitor Money Rates Service (or such other page as may replace
the USPRIME1 page on that service for the purpose of displaying
prime rates or base lending rates of major United States banks)
("Reuters Screen USPRIME1 Page") as such bank's prime rate or
base lending rate as in effect for such Interest Determination
Date as quoted on the Reuters Screen USPRIME1 Page on such
Interest Determination Date. If fewer than four such rates
appear on the Reuters Screen USPRIME1 Page on such Interest
Determination Date, the Prime Rate with respect to such Interest
Reset Date shall be the arithmetic mean of the prime rates or
base lending rates (quoted on the basis of the actual number of
days in the year divided by a 360-day year) as of the close of
business on such Interest Determination Date by three major
banks in The City of New York selected by the Calculation Agent;
provided, however, that if fewer than three banks selected as
aforesaid by the Calculation Agent are quoting as mentioned in
this sentence, the Prime Rate with respect to such Interest
Reset Date will be the Prime Rate in effect on such Interest
Determination Date.
Determination of LIBOR. If the Interest Rate Basis on this
Note is LIBOR, LIBOR with respect to this Note for each Interest
Reset Date shall be determined in accordance with the following
provisions:
(i) On the relevant Interest Determination Date,
LIBOR will be the rate for deposits in U.S. dollars having the
Index
Maturity specified on the face hereof, commencing on the second
Market Day immediately following such Interest Determination
Date that appears on the display designated as page "3750" on
the Dow Jones Telerate Service (or such other page as may
replace page 3750 on that service for the purposes of displaying
London interbank offered rates of major banks) ("Telerate Page
3750") as of 11:00 A.M., London time, on such Interest
Determination Date. If such rate does not appear on Telerate
Page 3750, LIBOR with respect to such Interest Reset Date shall
be determined as described in (ii) below.
(ii) With respect to an Interest Determination Date
on which no such rate appears on Telerate Page 3750 as described
in (i) above, LIBOR shall be determined on the basis of the rates
at approximately 11:00 A.M., London time, on such Interest
Determination Date at which deposits in U.S. dollars having the
Index Maturity specified on the face hereof are offered to prime
banks in the London interbank market by four major banks in the
London interbank market selected by the Calculation Agent
commencing on the second Market Day immediately following such
Interest Determination Date and in a principal amount equal to
an amount of not less than U.S.$1,000,000 that in the
Calculation Agent's judgment is representative for a single
transaction in such market at such time (a "Representative
Amount"). The Calculation Agent shall request the principal
London office of each of such banks to provide a quotation of
its rate. If at least two such quotations are provided, LIBOR
with respect to such Interest Reset Date shall be the arithmetic
mean of such quotations. If fewer than two quotations are
provided, LIBOR with respect to such Interest Reset Date shall
be the arithmetic mean of the rates quoted at approximately
11:00 A.M., New York City time, on such Interest Determination
Date by three major banks in The City of New York, selected by
the Calculation Agent, for loans in U.S. dollars to leading
European banks having the Index Maturity specified on the face
hereof commencing on the Interest Reset Date and in a
Representative Amount; provided, however, that if fewer than
three banks selected as aforesaid by the Calculation Agent are
quoting as mentioned in this sentence, LIBOR with respect to
such Interest Reset Date shall be the LIBOR in effect on such
Interest Determination Date.
Determination of Treasury Rate. If the Interest Rate Basis
on this Note is the Treasury Rate, the Treasury Rate with respect
to this Note for each Interest Reset Date shall equal the rate
for the auction on the relevant Interest Determination Date of
direct obligations of the United States ("Treasury bills")
having the Index Maturity specified on the face hereof as
published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Auction Average (Investment)" or, if
not so published by 9:00 A.M., New York City time, on the
relevant Calculation Date, the auction average rate (expressed
as a bond equivalent, on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) for such auction as
otherwise announced by the United States Department of the
Treasury. In the event that the results of such auction of
Treasury bills having the Index Maturity specified on the face
hereof are not published or reported as provided above by 3:00
P.M., New York City time, on such Calculation Date, or if no
such auction is held during such week, then the Treasury Rate
shall be the rate set forth in H.15(519) for the relevant
Interest Determination Date for the Index Maturity specified on
the face hereof under the heading "U.S. Government
Securities/Treasury Bills/Secondary Market." In the event such
rate is not so published by 3:00 P.M., New York City time, on
the relevant Calculation Date, the Treasury Rate with respect to
such Interest Reset Date shall be calculated by the Calculation
Agent and shall be a yield to maturity (expressed as a bond
equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) of the arithmetic mean
of the secondary market bid rates as of approximately 3:30 P.M.,
New York City time, on such Interest Determination Date, of
three primary United States government securities dealers in The
City of New York selected by the Calculation Agent for the issue
of Treasury bills with a remaining maturity closest to the Index
Maturity specified on the face hereof; provided, however, that
if fewer than three dealers selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the
Treasury Rate with respect to such Interest Reset Date shall be
the Treasury Rate in effect on such Interest Determination Date.
Determination of CD Rate. If the Interest Rate Basis on
this Note is the CD Rate, the CD Rate with respect to this Note
for
each Interest Reset Date shall equal the rate for the relevant
Interest Determination Date for negotiable certificates of
deposit having the Index Maturity specified on the face hereof
as published in H.15(519) under the heading "CDs (Secondary
Market)". In the event that such rate is not published prior to
9:00 A.M., New York City time, on the relevant Calculation Date,
then the CD Rate with respect to such Interest Reset Date shall
be the rate on such Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified on
the face hereof as published in Composite Quotations under the
heading "Certificates of Deposit." If by 3:00 P.M., New York
City time, on such Calculation Date such rate is not published
in either H.15(519) or Composite Quotations, the CD Rate with
respect to such Interest Reset Date shall be calculated by the
Calculation Agent and shall be the arithmetic mean of the
secondary market offered rates, as of 10:00 A.M., New York City
time, on such Interest Determination Date, of three leading
nonbank dealers of negotiable U.S. dollar certificates of
deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United
States money market banks with a remaining maturity closest to
the Index Maturity specified on the face hereof in a
denomination of U.S.$5,000,000; provided, however, that if fewer
than three dealers selected as aforesaid by the Calculation
Agent are quoting as mentioned in this sentence, the CD Rate
with respect to such Interest Reset Date shall be the CD Rate in
effect on such Interest Determination Date.
Determination of Federal Funds Rate. If the Interest Rate
Basis on this Note is the Federal Funds Rate, the Federal Funds
Rate with respect to this Note for each Interest Reset Date
shall equal the rate on the relevant Interest Determination Date
for Federal Funds as published in H.15(519) under the heading
"Federal Funds (Effective)." In the event that such rate is not
published prior to 9:00 A.M., New York City time, on the
relevant Calculation Date, then the Federal Funds Rate with
respect to such Interest Reset Date will be the rate on such
Interest Determination Date as published in Composite Quotations
under the heading "Federal Funds/Effective Rate". If by 3:00
P.M., New York City time, on such Calculation Date such rate is
not published in either H.15(519) or Composite Quotations, the
Federal Funds Rate with respect to such Interest Reset Date
shall be calculated by the Calculation Agent and shall be the
arithmetic mean of the rates, as of 9:00 A.M., New York City
time, on such Interest Determination Date, for the last
transaction in overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of New York
selected by the Calculation Agent; provided, however, that if
fewer than three brokers selected as aforesaid by the
Calculation Agent are quoting as mentioned in this sentence, the
Federal Funds Rate with respect to such Interest Reset Date
shall be the Federal Funds Rate in effect on such Interest
Determination Date.
Determination of CMT Rate. If the Interest Rate Basis on
this Note is the CMT Rate, the CMT Rate with respect to this Note
for each Interest Reset Date shall equal the rate displayed on
the Designated CMT Telerate Page under the caption "...Treasury
Constant Maturities...Federal Reserve Board Release
H.15...Mondays Approximately 3:45 P.M.," under the column for
the Designated CMT Maturity Index for (i) if the Designated CMT
Telerate Page is 7055, the rate on such Interest Determination
Date and (ii) if the Designated CMT Telerate Page is 7052, the
week, or the month, as applicable, ended immediately preceding
the week in which the related Interest Determination Date
occurs. If such rate is no longer displayed on the relevant
page, or if not displayed by 3:00 P.M., New York City time, on
the relevant Calculation Date, the CMT Rate shall be such
treasury constant maturity rate for the Designated CMT Maturity
Index as published in the relevant H.15(519). If such rate is
no longer published, or if not published by 3:00 P.M., New York
City time, on the relevant Calculation Date, the CMT Rate shall
be such treasury constant maturity rate for the Designated CMT
Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the Interest Determination
Date with respect to such Interest Reset Date as may then be
published by either the Board of Governors of the Federal
Reserve System or the United States Department of the Treasury
that the Calculation Agent determines to be comparable to the
rate formerly displayed on the Designated CMT Telerate Page and
published in the relevant H.15(519). If such information is not
published by 3:00 P.M., New York City time, on the relevant
Calculation Date, the CMT Rate shall be calculated by the
Calculation Agent and will be a yield to maturity, based on the
arithmetic mean of the secondary market closing offer side
prices as of approximately 3:30 P.M., New York City time, on the
Interest Determination Date reported, according to their written
records, by three leading primary United States government
securities dealers (each, a "Reference Dealer") in The City of
New York selected by the Calculation Agent (from five such
Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality,
one of the highest) and the lowest quotation (or, in the event
of equality, one of the lowest)), for the most recently issued
direct noncallable fixed rate obligations of the United States
("Treasury Notes") with an original maturity of approximately
the Designated CMT Maturity Index and a remaining term to
maturity of not less than such Designated CMT Maturity Index
minus one year. If three or four (and not five) of such
Reference Dealers are quoting, than the CMT Rate shall be based
on the arithmetic mean of the offer prices obtained and neither
the highest nor the lowest of such quotes will be eliminated.
If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate shall be calculated by the Calculation
Agent and will be a yield to maturity based on the arithmetic
mean of the secondary market offer side prices as of
approximately 3:30 P.M., New York City time, on the Interest
Determination Date of three Reference Dealers in The City of New
York (from five such Reference Dealers selected by the
Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest
quotation (or, in the event of equality, one of the lowest)),
for Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated
CMT Maturity Index and in an amount of at least $100 million.
If three or four (and not five) of such Reference Dealers are
quoting, than the CMT Rate shall be based on the arithmetic mean
of the offer prices obtained and neither the highest nor the
lowest of such quotes will be eliminated; provided, however,
that if fewer than three Reference Dealers selected by the
Calculation Agent are quoting, the CMT Rate shall be the CMT
Rate in effect on such Interest Determination Date. If two
Treasury Notes with an original maturity as described in the
second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes
for the Treasury Note with the shorter remaining term to
maturity will be used.
Notwithstanding the foregoing, the interest rate on this
Note shall not be greater than the Maximum Interest Rate, if any,
or
less than the Minimum Interest Rate, if any, shown on the face
hereof.
At the request of the Holder hereof, the Calculation Agent
will provide to the Holder hereof the interest rate then in
effect and, if determined, the interest rate which will become
effective as of the next Interest Reset Date. The Calculation
Agent shall calculate the interest rate hereon in accordance
with the provisions hereof on or before each Calculation Date.
The Calculation Agent's determination of any interest rate will
be final and binding in the absence of manifest error.
Unless otherwise specified on the face of this Note,
accrued interest on this Note from the date of issue or from the
last
date to which interest has been paid shall be calculated by
multiplying the face amount hereof by an accrued interest
factor. Unless otherwise specified on the face of this Note,
such accrued interest factor is computed by adding the interest
factor calculated for each day from the date of issue, or from
the last date to which interest has been paid, to but excluding
the date for which accrued interest is being calculated. Unless
otherwise specified on the face of this Note, the interest
factor (expressed as a decimal, rounded if necessary to the next
higher one hundred thousandth of a percentage point for each
such day) shall be computed by dividing the interest rate
(expressed as a decimal) applicable to such date by 360 if the
Interest Rate Basis with respect to this Note is the Commercial
Paper Rate, Prime Rate, LIBOR, CD Rate or Federal Funds Rate, or
by the actual number of days in the year, if the Interest Rate
Basis with respect to this Note is the Treasury Rate or the CMT
Rate. The applicable interest rate on any Interest Reset Date
will be the interest rate as reset on such date. The applicable
interest rate on any other day will be the interest rate from
the immediately preceding Interest Reset Date (or, if none, the
Initial Interest Rate).
Payments of interest on this Note with respect to any
Interest Payment Date or Maturity Date (or date of redemption)
will
include interest accrued to but excluding such Interest Payment
Date or Maturity Date (or date of redemption); provided,
however, that if the Interest Reset Dates with respect hereto
are daily or weekly, interest payable hereon on any Interest
Payment Date, other than interest payable on the date on which
principal hereon is payable, will include interest accrued to
but excluding the day following the next preceding Regular
Record Date.
The Notes are issuable only in registered form without
coupons and will be either (a) Book-Entry Notes represented by
one or
more global notes (each a "Global Note") recorded in the
book-entry system maintained by the Depository or (b)
certificated notes issued to, and registered in the names of,
the beneficial owners or their nominees ("Certificated Notes").
Notes are issuable in minimum denominations of (i) in the case
of Notes denominated in Dollars, U.S.$1,000 and in any larger
amount in integral multiples of $1,000, and (ii) in the case of
Notes denominated in any Foreign Currency, the equivalent in
such Foreign Currency determined in accordance with the Market
Exchange Rate for such Foreign Currency on the Business Day
immediately preceding the date on which the Company accepts an
offer to purchase a Note, of U.S. $1,000 (rounded to an integral
multiple of 1,000 units of the Foreign Currency), and in any
larger amount in integral multiples of 1,000 units. In the
manner and subject to the limitations provided in the Indenture,
the Global Notes or Certificated Notes are exchangeable, without
charge except for any tax or other governmental charge imposed
in relation thereto, for other Notes of authorized denominations
for a like aggregate principal amount, at the office or agency
of the Company in the Borough of Manhattan of The City of New
York, or, at the option of the Holders thereof, such office or
agency, if any, maintained by the Company in the city in which
the principal executive offices of the Company are located or
the city in which the principal corporate trust office of the
Trustee is located.
Unless this Note is denominated in Dollars, in the event
that the currency in which this Note is denominated is not
available for payment at a time at which any payment is required
hereunder due to the imposition of exchange controls or other
circumstances beyond its control, the Company may, in full
satisfaction of its obligation to make such payment, make
instead a payment in an equivalent amount of Dollars, determined
in accordance with the Market Exchange Rate for such currency on
the latest date for which such rate was established on or before
the date on which payment is due, and such substituted payment
of Dollars shall not constitute a default under this Note or the
Indenture.
If a Redemption Commencement Date is specified above, this
Note may be redeemed, whether or not any other Note is
concurrently redeemed, at the option of the Company, as a whole,
or from time to time in part, on any Business Day on or after the
Redemption Commencement Date and prior to the Maturity Date, upon
mailing by first-class mail, postage prepaid, a notice of such
redemption not less than 30 nor more than 60 days prior to the
Redemption Date, to the Holder of this Note at such Holder's
address appearing in the Security Register, as provided in the
Indenture (provided that, if the Holder of this Note is a
Depository or a nominee of a Depository, notice of such
redemption shall be given in accordance with any applicable
provisions of such written agreement between the Company, the
Trustee and such Depository (or its nominee) as may be in effect
from time to time), at the Redemption Price specified on the
face of this Note (expressed in percentages of the principal
amount hereof to be redeemed) together in each case with
interest accrued to the Redemption Date (subject to the right of
the Holder of record on a Regular Record Date to receive
interest due on an Interest Payment Date). If a Stated
Redemption Date or Stated Redemption Dates are specifed above,
this Note may be redeemed or repaid, whether or not any other
Note is concurrently redeemed or repaid, at the option of the
Company, the Holder, or either the Company or the Holder, as
specified above, as a whole or in part, on such Stated
Redemption Date, at the Redemption Price set forth in the table
above (expresed in percentages of the principal amount hereof to
be redeemed), together in each case with interest accrued to the
Redemption Date (subject to the right of the Holder of record on
a Regular Record Date to receive interest due on an Interest
Payment Date) upon delivery of the notice specified above. In
the event of redemption of this Note in part only, a new Note or
Notes of this series, and of like tenor, for the unredeemed
portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.
In case a default, as defined in the Indenture, shall occur
and be continuing with respect to the Notes, the principal amount
of all Notes then outstanding under the Indenture may be declared
or may become due and payable upon the conditions and in the
manner and with the effect provided in the Indenture. The
Indenture provides that such declaration may in certain events
be annulled by the Holders of a majority in principal amount of
the Notes outstanding.
To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or of
any indenture supplemental thereto, and of the rights and
obligations of the Company and the Holders of the Notes, may be
made without the consent of any Holders of Notes, for the
limited purposes described in Section 11.1 of the Indenture.
To the extent permitted by, and as provided in, the
Indenture, modifications or alterations of the Indenture, or of
any indenture supplemental thereto, and of the rights and
obligations of the Company and the Holders of the Notes, may be
made with the consent of the Company by the affirmative vote or
consent of the Holders of not less than a majority in principal
amount of the Securities then outstanding (as defined in the
Indenture) of each series to be affected, evidenced as provided
in the Indenture; provided, however, that no such modification
or alteration shall (i) change the stated maturity of the
principal of (and premium, if any), or the interest on, any
Security, or reduce the principal amount of (and premium, if
any), or the rate of interest on, any Security, or change the
Currency in which the principal of (and premium, if any), or
interest on such Security is denominated or payable, or reduce
the amount of the principal of an Original Issue Discount
Security that would be payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.1 of
the Indenture without the consent of the Holder of each
outstanding Security so affected, or (ii) reduce the percentage
of Securities, the vote or consent of the Holders of which is
required for such modifications and alterations, without the
consent of the Holders of all Securities affected. The
Indenture also provides that the Holders of a majority in
principal amount of the Securities of any series then
outstanding may waive any past default with respect to
Securities of such series under the Indenture and its
consequences, except a default in the payment of the principal
of (or premium, if any), or interest on, any of the Securities.
This Note is transferable by the registered Holder hereof
or by his attorney duly authorized in writing at the office or
agency of the Company in the Borough of Manhattan of The City of
New York, or, at the option of the Holder hereof, such office or
agency, if any, maintained by the Company in the city in which
the principal executive offices of the Company are located or
the city in which the principal corporate trust office of the
Trustee is located, without charge except for any tax,
assessment or other governmental charge imposed in relation
thereto, but only in the manner and subject to the limitations
provided in the Indenture and upon surrender of this Note. Upon
any such transfer a Note or Notes of authorized denominations
for a like aggregate principal amount and bearing a number not
contemporaneously outstanding will be issued in exchange herefor.
The Company, the Trustee, any Authenticating Agent, any
paying agent and any Security registrar may deem and treat the
registered Holder hereof as the absolute owner hereof (whether
or not this Note shall be overdue and notwithstanding any notice
of ownership or other writing hereon by anyone other than the
Company or any Security registrar) for the purpose of receiving
payment of or on account of the principal hereof (and premium,
if any), and interest hereon, and for all other purposes, and
none of the Company, the Trustee, an Authenticating Agent, a
paying agent or the Security registrar shall be affected by any
notice to the contrary. All such payments shall be valid and
effectual to satisfy and discharge the liability upon this Note
to the extent of the sum or sums so paid.
No recourse under or upon any obligation, covenant or
agreement of the Indenture or of this Note, or for any claim
based thereon or otherwise in respect thereof, shall be had
against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that the Indenture and this Note
are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred
by the incorporators, stockholders, officers or directors, as
such, of the Company or of any successor corporation, or any of
them, because of the creation of the indebtedness authorized by
the Indenture, or under or by reason of the obligations,
covenants or agreements contained in the Indenture or this Note
or implied thereform; and that any and all such personal
liability, either at common law or in equity or by constitution
or statute, or, any and all such rights and claims against,
every such incorporator, stockholder, officer or director, as
such, because of the creation of the indebtedness authorized by
the Indenture, or under or by reason of the obligations,
covenants or agreements contained in the Indenture or this Note
or implied therefrom, are, by acceptance of this Note, hereby
expressly waived and released as a condition of, and as
consideration for, the issue of this Note. In the event of any
sale or transfer of its assets and liabilities substantially as
an entirety to a successor corporation, the predecessor
corporation may be dissolved and liquidated as more fully set
forth in the Indenture.
All Dollar amounts used in or resulting from calculations
referred to in this Note shall be rounded to the nearest cent
(with one half cent being rounded upwards).
This Note shall be governed by, and construed in accordance
with, the internal laws of the State of Delaware.<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: I
or we assign and transfer this Note to (Insert assignee's
soc. sec. or tax I.D. no.)
____________________________________________ _________________
(Print or type assignee's name, address and zip code)
___________________________________________________________
______________________________________________________________
_______________________________________________________
and irrevocably appoint _______________________________agent
to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
________________________________________________________
Date __________________________
Your signature _____________________________________
_______________________________________________________________
(Sign exactly as your name appears on the other side
of this Note. The signature to this assignment must be
guaranteed
by a commercial bank or trust company having its principal office
or a correspondent in The City of New York or by a member of The
New York Stock Exchange.)
Exhibit 4.4
FORM OF NOTE
[FORM OF FACE OF NOTE]
Number $.............
SEARS ROEBUCK ACCEPTANCE CORP.
7% Note due June 15, 2007
7% 7%
Due 2007 Due 2007
Sears Roebuck Acceptance Corp., a corporation organized and
existing under the laws of the State of Delaware (hereinafter
called the "Company"), for value received, hereby promises to pay
to , or registered
assigns, the principal sum of Dollars
upon presentation and surrender of this Note, on the fifteenth
day of June, 2007, 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, 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 7% 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 December 15 or June
15, as the case may be, next preceding the date hereof to which
interest has been paid on the Notes referred to on the reverse
hereof (unless the date hereof is the date to which interest has
been paid on such Notes, in which case from the date hereof, or
unless the date hereof is prior to December 15, 1997, in which
case from July 1, 1997), semiannually, commencing on December 15,
1997, on December 15 and June 15, until payment of said principal
sum has been made or duly provided for. Notwithstanding the
foregoing, if this Note is dated after any December 1 and before
the following December 15, or after any June 1 and before the
following June 15, then this Note shall bear interest from such
following December 15 or June 15, provided, however, that if the
Company shall default in the payment of interest due on such
following December 15 or June 15, this Note shall bear interest
from the next preceding December 15 or June 15 to which interest
has been paid on such Notes, or if no interest has been paid on
such Notes, then from July 1, 1997. The interest so payable on
any December 15 or June 15 will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof, be
paid to the person in whose name this Note is registered at the
close of business on the December 1 prior to such December 15 or
the June 1 prior to such June 15. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be
payable to the registered holder on such Interest Payment Date,
and may be paid to the Person in whose name this Note is
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to Noteholders not less
than 10 days prior to such Special Record Date, or may be paid,
at any time in any other lawful manner, all as more fully
provided in such Indenture.
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, and such further provisions
shall for all purposes have the same effect as though fully set
forth at this place.
This Note shall not be entitled to any benefit under the
Indenture referred to on the reverse hereof or any indenture
supplemental thereto, or become valid or obligatory for any
purpose, until the certificate of authentication hereon shall
have been signed by or on behalf of the Trustee under such
Indenture.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated: ........................................
Sears Roebuck Acceptance Corp.
By ___________________________________
President
By ____________________________________
Vice President 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
as Trustee
By:___________________________________
Authorized Officer
<PAGE>
[FORM OF REVERSE SIDE OF NOTE]
SEARS ROEBUCK ACCEPTANCE CORP.
7% Note due June 15, 2007
1. 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, 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 "7% Notes due June 15, 2007" of the Company, limited in
aggregate principal amount to $500,000,000 (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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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 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.
8. 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.
9. The Company will, subject to the exceptions and
limitations set forth below, pay such additional amounts (the
"Additional Amounts") to the holder of any Note who is a United
States Alien (as defined below) as may be necessary in order that
every net payment of the principal of or interest on such Note
after deduction or withholding for or on account of any present
or future tax, assessment or governmental charge imposed by the
United States (or any political subdivision or taxing authority
thereof or therein) upon, or as a result of, such payment, will
not be less than the amount provided for in such Note to be then
due and payable. However, the Company will not be required to
make any payment of Additional Amounts to any such holder for or
on account of:
(a) any such tax, assessment or other governmental
charge which would not have been so imposed but for the existence
of any present or former connection between such holder (or
between a fiduciary, settlor or beneficiary of, or a person
holding power over, such holder, if such holder is a partnership
or corporation) and the United States, including, without
limitation, such holder (or such fiduciary, settlor, beneficiary,
person holding a power, partner or shareholder) being or having
been a citizen or resident thereof or being, or having been,
engaged in a trade or business or present therein or having, or
having had, a permanent establishment therein;
(b) any estate, inheritance, gift, sales, transfer
or personal property tax or any similar tax, assessment or other
governmental charge;
(c) any tax, assessment or other governmental charge
imposed by reason of such holder's past or present status as a
personal holding company, foreign personal holding company,
controlled foreign corporation, passive foreign investment
company, private foundation or other tax exempt organization, in
each case with respect to the United States, or as a corporation
which accumulates earnings to avoid United States federal income
tax;
(d) any tax, assessment or other governmental charge
which is payable otherwise than by withholding from payments on
or in respect of any Note;
(e) any tax, assessment or other governmental charge
required to be withheld by any paying agent from any payment of
principal of or interest on any Note, if such payment can be made
without such withholding by any other paying agent;
(f) any tax, assessment or other governmental charge
which would not have been imposed but for the failure to comply
with certification, identification, documentation, information or
other reporting requirement concerning the nationality,
residence, identity or connection with the United States of the
holder or beneficial owner of such Note, if such compliance is
required by statute or by regulation of the United States or of
any political subdivision or taxing authority thereof or therein
as a precondition to relief or exemption from such tax,
assessment or other governmental charge;
(g) any tax, assessment or other governmental charge
imposed by reason of such holder's past or present status as the
actual or constructive owner of 10% or more of the total combined
voting power of all classes of stick of the Company entitled to
vote;
(h) any holder who is a fiduciary or partnership or
other than the sole beneficial owner of the Note, but only to the
extent that a beneficial owner of the Note, but only to he extent
that a beneficiary or settlor with respect to such fiduciary or a
member of such partnership or a beneficial owner of the Note
would not have been entitled to the payment of an additional
amount had such beneficiary, settlor, member or beneficial owner
been the holder of such Note, or
(i) any combination of items (a), (b), (c), (d), (e),
(f), (g) or (h).
The term "United States" means the United States of
America, the Commonwealth of Puerto Rico and each territory and
possession of the United States of America and the area subject
to its jurisdiction. The term "United States Alien" means any
person who, for United States federal income tax purposes, is a
foreign corporation, a non-resident alien individual, a non-
resident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which, as o the
United States, is a foreign corporation, a non-resident alien
individual or a non-resident alien fiduciary of a foreign estate
or trust.
Any additional amounts payable under this Paragraph and
Paragraph 10(a are herein referred to as "Additional Amounts,"
and all references herein to principal of an interest on the
Notes shall include such Additional Amounts.
10. (a) The Notes are not redeemable prior to maturity
except as provided under this Paragraph 10.
The Notes may be redeemed at the option of the
Company, as a whole but not in part, at any time prior to
maturity, upon the giving of a notice of redemption as described
below, at a redemption price equal to 100% of the principal
amount of the Noes together with accrued interest to the date
fixed for redemption (the "Redemption Amount") if the Company
determines that, as a result of (A) any change in or amendment to
the laws (or any regulations or rulings promulgated thereunder)
of the United States or of any political subdivision or taxing
authority thereof or therein, or any change in the application,
official interpretation or enforcement of such laws, regulations
or rulings, including a decision rendered by a court of competent
jurisdiction in the United States or any political subdivision
hereof, whether or not such decision was rendered with respect to
the Company; or (B) any action taken by a taxing authority which
action is generally applied or it taken with respect to the
Company, which change, amendment, action, decision or memorandum
is promulgated on or after July 1, 1997, there is a substantial
probability that the Company has or will become obligated to pay
Additional Amounts with respect to the Notes in accordance with
Paragraph 9 hereof, nd the Company cannot avoid such obligation
by taking reasonable measures available to it. Prior to the
publication of any notice of redemption of the Notes pursuant to
the foregoing, the Company shall deliver to the Trustee an
opinion of legal counsel to the Company stating that the Company
is entitled to effect such redemption and a certificate setting
forth facts showing that the conditions precedent to the right of
the Company to so redeem have occurred.
Notice of redemption will be given by the Company not less
than 30 nor more than 60 days prior to the date fixed for
redemption, which date and the redemption price will be specified
in the notice. Each notice shall be given in the manner
described in Paragraph 10(b).
(b) (i) Any redemption notice given under Paragraph
10(a) above shall state the date fixed for redemption an the
Redemption Amount. On the redemption date, the Company shall be
bound to redeem the Notes to which such notice relates at their
Redemption Amount upon presentment thereof. Notices to holders
shall be mailed by the Trustee, first class postage prepaid, at
their last addresses as they appear in the Security Register. If
applicable, notice of intention to redeem the Notes also shall be
given in the manner described in subparagraph (ii) below. Such
notice by publication shall b published at least once a week for
two successive weeks prior to the date fixed for redemption, the
first such publication to be not less than 30 days nor more than
60 days prior to the date fixed for redemption.
(ii) So long as the Notes are listed on the
Luxembourg Stock Exchange and such Exchange shall so require,
notice to holders of the Notes will be given in a daily newspaper
of general circulation in Luxembourg. If publication in
luxembourg is not practical such publication shall be made
elsewhere in Europe. The term "daily newspaper" shall mean
newspaper customarily published on each Business Day in morning
editions whether or not it shall be published in Saturday, Sunday
or holiday editions. Such publication is expected o be made int
the Luxembourg Wort. Such notices will be deemed to have been
given on the date of such publication. If by reason of the
temporary or permanent suspension of publication of any newspaper
or by reason of any other cause, it shall be impossible to make
publication of such notice in a daily newspaper as herein
provided, then such publication or other notice in lieu hereof,
as shall be made by the Trustee, shall constitute sufficient
publication of such notice, if such publication or other notice
shall, so far as may be possible, approximate the terms and
conditions of the publication in lieu of which it is given. The
Trustee shall promptly furnish to the Company and each other
paying agency a copy of each such notice so published.
11. No recourse shall be had for the payment of the
principal of or the interest on this Note or for any claim based
hereon or otherwise in any manner in respect hereof, or in
respect of the Indenture, against any incorporator, shareholder,
officer or director, past, present or future, of the Company or
of any predecessor or successor corporation, whether by virtue of
any constitutional provision or statute or rule of law, or by the
enforcement of any assessment or penalty or in any other manner,
all such liability being expressly waived and released by the
acceptance hereof and as part of the consideration for the issue
hereof. In the event of any sale or transfer of its assets and
liabilities substantially as an entirety to a successor
corporation, the predecessor corporation may be dissolved and
liquidated as more fully set forth in the Indenture.
Exhibit 5
July 9, 1997
Sears Roebuck Acceptance Corp.
3711 Kennett Pike
Greenville, Delaware 19807
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, Illinois 60179
Ladies and Gentlemen:
I am an Assistant General Counsel of Sears, Roebuck and Co.
("Sears"). I have examined (i) Registration Statement No. 333-
9817 as filed with the Securities and Exchange Commission on
August 8, 1996 thereto (the "Registration Statement") in
connection with the registration under the Securities Act of
1933, as amended (the "Act") of $4,000,000,000 aggregate initial
offering price of debt securities of Sears Roebuck Acceptance
Corp. (the "Company"), for several offerings to be made on a
continuous or delayed basis pursuant to the provisions of Rule
415 under the Act; (ii) the final prospectuses, dated May 13 and
June 13, 1997, relating to the offering and sale of
$4,000,000,000 of the aforesaid debt securities, which is part of
the Registration Statement (the "Prospectus"), and the Prospectus
Supplements, dated May 13, June 13 and June 25, 1997,
(collectively, the "Prospectus Supplement") relating to the
offering and sale of (a) $300,000,000 aggregate principal amount
of 6.95% Notes due May 15, 2002 (the "6.95% Notes"), (b) up to
$1,750,000,000 aggregate principal amount of Medium-Term Notes
Series IV ("Medium-Term Notes") and (c) $500,000,000 aggregate
principal amount of 7% Notes due June 15, 2007 (the "7% Notes")
of the Company; (iii) the Indenture dated as of May 15, 1995
between the Company and Chase Manhattan Bank, as Trustee,
relating to the aforesaid debt securities; (iv) (a) the
Underwriting Agreement dated May 13, 1997 among the Company,
Sears and Morgan Stanley & Co. Incorporated, Goldman, Sachs &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P.
Morgan Securities Inc., (b) the Underwriting Agreement dated June
25, 1997 among the Company, Sears and Goldman, Sachs & Co., as
Representatives of the several underwriters, (c) the Pricing
Agreement dated May 13, 1997 among the Company, Sears and Morgan
Stanley & Co. Incorporated, Goldman, Sachs & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities
Inc., as the several Underwriters identified in Schedule I
thereto, relating to the sale of the 6.95% Notes, (d) the Pricing
Agreement dated June 25, 1997 among the Company, Sears and
Goldman, Sachs & Co., as Representatives of the several
Underwriters identified in Schedule I thereto, relating to the
sale of the 7% Notes, and (e) the Distribution Agreement dated
June 13, 1997 among the Company, Sears, Goldman, Sachs & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan
Stanley & Co. Incorporated and Salomon Brothers Inc, as Agents
for the Medium-Term Notes; and (v) the form of (a) the 6.95%
Notes, (b) the 7% Notes, (c) the Fixed Rate Medium Term Notes and
(d) the Floating Rate Medium Term Notes. I am familiar with the
proceedings heretofore taken by the Company in connection with
the authorization, registration, issuance and sale of the Notes.
I am of the opinion that each of the 6.95% Notes and the 7%
Notes are, and the Medium-Term Notes, when issued in the manner
set forth in the Distribution Agreement, will be, legally issued
and binding obligations of the Company in accordance with their
terms, subject to insolvency, bankruptcy, reorganization,
moratorium, liquidation, fraudulent conveyance and transfer or
other similar laws relating to or affecting the enforcement of
creditors' rights generally or by general equity principles,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
I consent to the incorporation by reference of this opinion
into the Registration Statement, and to the references to me in
the Prospectus and Prospectus Supplement.
Very truly yours,
/S/ Nancy K. Bellis
Nancy K. Bellis
Exhibit 8
June 13, 1997
Sears Roebuck Acceptance Corp.
3711 Kennett Pike
Greenville, DE 19807
Gentlemen:
Sears Roebuck Acceptance Corp. ("SRAC") may issue up to U.S.
$1,750,000,000 of Medium-Term Notes Series IV (the "Notes") due
at least 9 months from the date of issue as described in the
Prospectus Supplement dated June 11, 1997 to the Prospectus dated
June 11, 1997 relating to the initial offering and sale of the
Notes (the "Prospectus").
This opinion is rendered to you in support of an opinion of
Robert J. Pence, Vice President, Law, of even date herewith,
rendered pursuant to Section 8(c) of the Distribution Agreement
dated August 22, 1996, among SRAC, Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co., Incorporated and Salomon Brothers Inc. (the "Distribution
Agreement").
As special tax counsel to SRAC, we have examined such
records and documents of SRAC as we deemed necessary and relevant
for
purposes of rendering our opinion as to the principal United
States federal income and estate tax consequences to persons
holding
Notes, including (i) the Prospectus, (ii) the Prospectus
Supplement, (iii) the Indenture dated as of May 15, 1995 between
The Chase Manhattan Bank, N.A., and SRAC, (iv) the form of Notes
to be issued under the Indenture, and (v) the Distribution
Agreement. Unless otherwise defined herein, all capitalized
terms shall have the meanings assigned to them in the Prospectus
and the Prospectus Supplement.
We have been advised and for purposes of our opinion assume
that SRAC will characterize all Notes issued under the Indenture
as indebtedness of SRAC for all United States federal income tax
purposes.
This opinion does not address:
(1) Special tax situations, such as dealers in
securities or currencies, Holders whose functional currency is
not the United States dollar, or persons holding Notes as a hedge
against currency risk or as part of a larger integrated financial
transaction;
(2) Notes issued under the Indenture with a term of 12
months or less at issue prices of less than their stated
redemption price at maturity, giving rise to original issue
discount for
federal income tax purposes;
(3) Notes issued under the Indenture providing for
payments of principal in amounts to be determined by reference to
an index;
(4) Notes which are denominated in more than one
currency; and
(5) Notes with original issue discount with a term of
more than five years from the date of issue and having a fixed
yield to maturity that equals or exceeds the sum of the
applicable federal rate for the calendar month in which the
obligation is issued plus five percentage points, including Notes
with maturities of more than five years that could have yields in
excess of the applicable federal rate plus five percentage points
because they provide for contingent or variable payments or
because they are subject to redemption before maturity.
On the basis of the foregoing, we are of the opinion that
under present United States federal income and estate tax laws
the principal United States federal income and estate tax
consequences to persons holding Notes are as follows:
In the opinion of Baker & McKenzie, all Notes issued under
the Indenture will be properly characterized as indebtedness of
SRAC, and SRAC will so characterize all such Notes for all United
States federal income tax purposes. This characterization by
SRAC will be binding on every Holder of a Note, unless the Holder
discloses its inconsistent characterization on such Holder's
federal income tax return. The Internal Revenue Service will not
be bound by the characterization of the Notes by SRAC and the
Holders.
United States Holders
As used herein, "United States Holder" means a Holder of a
Note who is, or which is, a United States Person. A "United
States Person" is (i) a citizen or resident of the United States
of America (including the States and the District of Columbia),
its territories, possessions and other areas subject to its
jurisdiction, including the Commonwealth of Puerto Rico (the
"United States"), (ii) a corporation or partnership created or
organized in the United States or under the laws of the United
States or of any State and (iii) an estate or trust the income of
which is subject to United States federal income taxation
regardless of its source.
Payments of Interest and Original Issue Discount. Stated
interest on a Note (whether in a foreign currency or U.S.
dollars) will be taxable to a United States Holder as ordinary
interest income at the time it accrues or is paid in accordance
with the United States Holder's method of accounting for tax
purposes, subject to the discussion in the succeeding paragraphs.
If Notes are issued at a discount from their stated
redemption price at maturity equal to or more than one-fourth of
one percent of the stated redemption price at maturity multiplied
by the number of full years to maturity, such Notes will be
original issue discount obligations ("Original Issue Discount
Notes"). The difference between the issue price and the stated
redemption price at maturity of each such Original Issue Discount
Note will constitute original issue discount ("Original Issue
Discount"). The stated redemption price at maturity will include
all payments other than interest based on a fixed rate or, unless
otherwise stated in a Pricing Supplement, a floating rate,
payable unconditionally at intervals of one year or less during
the entire term of the Original Issue Discount Notes ("Stated
Interest").
Each initial Holder of an Original Issue Discount Note will
be required to include in gross income, in each taxable year
during which the Original Issue Discount Note is held, a portion
of the Original Issue Discount calculated on a yield to maturity
basis in addition to Stated Interest, if any, paid on such Note,
regardless of the United States Holder's method of accounting for
tax purposes. A United States Holder should be aware that,
because of the above original issue discount rules, such Holder
will be required to include increasingly greater amounts of
Original Issue Discount in gross income in each successive
accrual period in advance of the receipt of the cash attributable
to such Original Issue Discount income.
A United States Holder of an Original Issue Discount Note
must include in gross income the sum of the daily portions of
Original Issue Discount with respect to an Original Issue
Discount Note for each day during the taxable year such Holder
holds such Note. The daily portion is determined by allocating
to each day of the accrual period a ratable portion of an amount
equal to the excess of (i) the Adjusted Issue Price (as defined
below) of the Original Issue Discount Note at the beginning of
the accrual period multiplied by the yield to maturity of such
Note (determined by compounding at the close of each accrual
period and adjusted for the length of the accrual period) over
(ii) the amount payable as Stated Interest, if any, on such Note
during such accrual period. United States Holders may accrue
Original Issue Discount using accrual periods of any length, and
such accrual periods may vary in length over the term of the
Original Issue Discount Note, provided that each accrual period
must be no longer than one year and each scheduled payment of
principal or interest must occur either on the final day of an
accrual period or on the first day of an accrual period.
The Adjusted Issue Price of an Original Issue Discount Note
at the start of any accrual period is the issue price of the
Original Issue Discount Note increased by the amount of Original
Issue Discount accrued during all prior accrual periods. A
United States Holder of an Original Issue Discount Note must
include in income accrued Original Issue Discount regardless of
whether such Holder uses a cash receipts and disbursements method
of tax accounting or an accrual basis of tax accounting.
The United States tax treatment of any Indexed Notes will be
described in the applicable Pricing Supplement.
The face of each Original Issue Discount Note will set forth
the issue date, issue price, yield to maturity, amount of
Original Issue Discount, and any other information required by
Treasury regulations. SRAC will furnish to the Internal Revenue
Service the amount of Original Issue Discount, the issue date and
any additional information required by Treasury regulations.
Holders, including subsequent Holders, will be required to
determine for themselves the reportable amount of Original Issue
Discount income for a year.
For a Holder who uses a cash receipts and disbursements
basis of tax accounting, if a receipt of payment of stated
interest is denominated in a foreign currency, the amount of
interest income will be the U.S. dollar value of the foreign
currency payment amount translated at the spot rate on the
payment date, regardless of whether the payment is in fact
converted to U.S. dollars. For a Holder who uses an accrual
basis of tax accounting, if an accrual of interest is denominated
in a foreign currency, the amount of interest income will be the
U.S. dollar value of the amount of interest accrued in foreign
currency translated at the appropriate accrual translation rate.
The "appropriate accrual translation rate" is the average spot
rate in effect during such accrual period or, at the Holder's
election, the spot rate on the last day of such accrual period
(or on the day of receipt of such interest if such day is within
five days of the end of the applicable accrual period). If the
latter translation convention is elected, such convention will
apply with respect to all other debt instruments held by the
Holder during or after the taxable year for which the election is
made. Upon receipt of the interest payment in foreign currency
or upon disposition of the Note, a Holder will recognize currency
gain or loss with respect to the accrued interest equal to the
difference between the Holder's accrued foreign currency
interest income translated at the appropriate accrual translation
rate and the U.S. dollar value of the foreign currency payment
translated at the spot rate on the payment date, regardless of
whether the payment is in fact converted to U.S. dollars.
In the case of Original Issue Discount Notes, Treasury
regulations provide similar rules for both cash basis and accrual
basis United States Holders for calculating currency gain or loss
with respect to accrued Original Issue Discount. Original Issue
Discount will accrue in the currency in which the Note is
denominated and will be translated into U.S. dollars at the
appropriate accrual translation rate. Upon receipt of the
accrued Original Issue Discount or the disposition of the Note,
such a Holder will recognize currency gain or loss with respect
to the accrued Original Issue Discount equal to the difference
between the Holder's accrued Original Issue Discount income
translated at the appropriate accrual translation rate and the
U.S. dollar value of the foreign currency payment translated at
the spot rate on the payment date or the date of disposition.
Currency gain or loss recognized by a Holder upon receipt of
a foreign currency payment will be treated as ordinary income or
loss. In accordance with current Treasury regulations, currency
gain or loss will not be treated as interest income or expense.
If a United States Holder acquires a Note (including an
Original Issue Discount Note) other than upon original issue for
an amount less than the principal amount or, in the case of an
Original Issue Discount Note, less than the Revised Issue Price
(defined as the sum of the issue price of the Note and the
aggregate amount of Original Issue Discount includible in gross
income for all periods prior to the acquisition without regard to
acquisition premium) of such Original Issue Discount Note on the
date of acquisition, the Note may be considered to be a "market
discount bond". As a result, a portion of the gain on the sale
or redemption of the Note (see "United States Tax Considerations-
- -
United States Holders--Purchase, Sale and Redemption of Notes")
equal to the amount of market discount accrued with respect to
the Note while it was held by the United States Holder will be
treated as interest income. In addition, interest on
indebtedness incurred or continued to purchase or carry a Note
that is a market discount bond, to the extent that it exceeds in
any year the interest (including Original Issue Discount) on the
Note includible in the United States Holder's income for that
year, may not be fully deductible in that year. The foregoing
market discount rules will not apply if the United States Holder
elects to include in income in each taxable year the portion of
the market discount attributable to that year (accrued on either
a straight line or constant interest rate basis) with respect to
all market discount bonds acquired during or after the taxable
year in which such election is made. In the case of a Note
denominated in a foreign currency, the amount of market discount
will be determined in units of foreign currency in which the Note
is denominated. Unless the Holder elects to include in income in
each taxable year such market discount, the resultant market
discount is required to be translated at the spot rate on the
date of sale or redemption of the Note. No part of such market
discount is treated as currency gain or loss. If the Holder
elects to include in income in each taxable year such market
discount, the accrued market discoun currently includible in
income will be translated at the average spot rate for the
accrual period. Currency gain or loss with respect to accrued
market discount currently includible in income will be determined
in a manner similar to that for accrued Original Issue Discount
as discussed above.
If a United States Holder acquires a Note for an amount more
than the principal amount of the Note (or the stated redemption
price at maturity of a Note that is an Original Issue Discount),
a Holder may elect to amortize such bond premium on a yield to
maturity basis. In the case of a Note denominated in a foreign
currency, the amount of bond premium will be determined in
units of the foreign currency in which the Note is denominated.
If a Holder elects to amortize such bond premium, the amount of
accrued bond premium in units of foreign currency in each taxable
year will reduce interest income in units of foreign currency for
such taxable year. Currency gain or loss will be taken into
account with respect to accrued bond premium in each taxable
year by treating the portion of premium amortized with respect
to any period as a return of principal (see "United States Tax
Considerations--United States Holders--Purchase, Sale and
Redemption of Notes").
Proposed Treasury regulations have been issued that, if
finalized in their current form, would require a United States
Holder that purchases a Note at a premium under a constant yield
method. As proposed, the new rules will be applicable to debt
instruments issued on or after 60 days after the regulations are
published in final form. However, a holder may elect to apply
the new rules to all Notes held on or after the first day of the
taxable year that contains the day which is 60 days after the
new regulations are published in final form.
If a United States Holder acquires an Original Issue
Discount Note other than upon original issue for an amount more
than the Revised Issue Price of such Note on the date of
acquisition, but less than the redemption price of such Note,
such a Holder will be required to reduce each daily portion of
accrued Original Issue Discount by an allocable portion of such
acquisition premium. The allocable portion of such acquisition
premium will be equal to the daily portion of accrued Original
Issue Discount multiplied by a fraction (i) the numerator of
which is the excess of the cost of the Original Issue Discount
Note incurred by such Holder over the Revised Issue Price of such
Note on the date of acquisition and (ii) the denominator of which
is the excess of the stated redemption price of the Original
Issue Discount Note at maturity over the Revised Issue Price of
such Note on the date of acquisition. In the case of an Original
Issue Discount Note denominated in a foreign currency, the amount
of acquisition premium will be determined in units of foreign
currency in which the Note is denominated. The amount of the
allocable portion of acquisition premium in units of foreign
currency in each taxable year will reduce accrued Original Issue
Discount in units of foreign currency for such taxable year.
Currency gain or loss will be taken into account with respect to
accrued acquisition premium in each taxable year by treating the
portion of acquisition premium amortized with respect to any
period as a return of principal (see "United States Tax
Considerations--United States Holders--Purchase, Sale and
Redemption of Notes").
A Holder may elect to include in gross income its entire
return on a Note (i.e., the excess of all remaining payments to
be received on the Note over the amount paid for such Note by the
Holder) based on the compounding of interest at a constant rate.
This election for a Note with amortizable bond premium or market
discount results in a deemed election to apply the same accrual
principles to all of the Holder's debt instruments with
amortizable bond premium or market discount. This election may
be revoked only with the consent of the IRS.
Purchase, Sale and Redemption of Notes. A United States
Holder's tax basis in a Note will be its U.S. dollar cost. Such
Holder's original tax basis in a Note will be increased by (i)
the net amount of accrued Original Issue Discount included in
income and (ii) the amount of accrued market discount included in
income. Such Holder's tax basis in a Note will be decreased by
(i) the amount of accrued bond premium and (ii) payments other
than Stated Interest received by the Holder with respect to a
Note. Although the issue has not yet been directly addressed by
Treasury regulations, in the case of a Note denominated in a
foreign currency, such Holder's original tax basis likely will be
increased by (i) the net amount of accrued Original Issue
Discount income in units of foreign currency translated at the
appropriate accrual translation rate in effect during such
accrual period and (ii) the amount of accrued market discount
included in income in units of foreign currency translated at the
average spot rate in effect during such accrual period. Such
Holder's tax basis likely will be decreased by (i) payments
treated as receipts of accrued bond premium in units of foreign
currency translated at the spot rate on the date of acquisition;
(ii) payments treated as receipts of accrued Original Issue
Discount translated at the appropriate accrual translation rates,
or accrued market discount translated at the average spot rate,
for the relevant accrual period; and (iii) payments treated as
receipts of principal translated at the spot rate on the date of
acquisition. In accordance with current Treasury regulations,
payments in units of foreign currency received on a Note by such
a Holder will be treated first as a receipt of Stated Interest,
second as a receipt of Original Issue Discount to the extent
accrued, and finally as a receipt of principal.
Subject to the discussion below and the discussion of Notes
which are market discount bonds (see "United States Tax
Considerations--United States Holders--Payments of Interest and
Original Issue Discount"), upon the sale or redemption of a Note,
a United States Holder will recognize capital gain or loss equal
to the difference between the amount realized on the sale or
redemption of the Note and the tax basis of the Note. The amount
realized on a sale or redemption of a Note denominated in a
foreign currency will be equal to the sale proceeds or redemption
price in units of foreign currency translated at the spot rate on
the date of sale or redemption. Except to the extent described
in the next paragraph or described in "United States Tax
Considerations--United States Holders--Payments of Interest and
Original Issue Discount", gain or loss will be long-term capital
gain or loss if at the time of the sale or redemption the Note
has been held for more than one year.
Except to the extent described in the discussion of market
discount bonds (see "United States Tax Considerations--United
States Holders--Payments of Interest and Original Issue
Discount"), the portion of the gain or loss recognized by a
United States Holder on the sale or redemption of a Note that is
attributable to changes in exchange rates will be treated as
ordinary income or loss. If a United States Holder acquires a
Note denominated in a foreign currency on or after the date of
original issue, such Holder's currency gain or loss with respect
to principal will be calculated by multiplying the principal
amount in units of foreign currency by the change in spot rates
between the date such Holder acquired the Note and the date it
was sold or redeemed. For purposes of computing currency gain or
loss, the principal amount of a Note will be a Holder's purchase
price for the Note in units of foreign currency. The sum of any
currency gain or loss with respect to the principal of and
accrued but unpaid interest (including accrued but unpaid
Original Issue Discount, if any) on a Note will be realized only
to the extent of the total gain or loss realized on the sale or
redemption.
Exchange of Foreign Currency. Foreign currency received as
interest on a Note or on the sale or redemption of a Note will
have a tax basis equal to its U.S. dollar value (translated at
the spot rate) at the time such interest is received or at the
time of sale or redemption of the Note. Foreign currency
purchased will generally have a tax basis equal to the U.S.
dollar cost of acquisition. Any gain or loss recognized on a
sale or other disposition of the foreign currency (including its
use to purchase Notes or its exchange for U.S. dollars) will be
ordinary income or loss.
Foreign Holders
U.S. Withholding Tax. Under United States federal income
tax laws now in effect, and subject to the discussion of backup
withholding which follows, payments by SRAC or any paying agent
thereof (in its capacity as such) of principal of and interest
(including payments of Original Issue Discount, if any) on (and
premium, if any, on) a Note to a Holder who is not a United
States Person will not be subject to United States federal
withholding tax, provided in the case of interest (including
payments of Original Issue Discount, if any) that (i) such Holder
does not actually or constructively own 10 percent or more of the
total combined voting power of all classes of stock of SRAC
entitled to vote; (ii) such Holder is not a controlled foreign
corporation for United States tax purposes with respect to which
SRAC is a "related person" as defined in the Code; and (iii) (A)
the beneficial owner of the Note provides a signed written
statement to SRAC or its agent, under penalties of perjury, that
certifies that it is not a United States Person and provides its
name and address, (B) a securities clearing organization, bank or
other financial institution that holds customers' securities in
the ordinary course of its trade or business (a "Financial
Institution") and holds the Note on behalf of the beneficial
owner provides an intermediary certificate to SRAC or its agent
under penalties of perjury that such a statement has been
received from the beneficial owner by it or by a Financial
Institution between it and the beneficial owner and furnishes the
payor with a copy thereof, or (C) a securities clearing
organization that is the last intermediary in the chain before
SRAC or its agent (a "qualified clearing organization")
electronically provides an intermediary certificate to SRAC or
its agent under penalties of perjury that such a statement has
been received from the beneficial owner by it or by an
intermediary that is a member of the qualified clearing
organization and agrees to furnish (or to cause the relevant
member intermediary to furnish) promptly upon the request of SRAC
or the Internal Revenue Service such statement. A statement
described in this paragraph is effective only with respect to
interest payments made to the certifying Holder after the
issuance of the statement in the calendar year of its issuance
and the two immediately succeeding calendar years.
U.S. Income Tax. Except for the possible imposition of
United States withholding tax (see "United States Tax
Considerations--Foreign Holders--U.S. Withholding Tax") and
backup withholding tax (see "United States Tax Considerations--
Backup Withholding"), payments of principal of and interest
(including accrued Original Issue Discount, if any) on (and
premium, if any, on) a Note to a Holder who is not a United
States Person will not be subject to United States federal income
tax, and gains from the sale, redemption or other disposition of
a Note will not be subject to United States federal income tax,
provided that:
(a) The Holder (or the fiduciary, settlor, or beneficiary
of, or a person holding a power over, such Holder, if such Holder
is an estate or trust; or a partner of such Holder, if such
Holder is a partnership) shall not be or have been engaged in a
trade or business, or be or have been present in, or have or have
had a permanent establishment in the United States;
(b) There shall not have been a present or former
connection between such Holder (or between the fiduciary,
settlor, or beneficiary of, or a person holding a power over,
such Holder, if such Holder is an estate or trust; or a partner
of such Holder, if such Holder is a partnership) and the United
States, including, without limitation, such Holder's status as a
citizen or former citizen thereof or resident or former resident
thereof; and
(c) The Holder (or the fiduciary, settlor, or beneficiary
of, or a person holding a power over, such Holder, if such Holder
is an estate or trust; or a partner of such Holder, if such
Holder is a partnership) is not and has not been, for United
States tax purposes, (i) a personal holding company, (ii) a
corporation that accumulates earnings to avoid United States
federal income tax, or (iii) a person treated as making an
election the effect of which is to make payments of principal of
and interest (including accrued Original Issue Discount, if any)
on (and premium, if any, on) Notes subject to United States
federal income tax.
If a Holder who is not a United States Person is engaged in
a trade or business in the United States and interest (including
accrued Original Issue Discount, if any), gain or income in
respect of a Note of such Holder is effectively connected with
the conduct of such trade or business, the Holder, although
exempt from the withholding tax discussed in the preceding
paragraphs, may be subject to United States income tax on such
interest (including accrued Original Issue Discount, if any),
gain or income at the statutory rates provided for United States
Persons after deduction of deductible expenses allocable to such
effectively connected interest, gain or income. In addition, if
such a Holder is a foreign corporation, it may be subject to a
branch profits tax equal to 30% of its effectively connected
earnings and profits for the taxable year, as adjusted for
certain items, unless a lower rate applies under a United States
income tax treaty with the Holder's country of residence. For
this purpose, interest (including accrued Original Issue
Discount, if any), gain or income in respect of a Note will be
included in earnings and profits subject to the branch tax if the
interest (including accrued Original Issue Discount, if any),
gain or income is effectively connected with the conduct of the
United States trade or business of the Holder.
U.S. Estate Tax. A Note held by an individual who at the
time of death is not a citizen or resident of the United States
will generally not be subject to United States federal estate tax
if the individual does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock
of SRAC and interest (including accrued Original Issue Discount,
if any) on the Note is not effectively connected with a United
States trade or business of the individual.
Backup Withholding
A 31% "backup" withholding tax and information reporting
requirements apply to certain payments of principal of and
interest (including payments of Original Issue Discount, if any)
on (and premium, if any, on) an obligation, and to proceeds of
the sale of an obligation before maturity, to certain
noncorporate United States Holders, if such Holders fail to
provide correct taxpayer identification numbers and other
information or fail to comply with certain other requirements.
SRAC, its paying agent, or a broker, as the case may be, will be
required to withhold from any payment that is subject to backup
withholding, a tax equal to 31% of such payment unless the Holder
furnishes its taxpayer identification number in the manner
prescribed in applicable Treasury regulations and certain other
conditions are met.
In the case of payments of principal of and interest
(including payments of Original Issue Discount, if any) on (and
premium, if any, on) Notes by SRAC or paying agents of SRAC to
Holders who are not United States Persons, temporary Treasury
regulations provide that backup withholding and information
reporting will not apply if the Holder has provided the required
certification of its non-United States status under penalties of
perjury or has otherwise established an exemption (provided that
neither SRAC nor its paying agent has actual knowledge that the
Holder is a United States Person or the conditions of any other
exemption are not in fact satisfied). In addition, if payment is
collected by a foreign office of a custodian, nominee or other
agent acting on behalf of an owner of a Note, such custodian,
nominee or other agent will not be required to apply backup
withholding to its payments to such owner. However, in such case
if the custodian, nominee or other agent is a United States
Person, a controlled foreign corporation for United States
federal income tax purposes, or a foreign person 50% or more of
whose gross income is from a United States trade or business for
a specified three-year period, such custodian, nominee or other
agent will be subject to certain information reporting
requirements with respect to such payment unless such custodian,
nominee or other agent has evidence in its records that the
Holder is not a United States Person and no actual knowledge that
such evidence is false or the Holder otherwise establishes an
exemption or is an exempt recipient. An exempt recipient
includes a bank, corporation or Financial Institution.
Under current regulations, payments of the proceeds of the
sale of a Note by a Holder who is not a United States Person to
or through a foreign office of a broker will not be subject to
backup withholding. Payments by foreign offices of a broker that
is a United States Person, a controlled foreign corporation for
United States federal income tax purposes or a foreign person 50%
or more of whose gross income is from a United States trade or
business for a specified three-year period are currently subject
to certain information reporting requirements, unless the payee
is an exempt recipient or the broker has evidence in its records
that the payee is not a United States Person and no actual
knowledge that such evidence is false. Payments of the proceeds
of a sale to or through the United States office of a broker will
be subject to information reporting and backup withholding unless
the payee certifies under penalty of perjury that he is not a
United States Person and provides his name and address or the
payee otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules from
a payment to a Holder will be allowed as a refund or a credit
against such Holder's United States federal income tax, provided
that the required information is furnished to the United States
Internal Revenue Service.
The foregoing is based on the Internal Revenue Code of 1986,
as amended, regulations, rulings, administrative pronouncements
and judicial decisions as of the date hereof. Subsequent
developments in these areas could have a material effect on this
opinion.
We hereby confirm that, as of the date hereof, the
statements as to United States law in the Prospectus Supplement
contained under the caption "United States Tax Considerations"
are correct. We hereby consent to the use of our opinion as set
forth in the Prospectus Supplement and the reference to our firm
in said Supplement.
The Chase Manhattan Bank, N.A., as Trustee, may rely on this
opinion as if it were addressed to them.
Very truly yours,
/s/ Baker & McKenzie
BAKER & MCKENZIE
RHD/LGH/JOD/PAD
Exhibit 99.1
BOOK-ENTRY-ONLY MEDIUM-TERM NOTE, DEPOSIT NOTE, OR
MEDIUM-TERM BANK NOTE
(MASTER NOTE AND/OR GLOBAL CERTIFICATES) PROGRAM
Letter of Representations
[To be Completed by Issuer, Issuing Agent, and Paying Agent]
SEARS ROEBUCK ACCEPTANCE CORP.
[Name of Issuer]
THE CHASE MANHATTAN BANK 2823
[Name and DTC Participant Number of Issuing Agent]
THE CHASE MANHATTAN BANK 2823
[Name and DTC Participant Number of Paying Agent]
June 13, 1997
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: SEARS ROEBUCK ACCEPTANCE CORP.
MEDIUM-TERM NOTES SERIES IV
[Description of Note Program, including, as
applicable, (i) series designator; (ii) rank
of indebtedness; and (iii) reference to the
provision of the Securities Act of 1933, as
amended, pursuant to which Note Program is
exempt from registration]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to
certain matters relating to the issuance by Issuer from time to
time of notes under its note program described above (the
"Securities"). Issuing Agent will act as issuing agent with
respect to the Securities. Paying Agent will act as paying agent
with respect to the Securities. The Securities will be issued
pursuant to a prospectus supplement, private placement
memorandum, or other such document authorizing the issuance of
the Securities, dated as of June 13, 1997.
Paying Agent has entered into a Money Market Instrument
Master Note and/or Global Certificates Certificate Agreement, or
a Medium-Term Note Certificate Agreement, with The Depository
Trust Company ("DTC") dated as of March 10, 1989, pursuant to
which Paying Agent will act as custodian of a Master Note
Certificate and/or Global Certificates evidencing the Securities,
when issued. Paying Agent will amend Exhibit A to such
Certificate Agreement to include the note program described
above, prior to issuance of the Securities.
To induce DTC to accept the Securities as eligible for
deposit at DTC and to act in accordance with its Rules with
respect to the Securities, Issuer, Issuing Agent, and Paying
Agent make the following representations to DTC:
1. All or certain issues of the Securities shall be
evidenced by one Master Note Certificate, or by one or more
Global Certificates for each issue, in registered form registered
in the name of DTC's nominee, Cede & Co., and such Certificate or
Certificates shall represent 100% of the principal amount of the
Securities issued through DTC. The Master Note Certificate, if
any, shall include the substance of all material provisions set
forth in the appropriate DTC model Master Note for the note
program described above, a copy of which previously has been
furnished to Issuing Agent and Paying Agent, and may include
additional provisions as long as they do not conflict with the
material provisions set forth in the DTC model. If the principal
amount of an issue of the Securities to be evidenced by one or
more Global Certificates, if any, exceeds $200,000,000, one
Global Certificate shall be issued with respect to each
$200,000,000 of principal amount and an additional Global
Certificate shall be issued with respect to any remaining
principal amount. Paying Agent shall cause each Global
Certificate to be stamped with the following legend:
Unless this certificate is presented by an
authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to Issuer
or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered
in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
2. Issuer or Issuing Agent has obtained from the CUSIP
Service Bureau a written list of approximately 900 nine-character
numbers (the basic first six characters of which are the same and
uniquely identify Issuer and the Securities to be issued under
its note program described above). The CUSIP numbers on such
list have been reserved for future assignment to issues of the
Securities. At any time when fewer than 100 of the CUSIP numbers
on such list remain unassigned, Issuer or Issuing Agent shall
promptly obtain from the CUSIP Service Bureau an additional
written list of approximately 900 such numbers.
3. When Securities are to be issued through DTC, Issuing
Agent shall give notice to Paying Agent and issuance instructions
to DTC in accordance with DTC's Procedures, including DTC's Final
Plan for DTC Money Market Programs, and DTC's Issuing/Paying
Agent General Operating Procedures and Participant Terminal
System Procedures for Medium-Term Notes (MTNs) Including Deposit
Notes and Medium-Term Bank Notes (the "Procedures"), a copy of
which previously has been furnished to Issuing Agent and Paying
Agent. The giving of such issuance instructions, which include
delivery instructions, to DTC shall constitute: (a) a
representation that the Securities are issued in accordance with
applicable law; and (b) a confirmation that a Master Note
Certificate, or a Global Certificate (or Certificates),
evidencing such Securities, in the form described in Paragraph 1,
has been issued and authenticated.
4. Issuer recognizes that DTC does not in any way undertake
to, and shall not have any responsibility to, monitor or
ascertain the compliance of any transactions in the Securities
with any exemptions from registration under the Securities Act of
1933 or of any other state or federal securities laws.
5. If issuance of Securities through DTC is scheduled to
take place one or more days after Issuing Agent has given
issuance instructions to DTC, Issuing Agent may cancel such
issuance by giving a cancellation instruction to DTC in
accordance with the Procedures.
6. At any time that Paying Agent has Securities in its DTC
accounts, it may request withdrawal of such Securities from DTC
by giving a withdrawal instruction to DTC in accordance with the
Procedures. Upon DTC's acceptance of such withdrawal
instruction, Paying Agent shall reduce the principal amount of
the Securities evidenced, as the case may be, by the Master Note
Certificate, or by one or more Global Certificates, accordingly.
7. In the event of any solicitation of consents from or
voting by holders of the Securities, Issuer, Issuing Agent, or
Paying Agent shall establish a record date for such purposes
(with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send
notice of such record date to DTC not less than 15 calendar days
in advance of such record date. If delivered by hand or sent by
mail or overnight delivery, such notice shall be sent to:
Supervisor; Proxy
Reorganization Department
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
If sent by telecopy, such notice shall be sent to (212) 709-6896
or (212) 709-6897. Issuer, Issuing Agent, or Paying Agent shall
confirm DTC's receipt of such telecopy by telephoning (212) 709-
6870.
8. Notices of reorganization events (corporate actions)
with respect to the Securities, including full or partial
redemptions (calls), repayments (puts), extensions of maturities,
resets of interest rates or spreads, mandatory tenders, and
consolidations of individual issues, shall be given to DTC by
Paying Agent in accordance with the Procedures.
9. Paying Agent may override DTC's determination of
interest and principal payment dates, in accordance with the
Procedures.
10. Notice regarding the amount of variable interest and
principal payments on the Securities shall be given to DTC by
Paying Agent in accordance with the Procedures.
11. All notices sent to DTC shall contain the CUSIP number
of the Securities.
12. Paying Agent shall confirm with DTC daily by CUSIP
number the face value of the Securities outstanding, and Paying
Agent's corresponding interest and principal payment obligations,
in accordance with the Procedures.
13. DTC may direct Issuer, Issuing Agent, or Paying Agent
to use any other number or address as the number or address to
which notices may be sent.
14. Payments on the Securities, including payments in
currencies other than the U.S. Dollar, shall be made by Paying
Agent in accordance with the Procedures.
15. In the event that Issuer determines that beneficial
owners of Securities shall be able to obtain certificated
Securities, Issuer or Paying Agent shall notify DTC of the
availability of certificates. In such event, Issuer or Paying
Agent shall issue, transfer, and exchange certificates in
appropriate amounts, as required by DTC and others.
16. DTC may discontinue providing its services as
securities depository with respect to the Securities at any time
by giving reasonable notice to Issuer or Paying Agent (at which
time DTC will confirm with Issuer or Paying Agent the aggregate
amount of Securities outstanding by CUSIP number). Under such
circumstances, at DTC's request Issuer and Paying Agent shall
cooperate fully with DTC by taking appropriate action to make
available one or more separate certificates evidencing Securities
to any DTC Participant having Securities credited to its DTC
accounts.
17. Issuer: (a) understands that DTC has no obligation to,
and will not, communicate to its Participants or to any person
having an interest in the Securities any information contained in
the Master Note Certificate, if any, or the Global Certificates,
if any; and (b) acknowledges that neither DTC's Participants nor
any person having an interest in the Securities shall be deemed
to have notice of the provisions of such Certificate or
Certificates by virtue of submission of such Certificate or
Certificates to DTC.
18. Issuer authorizes DTC to provide to Issuing Agent or
Paying Agent listings of DTC Participants' holdings with respect
to the Securities from time to time at the request of Issuing
Agent or Paying Agent. Issuer authorizes Issuing Agent and
Paying Agent to provide DTC with such signatures, exemplars of
signatures, and authorizations to act as may be deemed necessary
by DTC to permit DTC to discharge its obligations to DTC
Participants and appropriate regulatory authorities.
19. Nothing herein shall be deemed to require Issuing Agent
or Paying Agent to advance funds on behalf of Issuer.
Note: Very truly yours,
Schedule A contains
statements that DTC SEARS ROEBUCK ACCEPTANCE CORP.
believes accurately (Issuer)
describe DTC, the By: /s/ George F. Slook
method of effecting book- (Authorized Officer's
entry transfers of securities Signature)
distributed through DTC,
and certain related THE CHASE MANHATTAN BANK
matters. (Issuing Agent)
By: /s/ Tim Burke
(Authorized Officer's
Signature)
THE CHASE MANHATTAN BANK
(Paying Agent)
By: /s/ Tim Burke
(Authorized Officer's
Signature)
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /s/ Robyn Brandow
<PAGE>
SCHEDULE A
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material may be applicable only to
certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will
act as securities depository for the securities (the
"Securities"). The Securities will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Security certificate
will be issued for [each issue of] the Securities, [each] in the
aggregate principal amount of such issue, and will be deposited
with DTC. [If, however, the aggregate principal amount of [any]
issue exceeds $200 million, one certificate will be issued with
respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any
remaining principal amount of such issue.]
2. DTC is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the
DTC system is also available to others such as securities brokers
and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The
Rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be
made by or through Direct Participants, which will receive a
credit for the Securities on DTC's records. The ownership
interest of each actual purchaser of each Security ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchase, but Beneficial
Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of
their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Securities are to be
accomplished by entries made on the books of Participants acting
on behalf on Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interest in
Securities, except in the event that use of the book-entry system
for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities
deposited by Participants with DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of Securities
with DTC and their registration in the name of Cede & Co. effect
no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Securities; DTC's records reflect
only the identity of the Direct Participants to whose accounts
such Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less
than all of the Securities within an issue are being redeemed,
DTC's practice is to determine by lot the amount of the interest
of each Direct Participant in such issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with
respect to Securities. Under its usual procedures, DTC mails an
Omnibus Proxy to the Issuer as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will
be made to DTC. DTC's practice is to credit Direct Participants'
accounts on payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of
such Participant and not of DTC, the Agent, or the Issuer,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to
DTC is the responsibility of the Issuer or the Agent,
disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have
its Securities purchased or tendered, through its Participant, to
the [Tender/Remarketing] Agent, and shall effect delivery of such
Securities by causing the Direct Participant to transfer the
Participant's interest in the Securities, on DTC's records, to
the [Tender/Remarketing] Agent. The requirement for physical
delivery of Securities in connection with a demand for purchase
or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct
Participants on DTC's records.]
10. DTC may discontinue providing its services as
securities depository with respect to the Securities at any time
by giving reasonable notice to the Issuer or the Agent. Under
such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to
be printed and delivered.
11. The Issuer may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor securities
depository). In that event, Security certificates will be
printed and delivered.
12. The information in the section concerning DTC and DTC's
book-entry system has been obtained from sources that the Issuer
believes to be reliable, but the Issuer takes no responsibility
for the accuracy thereof.
Exhibit 99.2
BOOK-ENTRY-ONLY CORPORATE DEBT ISSUES
Letter of Representations*
[To be Completed by Issuer and Agent]
SEARS ROEBUCK ACCEPTANCE CORP.
[Name of Issuer]
THE CHASE MANHATTAN BANK 2823
[Name of Agent]
July 1, 1997
(Date)
Attention: General Counsel's Office
The Depository Trust Company
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: SEARS ROEBUCK ACCEPTANCE CORP.
7% NOTES DUE JUNE 15, 2007
[Issue Description]
Ladies and Gentlemen:
This letter sets forth our understanding with respect to
certain matters relating to the above-referenced issue (the
"Securities"). Agent will act as trustee, paying agent, fiscal
agent, or other agent of Issuer with respect to the Securities.
The Securities will be issued pursuant to a trust indenture,
resolution or other such document authorizing the issuance of the
Securities, dated as of May 15, 1995 (the "Document"). See
below** is distributing the Securities through The Depository
Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for
deposit at DTC, and to act in accordance with its Rules with
respect to the Securities, Issuer and Agent make the following
representations to DTC:
1. Prior to closing on the Securities on July 1, 1997,
there shall be deposited with DTC one Security certificate
registered in the name of DTC's nominee, Cede & Co., for each
stated maturity of the Securities in the face amounts set forth
on Schedule A hereto, the total of
* This Letter of Representations includes the Addendum attached
hereto, which modifies & supersedes this Letter of
Representations to the extent set forth therein.
** List of Underwriters to come.
<PAGE>
which represents 100% of the principal amount of such securities.
If, however, the aggregate principal amount of any maturity
exceeds $200 million, one certificate will be issued with respect
to each $200 million of principal amount and an additional
certificate will be issued with respect to any remaining
principal amount. Each Security certificate shall bear the
following legend:
Unless this certificate is presented by an
authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to Issuer
or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered
in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
2. Issuer: (a) understands that DTC has no obligation to,
and will not, communicate to its Participants or to any person
having an interest in the Securities any information contained
in the Security certificate(s); and (b) acknowledges that neither
DTC's Participants nor any person having an interest in the
Securities shall be deemed to have notice of the provisions of
the Security certificate(s) by virtue of submission of such
certificate(s) to DTC.
3. In the event of any solicitation of consents from or
voting by holders of the Securities, Issuer or Agent shall
establish a record date for such purposes (with no provision for
revocation of consents or votes by subsequent holders) and shall
send notice of such record date to DTC not less than 15 calendar
days in advance of such record date. Notices to DTC pursuant to
this paragraph by telecopy shall be sent to DTC's Reorganization
Department at (212) 709-6896 or (212) 709-6897, and receipt of
such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this paragraph by mail or by any other
means shall be sent to DTC's Reorganization Department as
indicated in Paragraph 5.
4. In the event of a full or partial redemption, Issuer or
Agent shall send a notice to DTC specifying: (a) the amount of
the redemption or refunding; (b) in the case of a refunding, the
maturity date(s) established under the refunding; and (c) the
date such notice is to be mailed to Security holders or published
(the "Publication Date"). Such notice shall be sent to DTC by a
secure means (e.g., legible telecopy, registered or certified
mail, overnight delivery) in a timely manner designed to assure
that such notice is in DTC's possession no later than the close
of business on the business day before or, if possible, two
business days before the Publication Date. Issuer or Agent shall
forward such notice either in a separate secure transmission for
each CUSIP number or in a secure transmission for multiple CUSIP
numbers (if applicable) which includes a manifest or list of each
CUSIP number submitted in that transmission. (The party sending
such notice shall have a method to verify subsequently the use of
such means and the timeliness of such notice.) The Publication
Date shall be not less than 30 days nor more than 60 days prior
to the redemption date or, in the case of an advance refunding,
the date that the proceeds are deposited in escrow. Notices to
DTC pursuant to this Paragraph by telecopy shall be sent to DTC's
Call Notification Department at (516) 227-4039 or (516) 227-4190.
If the party sending the notice does not receive a telecopy
receipt form DTC confirming that the notice has been received,
such party shall telephone (516) 227-4070. Notices to DTC
pursuant to this Paragraph by mail or by any other means shall be
sent :
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
5. In the event of an invitation to tender the Securities
(including mandatory tenders, exchanges, and capital changes),
notice by Issuer or Agent to Security holders specifying the
terms of the tender and the Publication Date of such notice shall
be sent to DTC by a secure means in the manner wet forth in the
preceding Paragraph. Notices to DTC pursuant to this Paragraph
and notices of other corporate actions by telecopy shall be sent
to DTC's Reorganization Department at (212) 709-1093 or (212)
709-1094, and receipt of such notices shall be confirmed by
telephoning (212) 709-6884. Notices to DTC pursuant to the above
by mail or by any other means shall be sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
6. All notices and payment advices sent to DTC shall
contain the CUSIP number of the Securities.
7. In the event of a change in the interest rate, agent
shall send notice of such change to Standard & Poor's
Corporation. Such notice, which shall also include Agent
contact's name and telephone number, shall also be sent to DTC's
Dividend Department either by telecopy to (212) 709-1723, or if
by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
8. Issuer or Agent shall provide a written notice of
interest payment information to a standard interest announcement
service subscribed to by DTC as soon as the information is
available. In the unlikely event that no such service exists,
Issuer or Agent shall provide such notice directly to DTC
electronically, as previously arranged by Issuer or Agent and
DTC, as soon as the information is available. If electronic
transmission has not been arranged, absent any other arrangements
between Issuer or Agent and DTC, such information should be sent
by telecopy to DTC's Dividend Department at (212) 709-1723 or
(212) 709-1686, and receipt of such notices shall be confirmed by
telephoning (212) 709-1270. Notices to DTC pursuant to the above
by mail or by any other means shall be sent to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
9. Issuer or Agent shall provide CUSIP numbers for each
issue for which payment is being sent, as well as the dollar and
cent amount of the payment for each issue to DTC, no later than
noon (Eastern Time) on the payment date.
10. Interest payments and principal payments that are part
of periodic principal-and-interest payments shall be received by
Cede & Co., as nominee of DTC, or its registered assigns, in
same-day funds no later than 2:30 p.m. (Eastern Time) on each
payment date. Absent any other arrangements between Issuer or
Agent and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account # 066-026776
11. Maturity and redemption payments allocated with respect
to each CUSIP number shall be received by Cede & Co., as nominee
of DTC, or its registered assigns, in same-day funds no later
than 2:30 p.m. (Eastern Time) on the payment date. Absent any
other arrangements between Issuer or Agent and DTC, such funds
shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Redemption Deposit Account # 066-027306
12. Principal payments (plus accrued interest, if any) as a
result of optional tenders for purchase effected by means of
DTC's Repayment Option Procedures shall be received by Cede &
Co., as nominee of DTC, or its registered assigns, in same-day
funds no later than 2:30 p.m. (Eastern Time) on the first payment
date. Absent any other arrangements between Issuer or Agent and
DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Reorganization Deposit Account # 066-027608
13. DTC may direct Issuer or Agent to use any other number
or address as the number or address to which notices or payments
of interest or principal may be sent.
14. In the event of a redemption, acceleration, or any
other similar transaction (e.g., tender made and accepted in
response to Issuer's or Agent's invitation) necessitating a
reduction in the aggregate principal amount of Securities
outstanding or an advance refunding of part of the Securities
outstanding, DTC, in its discretion: (a) may request Issuer or
Agent to issue and authenticate a new Security certificate; or
(b) may make an appropriate notation on the Security certificate
indicating the date and amount of such reduction in principal
except in the case of final maturity, in which case the
certificate will be presented to Issuer or Agent prior to
payment, if required.
15. In the event that Issuer determines that beneficial
owners of Securities shall be able to obtain certificated
Securities, Issuer or Agent shall notify DTC of the availability
of certificates. In such event, Issuer or Agent shall issue,
transfer and exchange certificates in appropriate amounts, as
required by DTC and others.
16. DTC may discontinue providing its services as
securities depository with respect to the Securities at any time
by giving reasonable notice to Issuer or Agent (at which
time DTC will confirm with Issuer or Agent the aggregate
amount of Securities outstanding) by CUSIP number. Under such
circumstances, at DTC's request Issuer and Agent shall
cooperate fully with DTC by taking appropriate action to make
available one or more separate certificates evidencing Securities
to any DTC Participant having Securities credited to its DTC
accounts.
17. Nothing herein shall be deemed to require Agent to
advance funds on behalf of Issuer.
18. This Letter of Representations may be executed in any
number of counterparts, each of which when so executed shall be
deemed to be an original, but all such counterparts together
shall constitute but one and the same instrument.
19. This Letter of Representations is governed by, and
shall construed in accordance with, the laws of the State of New
York without giving effect to principles of conflicts of law.
20. The following riders, attached hereto, are hereby
incorporated into this Letter of Representations:
_________________________________________________________________
_________________________________________________________________
Notes: Very truly yours,
A. If there is an Agent
(as defined in this SEARS ROEBUCK ACCEPTANCE CORP.
Letter of Representations), (Issuer)
Agent, as well as Issuer, By: /s/ George F. Slook
must sign this Letter. If (Authorized Officer's
there is no Agent for signing Signature)
this Letter Issuer itself
undertakes to perform all THE CHASE MANHATTAN BANK, N.A.
of the obligations set forth (Agent)
herein. By: /s/ Tim Burke
B. Schedule B contains (Authorized Officer's
statements that DTC, Signature)
believes accurately
describe, DTC, the method
of effecting book-entry
transfers of securities
distributed through DTC,
and certain related matters.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: /s/ Richard B. Nesson
cc: Underwriter
Underwriter's Counsel
<PAGE>
ADDENDUM
to
Letter of Representations dated July 1, 1997
Sears Roebuck Acceptance Corp.
Paragraph 1: The following is hereby added after the third
sentence of Paragraph 1:
"Each certificate shall remain in the Agent's Custody
subject to the provisions of the Fast Balance Certificate
Agreement currently in effect between the Agent and DTC."
Paragraph 4: The following sentence is added at the end
Paragraph 4:
"Failure to provide timely notice shall not be a breach
under this Letter if Issuer shall become obligated less than 10
days prior to such redemption date under the Document to redeem
the Securities."
Paragraph 6: The following sentences are added at the end of
Paragraph 6:
"Issuer of Agent will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers (if applicable) which
includes a manifest or list of each CUSIP submitted in that
transmission."
Paragraph 13: The following is hereby inserted after the word
"Agent in line 1 Paragraph 13:
", and if requested, shall confirm such direction in
writing,"
<PAGE>
SCHEDULE A
SEARS ROEBUCK ACCEPTANCE CORP.
7% NOTES DUE JUNE 15, 2007
(Describe Issue)
CUSIP NUMBER PRINCIPAL AMOUNT MATURITY DATE INTEREST
RATE
812404AV3 $500,000,000 June 15, 2007 7%<PAGE>
SCHEDULE B
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(Prepared by DTC--bracketed material may be applicable only to
certain issues)
1. The Depository Trust Company ("DTC"), New York, NY, will
act as securities depository for the securities (the
"Securities"). The Securities will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's
partnership nominee). One fully-registered Security certificate
will be issued for [each issue of] the Securities, [each] in the
aggregate principal amount of such issue, and will be deposited
with DTC. [If, however, the aggregate principal amount of [any]
issue exceeds $200 million, one certificate will be issued with
respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any
remaining principal amount of such issue.]
2. DTC is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the
DTC system is also available to others such as securities brokers
and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants"). The
Rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be
made by or through Direct Participants, which will receive a
credit for the Securities on DTC's records. The ownership
interest of each actual purchaser of each Security ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchase, but Beneficial
Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of
their holdings, from the Direct or Indirect Participant through
which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Securities are to be
accomplished by entries made on the books of Participants acting
on behalf on Beneficial Owners. Beneficial Owners will not
receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system
for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities
deposited by Participants with DTC are registered in the name of
DTC's partnership nominee, Cede & Co. The deposit of Securities
with DTC and their registration in the name of Cede & Co. effect
no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Securities; DTC's records reflect
only the identity of the Direct Participants to whose accounts
such Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
[6. Redemption notices shall be sent to DTC. If less than
all of the Securities within an issue are being redeemed,
DTC's practice is to determine by lot the amount of the interest
of each Direct Participant in such issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with
respect to Securities. Under its usual procedures, DTC mails an
Omnibus Proxy to Issuer as soon as possible after the record
date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts the
Securities are credited on the record date (identified in a
listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will
be made to Cede & Co. as nominee of DTC, DTC's practice is to
credit Direct Participants' accounts,upon DTC's receipt of funds
and corresponding detail information from Issuer or Agent, on
payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe
that it will not receive payment on payable date. Payments by
Participants to Beneficial Owners will be governed by standing
instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of
such Participant and not of DTC, Agent, or Issuer,
subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to
Cede & Co. is the responsibility of Issuer or Agent, disbursement
of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have
its Securities purchased or tendered, through its Participant, to
[Tender/Remarketing] Agent, and shall effect delivery of such
Securities by causing the Direct Participant to transfer the
Participant's interest in the Securities, on DTC's records, to
[Tender/Remarketing] Agent. The requirement for physical
delivery of Securities in connection with a demand for purchase
or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct
Participants on DTC's records.]
10. DTC may discontinue providing its services as
securities depository with respect to the Securities at any time
by giving reasonable notice to the Issuer or the Agent. Under
such circumstances, in the event that a successor securities
depository is not obtained, Security certificates are required to
be printed and delivered.
11. Issuer may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities
depository). In that event, Security certificates will be
printed and delivered.
12. The information in the section concerning DTC and DTC's
book-entry system has been obtained from sources that Issuer
believes to be reliable, but Issuer takes no responsibility
for the accuracy thereof.
