UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 27, 2003
OR
-- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-4040
SEARS ROEBUCK ACCEPTANCE CORP.
(Exact name of registrant as specified in its charter)
Delaware 51-0080535 (State of Incorporation) (I.R.S. Employer Identification No.) |
3711 Kennett Pike, Greenville, Delaware 19807
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 302/434-3100
Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and has been subject to such filing requirements for the past 90 days. Yes X No__
Indicate by check mark whether Registrant is an accelerated filer (as defined in Exchange Act (Rule 12b-2). Yes [ ] No [ X ]
As of October 25, 2003 the Registrant had 350,000 shares of capital stock outstanding, all of which were held by Sears, Roebuck and Co.
Registrant meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with a reduced disclosure format.
SEARS ROEBUCK ACCEPTANCE CORP.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
13 WEEKS AND 39 WEEKS ENDED SEPTEMBER 27, 2003
PART I. FINANCIAL INFORMATION: PAGE NO.
Item 1. Financial Statements
Statements of Financial Position
September 27, 2003 (unaudited) and September 28, 2002 (unaudited)
and December 28, 2002 1
Statements of Income and Comprehensive Income (unaudited) 13 Weeks and 39 Weeks ended September 27, 2003 and September 28, 2002 2
Statements of Cash Flows (unaudited) 39 Weeks ended September 27, 2003 and September 28, 2002 3
Notes to Financial Statements (unaudited) 4-6
Independent Accountants' Report 7
Item 2. Management's Discussion and Analysis of Operations 8
Item 4. Controls and Procedures 8
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings 9
Item 6. Exhibits and Reports on Form 8-K 9
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SEARS ROEBUCK ACCEPTANCE CORP.
STATEMENTS OF FINANCIAL POSITION
(unaudited)
-----------------
(millions, except share data) Sept.27, Sept.28, Dec. 28,
2003 2002 2002
Assets ------- ------ --------
Cash and cash equivalents $ 1,126 $ 377 $ 1,563
Notes of Sears 17,227 17,883 15,352
Other assets 149 142 139
------- -------- --------
Total assets $ 18,502 $ 18,402 $ 17,054
======== ======== ========
Liabilities
Commercial paper (net of
unamortized discount of
$3, $6 and $5) $ 3,312 $ 4,008 $ 2,869
Medium-term notes (net of
unamortized discount of
$3, $5 and $5) 4,248 2,336 2,118
Discrete underwritten debt (net
of unamortized discount of
$55, $59 and $58) 7,295 8,541 8,542
Accrued interest and
other liabilities 179 184 160
------- ------- --------
Total liabilities 15,034 15,069 13,689
------- ------- --------
|
Commitments and contingent liabilities
Shareholder's Equity
Common share, par value $100 per share;
500,000 shares authorized;
350,000 shares issued and
outstanding 35 35 35
Capital in excess of par value 1,150 1,150 1,150
Accumulated other
comprehensive loss (3) (3) (3)
Retained income 2,286 2,151 2,183
------- ------- --------
Total shareholder's equity 3,468 3,333 3,365
------- ------- --------
Total liabilities and
shareholder's equity $ 18,502 $ 18,402 $ 17,054
======== ======== ========
|
See notes to financial statements.
SEARS ROEBUCK ACCEPTANCE CORP.
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(unaudited)
(millions, except ratios) 13 Weeks Ended 39 Weeks Ended
Sept.27, Sept.28, Sept.27, Sept.28,
2003 2002 2003 2002
------ ------ ------ -------
Revenues
Earnings on notes of Sears $ 257 $ 255 $ 756 $ 729
Earnings on cash equivalents 5 2 21 10
----- ----- ---- ----
Total revenues 262 257 777 739
----- ----- ---- ----
Expenses
Interest expense and amortization
of debt discount/premium 201 205 611 588
Loss on debt extinguishment 7 - 7 -
Operating expenses - - 1 1
----- ----- ---- ----
Total expenses 208 205 619 589
----- ----- ---- ----
Income before income taxes 54 52 158 150
Income taxes 19 18 55 52
----- ----- ---- ----
Net income $ 35 $ 34 $ 103 $ 98
----- ----- ----- -----
Total other comprehensive income(loss)
Losses on cash flow hedge,
net of tax - - - (3)
----- ----- ---- ----
Total comprehensive income $ 35 $ 34 $ 103 $ 95
===== ===== ===== =====
Ratios of earnings
to fixed charges 1.26 1.25 1.26 1.26
|
See notes to financial statements.
SEARS ROEBUCK ACCEPTANCE CORP.
STATEMENTS OF CASH FLOWS
(unaudited)
(millions) 39 Weeks Ended
Sept.27, Sept.28,
2003 2002
-------- -------
Cash flows from operating activities:
Net income $ 103 $ 98
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, amortization and other
noncash items 16 10
Loss on debt extinguishment 7 -
Increase in other assets (8) (2)
Increase(decrease)in other liabilities 19 (8)
----- -----
Net cash provided by operating activities 138 98
----- -----
Cash flows from investing activities:
Increase in notes of Sears (1,875) (1,869)
----- -----
Net cash used in
investing activities (1,875) (1,869)
----- -----
Cash flows from financing activities:
Increase in commercial paper,
primarily 90 days or less 443 783
Proceeds from issuance of long-term debt 3,195 1,832
Payments for redemption of long-term debt (2,316) (1,042)
Issue costs paid to issue debt (21) (24)
----- -----
Net cash provided by
financing activities 1,301 1,549
----- -----
Net decrease in cash and
cash equivalents (437) (222)
Cash and cash equivalents at beginning
of period 1,563 599
----- -----
Cash and cash equivalents at end of period $ 1,126 $ 377
====== ======
|
See notes to financial statements.
SEARS ROEBUCK ACCEPTANCE CORP.
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Significant Accounting Policies
The unaudited interim financial statements of Sears Roebuck Acceptance Corp. ("SRAC"), a wholly-owned subsidiary of Sears, Roebuck and Co. ("Sears"), reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. The significant accounting policies used in the presentation of these financial statements are consistent with the summary of significant accounting policies set forth in SRAC's Annual Report on Form 10-K for the 52 weeks ended December 28, 2002, and these financial statements should be read in conjunction with the financial statements and notes found therein. The results of operations for the interim periods should not be considered indicative of the results to be expected for the full year.
2. Back-up Liquidity
SRAC continued to provide support for 100% of its outstanding commercial paper through its investment portfolio and committed credit facilities. SRAC's investment portfolio,which consists of cash and cash equivalents, fluctuated from a low of $1.1 billion to a high of $2.4 billion in the third quarter of 2003. On September 27, 2003, SRAC's committed credit facilities consisted of a $3.5 billion unsecured 364-day revolving credit facility expiring February 23, 2004 which includes an option to extend the repayment of borrowings, if any, through February 2005. Effective November 3, 2003, SRAC amended the facility extending the termination date to May 2004 for consenting lenders and modifying the option to extend the repayment of any borrowings to November 2004. The amendment also provides for the commitment amount under this facility to be reduced to $2.5 billion 30 days following the sale of Sears' Credit and Financial Products business.
As of September 27, 2003, there have been no outstanding borrowings related to this credit facility.
3. Legal Proceedings
On June 16, 2003, a lawsuit was filed in the United States District Court for the Northern District of Illinois against Sears, certain of its officers, and SRAC, alleging that certain public announcements and SEC filings by Sears and SRAC concerning Sears credit card business violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and Section 11 of the Securities Act of 1933, and seeking damages. An amended complaint was filed on October 16, 2003, naming additional individuals and certain investment banks as defendants. The plaintiffs purport to represent a class of noteholders who purchased certain notes issued by SRAC between October 24, 2001 and October 17, 2002, whether by prospectus or otherwise. SRAC believes that these claims lack merit and is defending against them vigorously.
The consequences of this matter are not presently determinable but, in the opinion of management of SRAC after consulting with legal counsel and taking into account insurance, the ultimate liability is not expected to have a material effect on annual results of operations, financial position, liquidity or capital resources of SRAC.
4. Subsequent Events
On October 17, 2003, SRAC commenced cash tender offers to purchase any and all of its unsecured public term debt securities maturing after 2003, which includes 174 series of securities with an aggregate principal amount of approximately $10.7 billion. The offers are expected to expire on November 14, 2003, unless previously terminated or extended. If all of the $10.7 billion of debt is retired through the cash tender offers, the Company expects to realize a $695 million after-tax loss on the extinguishment of that debt in the fourth quarter of 2003. This loss will consist of the expected premium paid to retire the debt and the writeoff of unamortized debt issuance costs.
On November 3, 2003, Sears completed the sale of its domestic Credit and Financial Products business to Citicorp. The sale generated total proceeds of $32 billion, consisting of the assumption of $10 billion of securitized debt by Citicorp and cash proceeds received by Sears of $22 billion. Proceeds from Sears' sale of the Credit and Financial Products business are intended to be earmarked primarily to retire debt that supported the domestic credit card receivables, return cash to Sears shareholders; and for general corporate purposes. Sears may use acquired funds from the sale of its Credit business to redeem a portion of its Sears Note to fund the repayment of SRAC's tendered debt.
As a result of Sears' sale of its Credit and Financial Products business, on November 3, 2003, Sears executed guarantees pursuant to which it has agreed to guarantee (1) SRAC's debt securities issued or to be issued under the indenture dated as of May 15, 1995 between SRAC and JPMorgan Chase Bank, as trustee, and the indenture dated as of October 1, 2002 between SRAC and BNY Midwest Trust Company, as trustee; and (2) SRAC's commercial paper notes issued or to be issued under its commercial paper program.
5. Medium-term Notes and Discrete Underwritten Debt
Medium-term notes and discrete underwritten debt are issued with either a floating rate indexed to LIBOR or a fixed rate.
(dollars in millions; term in years)
ISSUANCE
2003 2002
--------------------- ---------------------
Avg. Avg.
Avg. Orig. Avg. Orig.
Volume Coupon Term Volume Coupon Term
--------------------- ---------------------
13 Weeks Ended:
Medium-term notes $ 135 1.89% 5.0 $ - -% -
Discrete debt $ - -% - $ - -% -
39 Weeks Ended:
Medium-term notes $2,945 4.51% 3.1 $ 15 4.50% 2.6
Discrete debt $ 250 7.40% 40.0 $1,850 7.03% 24.9
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GROSS OUTSTANDING
9/27/03 9/28/02
--------------------- ---------------------
Avg. Avg.
Avg. Remain. Avg. Remain.
Balance Coupon Term Balance Coupon Term
--------------------- ---------------------
Medium-term notes $4,251 4.80% 2.8 $2,341 5.88% 1.3
Discrete debt $7,350 6.81% 13.3 $8,600 6.97% 13.2
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MATURITIES
Medium-term Discrete
Year notes debt Total
---------------------------------------------------
2003 $ 429 $ 250* $ 679
2004 1,702 - 1,702
2005 204 250 454
2006 507 550 1,057
2007 104 - 104
Thereafter 1,305 6,300 7,605
---------------------------------------------------
Total $4,251 $7,350 $11,601
===================================================
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On September 1, 2003, SRAC redeemed the entire $250 million outstanding principal amount of its 7% notes due March 1, 2038, which resulted in a loss on debt extinguishment of $7 million. On October 23, 2003, SRAC also redeemed the entire $250 million outstanding principal amount of its 6.95% notes due October 23, 2038, which resulted in a loss on debt extinguishment of $7 million.
On October 17, 2003, SRAC commenced cash tender offers to purchase any and all of its unsecured public term debt securities maturing after 2003, which includes 174 series of securities with an aggregate principal amount of approximately $10.7 billion. The offers are expected to expire on November 14, 2003, unless previously terminated or extended.(see Note 4)
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholder of Sears Roebuck Acceptance Corp.:
We have reviewed the accompanying statements of financial position of Sears Roebuck Acceptance Corp. (a wholly-owned subsidiary of Sears, Roebuck and Co.) as of September 27, 2003 and September 28, 2002, and the related statements of income and comprehensive income for the 13 week and 39 week periods then ended and cash flows for the 39 week periods then ended. These interim financial statements are the responsibility of Sears Roebuck Acceptance Corp.'s management.
We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to such interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the statement of financial position of Sears Roebuck Acceptance Corp. as of December 28, 2002 and the related statements of income and comprehensive income, shareholder's equity and cash flows for the year then ended (not presented herein); and in our report dated February 14, 2003, except for Note 5, as to which the date is February 24, 2003, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying statement of financial position as of December 28, 2002 is fairly stated, in all material respects, in relation to the statement of financial position from which it has been derived.
/s/ Deloitte & Touche LLP ------------------------- Deloitte & Touche LLP Philadelphia, Pennsylvania November 4, 2003 |
SEARS ROEBUCK ACCEPTANCE CORP.
ITEM 2. ANALYSIS OF RESULTS OF OPERATIONS
During the third quarter of 2003, SRAC revenues increased to $262 million from $257 million in the comparable 2002 period. For the 39 week period ended September 27, 2003, SRAC's revenues increased to $777 million from $739 million for the comparable 2002 period. The increase in revenues resulted from increases in average earning asset levels of $300 million and $800 million in the 13 and 39 week periods of 2003 versus the 2002 periods.
SRAC's interest and related expenses, including losses associated with the early extinguishment of debt, increased 1% to $208 million from $205 million and 5% to $618 million from $588 million for the 13 and 39 week periods of 2003, respectively, as compared to the comparable 2002 periods. Interest and related expenses increased during the 13 and 39 week period of 2003 due to a loss on the early extinguishment of debt related to the writeoff of unamortized issue expense of $7 million and increases in average long-term debt levels. The loss on debt extinguishment related to a $250 million 7% note due March 1, 2038 and redeemed September 1, 2003. SRAC's average long-term debt increased to $11.9 billion and $11.6 billion in the 13 and 39 weeks of 2003, compared with $11.0 billion and $10.4 million for the same periods in 2002. Increases in interest and related expenses attributed to long-term debt levels were partially offset by reductions in average short-term debt levels and overall cost of funds. SRAC's short-term borrowings averaged $3.4 billion in the third quarter and $3.2 billion in the 39 week period of 2003, compared to $4.1 billion and $3.8 billion for the respective 2002 periods. SRAC's cost of short-term funds averaged 1.35% in the third quarter and 1.57% in the first nine months of 2003 compared to 2.13% and 2.27% for the same periods in 2002. SRAC's cost of long-term funds averaged 6.14% and 6.36% in the 13 and 39 weeks of 2003 compared to 6.53% and 6.54% for the comparable 2002 periods.
SRAC's net income of $35 million and $103 million for the 13 and 39 weeks of 2003, respectively, increased from the comparable 2002 period amounts of $34 million and $98 million.
SRAC's ratio of earnings to fixed charges for both the 13 and 39 weeks of 2003 was 1.26, compared to 1.25 and 1.26 for the comparable 2002 periods.
Item 4. CONTROLS AND PROCEDURES
The Company's management, including Keith E. Trost, President (principal executive officer) and George F. Slook, Vice President, Finance (principal financial officer), have evaluated the effectiveness of the Company's "disclosure controls and procedures,"as such term is defined in Rules 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act"). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, at the end of the period covered by this report, the Company's disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the "SEC") (1) is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (2) is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. In addition, based on that evaluation, no change in the Company's internal control over financial reporting occurred during the quarter ended September 27, 2003 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
SEARS ROEBUCK ACCEPTANCE CORP.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On June 16, 2003, a lawsuit was filed in the United States District Court for the Northern District of Illinois against Sears, Roebuck and Co. ("Sears"), certain of its officers, and SRAC, alleging that certain public announcements and SEC filings by Sears and SRAC concerning Sears credit card business violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and Section 11 of the Securities Act of 1933, and seeking damages. An amended complaint was filed on October 16, 2003, naming additional individuals and certain investment banks as defendants. The plaintiffs purport to represent a class of noteholders who purchased certain notes issued by SRAC between October 24, 2001 and October 17, 2002, whether by prospectus or otherwise. SRAC believes that these claims lack merit and is defending against them vigorously.
The consequences of this matter are not presently determinable but, in the opinion of management of SRAC after consulting with legal counsel and taking into account insurance, the ultimate liability is not expected to have a material effect on annual results of operations, financial position, liquidity or capital resources of SRAC.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits listed in the "Exhibit Index" are filed as part of this report.
(b) Reports on Form 8-K:
There were no current reports on Form 8-K filed by SRAC during the quarter for which this report is filed.
SEARS ROEBUCK ACCEPTANCE CORP.
SIGNATURE
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.
(Registrant)
By: /s/ George F. Slook
------------------------
George F. Slook
Vice President, Finance
and Assistant Secretary
(principal financial
officer and authorized
officer of Registrant)
November 5, 2003
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EXHIBIT INDEX
3(a) Certificate of Incorporation of the Registrant, as in
effect at November 13, 1987 [Incorporated by reference to
Exhibit 28(c) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1987*].
3(b) By-laws of the Registrant, as in effect at October 20, 1999
[Incorporated by reference to Exhibit 3(b) to the
Registrant's Quarterly Report on Form 10-Q for the
Quarter ended October 2, 1999*].
4(a) The Registrant hereby agrees to furnish the Commission,
upon request, with each instrument defining the rights
of holders of long-term debt of the Registrant with
respect to which the total amount of securities
authorized does not exceed 10% of the total assets of
the Registrant.
4(b) Fixed Charge Coverage and Ownership Agreement dated
as of September 24, 2002 between Sears Roebuck
Acceptance Corp. and Sears, Roebuck and Co.
[Incorporated by reference to Exhibit 4(f)
of Registration Statement No. 333-92082].
4(c) Indenture dated as of October 1, 2002 between the Registrant
and BNY Midwest Trust Company.[Incorporated by reference to
Exhibit 4(b) to Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 28, 2002*].
4(d) Form of Fixed-Rate InterNotes [Incorporated by reference to
Exhibit 4 to the Registrant's Current Report on Form 8-K
dated April 23, 2003*].
4(e) Supplemental Indenture dated as of November 3, 2003 among
the Registrant, Sears Roebuck and Co. and BNY Midwest
Trust Company.**
4(f) Supplemental Indenture dated as of November 3, 2003 among
the Registrant, Sears Roebuck and Co. and JPMorgan Chase Bank
(successor to The Chase Manhatten Bank, N.A.).**
4(g) Guarantee executed by Sears, Roebuck and Co. under the
Indenture, dated as of May 15, 1995, between Registrant and
JPMorgan Chase Bank (successor to The Chase Manhattan Bank,
N.A.), as supplemented by the First Supplemental
Indenture, dated as of November 3, 2003**
4(h) Guarantee executed by Sears, Roebuck and Co. under the Indenture,
dated as of October 1, 2002, between Registrant and BNY Midwest
Trust Company, as supplemented by the First Supplemental Indenture,
dated as of November 3, 2003**
10 Acknowledgement and Extension Agreement, dated as of
August 19, 2003, among Sears, Roebuck and Co. ("Sears"),
Registrant, and Certain Lenders that are parties to the
364-Day Credit Agreement dated as of February 24, 2003
[Incorporated by reference to Exhibit 10(c) to
Sears'Quarterly Report on Form 10-Q for the quarter ended
September 27, 2003 (SEC File No 1-416)].
12 Calculation of ratio of earnings to fixed charges.**
15 Acknowledgement of awareness from Deloitte & Touche LLP,
dated November 4, 2003, concerning unaudited financial
information.**
31(a) Certification of Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002**
31(b) Certification of Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002**
32 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted by
Section 906 of the Sarbanes-Oxley Act of 2002**
-----------------------
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* SEC File No. 1-4040. ** Filed herewith.
EXHIBIT 4(e)
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of November 3, 2003 (this "First Supplemental Indenture"), is by and among SEARS ROEBUCK ACCEPTANCE CORP., a corporation organized and existing under the laws of the State of Delaware (the "Company"), SEARS, ROEBUCK AND CO., a corporation organized and existing under the laws of the State of New York ("Sears") and BNY MIDWEST TRUST COMPANY, an Illinois trust company (the "Trustee").
PRELIMINARY STATEMENT
The Company and the Trustee have entered into an Indenture, dated as of October 1, 2002 (the "Indenture"). Capitalized terms used herein have the meanings assigned to them in the Indenture unless otherwise indicated. In Section 11.1 of Article XI of the Indenture it is provided that, among other things, the Company, when authorized by resolution of its Board, and the Trustee, subject to the conditions and restrictions in the Indenture contained, may from time to time and at any time enter into an indenture or indentures supplemental thereto for the following purposes among others: to add to the covenants and agreements of the Company for the benefit of the Holders of all or any series of Securities.
The Company created and issued under and in accordance with the provisions of the Indenture, the Securities identified on Annex A hereto (collectively, the "Notes").
Sears now desires to guarantee payment of principal, interest and premium (if any) on the Notes irrevocably and unconditionally and to enter into this First Supplemental Indenture to evidence this guarantee of the Notes.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
1.The following shall be added as additional definitions in
Section 1.1 of Article I of the Indenture:
Benefitted Party
The term "Benefitted Party" shall have the meaning specified in
Section 14.13.
First Supplemental Indenture
The term "First Supplemental Indenture" shall mean the First Supplemental Indenture, dated November 3, 2003, by and among the Company, Sears and the Trustee.
Notes
The term "Notes" shall have the meaning specified in the Preliminary Statement of the First Supplemental Indenture and shall include all Securities outstanding under the Indenture on the date hereof and any Security issued upon registration of transfer or exchange of any such Security or upon replacement of a lost, stolen, mutilated or destroyed such Security, but shall not mean any Securities authorized and issued after the date hereof.
Guarantee
The term "Guarantee" shall mean the guarantee of Sears set forth in Section 14.13.
2.The following shall be added as new Section 14.13 of Article XIV of the Indenture:
Section 14.13. Guarantee. Subject to the provisions of this Indenture and any supplemental indenture hereto, Sears hereby irrevocably and unconditionally guarantees to each Holder of a Note outstanding on the date of the First Supplemental Indenture or any Note thereafter authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, that: (i) the principal of (and premium, if any) and interest on the Notes shall be paid in full when due, whether at maturity, by acceleration or otherwise, and (ii) in case of any extension of time in payment or renewal of any Notes or pursuant to any cure period provisions of the Notes or the Indenture, they shall be paid in full when due in accordance with the terms of the extension or renewal or cure period. Failing payment when due of any amount so guaranteed, Sears shall be obligated to pay the same. Sears agrees that this is a guarantee of payment and not a guarantee of collection. For the avoidance of doubt, the Guarantee does not extend to nor shall it benefit the Holder of any Security issued under the Indenture other than the Notes, including any Security authorized and issued after the date hereof, unless the terms of such Security specifically make this Guarantee applicable thereto and Sears consents to such application.
Sears hereby agrees that its obligations with regard to
the Guarantee shall be unconditional, irrespective of any circumstances
which might otherwise constitute a legal or equitable defense
of a guarantor. In the event of a default in the payment of
principal, interest or premium (if any) the Trustee or any
Holder of Notes may seek to enforce the Guarantee against
Sears without first proceeding against the Company.
Sears further, to the extent permitted by law, hereby
waives (a) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of
any other person or the failure of the Trustee, the Holders
or the Company (each a "Benefitted Party") to file or
enforce a claim against the estate (in administration,
bankruptcy or any other proceeding) of any other person,
(b) notice of the existence, creation or incurring of any new
or additional indebtedness or obligation, (c) any defense based
upon an election of remedies by a Benefitted Party, including
but not limited to an election law which provides that the
obligation of a surety must be neither larger in amount nor
in other respects more burdensome than that of the principal,
(d) any defense arising because of a Benefitted
Party's election, in any proceeding instituted under
Federal bankruptcy law, of the application of
11 U.S.C. Section 1111(b)(2) or (e) any defense based
on any borrowing or grant of a security
interest under 11 U.S.C. Section 364. Sears hereby
covenants that the Guarantee shall not be
discharged except by complete payment of principal,
interest and premium (if any) in accordance
with the provisions contained in the Notes, the Guarantee,
this Indenture and any supplemental indenture hereto.
If any Holder or the Trustee is required by any court or otherwise to return to either the Company or Sears, or any custodian acting in relation to either the Company or Sears, any amount paid by the Company or Sears to the Trustee or such Holder, the Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Sears agrees that it shall not be entitled to any right of subrogation in relation to the Holders or the Trustee in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.
The Guarantee is a continuing guarantee and shall remain in full force and effect and shall be binding upon Sears and its successors and assigns until full and final payment of all of principal, interest and premium (if any) under the Notes and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof.
Sears acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this First Supplemental Indenture. Sears, and by its acceptance hereof, each beneficiary hereof, hereby confirms that it is its intention that the Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Federal bankruptcy law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal, state or foreign law to the extent applicable to the Guarantee. To effectuate the foregoing intention, each such person hereby irrevocably agrees that the obligation of Sears under the Guarantee shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of Sears that are relevant under such laws, result in the obligations of Sears in respect of such maximum amount not constituting a fraudulent transfer or conveyance.
3. Effect of First Supplemental Indenture
Sears hereby agrees that by virtue of its execution and delivery of this First Supplemental Indenture, it shall be deemed to have signed on each Note issued under the Indenture the notation of the Guarantee and accordingly, the Guarantee shall be deemed to be a part of each Note.
4. Miscellaneous
Ratification of Indenture; First Supplemental Indenture; Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This First Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a Note heretofore or hereafter authenticated and delivered shall be bound hereby.
Governing Law. This First Supplemental Indenture shall be governed in accordance with the internal laws of the State of Delaware.
Trustee Makes No Representations. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture.
Counterparts. This First Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument.
Effect of Headings. All descriptive headings of this First Supplemental Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS HEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and the corporate seal of the Trustee to be hereunto affixed and attested, all as of the day and year first above written.
SEARS ROEBUCK ACCEPTANCE CORP.
By: /s/ Keith E. Trost
-------------------
Name: Keith E. Trost
Title: President
Attest:
/s/Kristin L. Kruska
--------------------
Name: Kristin L. Kruska
Title: Assistant Secretary
|
SEARS, ROEBUCK AND CO.
By: /s/Glenn R. Richter
---------------------
Name: Glenn R. Richter
Title: Senior Vice President and Chief Financial Officer
Attest:
/s/April Hanes-Dowd
-----------------------
Name: April Hanes-Dowd
Title: Secretary
|
BNY MIDWEST TRUST COMPANY,
As Trustee
By: /s/M. Callahan
----------------------
Name: M. Callahan
Title: Assistant Vice President
Attest:
/s/ D. G. Donovan
--------------------
Name: D. G. Donovan
Title: Assistant Vice President
|
ANNEX A
MATURITY
SERIES DATE COUPON CUSIP# PRINCIPAL
-------------- -------- ------- ------- ---------
Medium Term Notes Series VI 1/7/04 Variable 81240QMS8 $ 201,385,000
Medium Term Notes Series VI 1/7/04 Variable 81240QMS8 $ 57,000,000
Medium Term Notes Series VI 2/23/04 Variable 81240QMT6 $ 60,100,000
Medium Term Notes Series VI 2/23/04 Variable 81240QMT6 $ 95,500,000
Medium Term Notes Series VI 2/23/04 Variable 81240QMT6 $ 3,000,000
Medium Term Notes Series VI 2/23/04 Variable 81240QMT6 $ 20,000,000
Medium Term Notes Series VI 2/23/04 Variable 81240QMT6 $ 15,000,000
Medium Term Notes Series VI 3/23/04 Variable 81240QMU3 $ 50,000,000
Medium Term Notes Series VI 4/23/04 Variable 81240QMV1 $ 85,500,000
Medium Term Notes Series VI 4/23/04 Variable 81240QMV1 $ 45,000,000
Medium Term Notes Series VI 4/23/04 Variable 81240QMV1 $ 25,000,000
Medium Term Notes Series VI 5/11/04 Variable 81240QMW9 $ 132,000,000
Medium Term Notes Series VI 5/11/04 Variable 81240QMW9 $ 31,500,000
Medium Term Notes Series VI 5/11/04 Variable 81240QMW9 $ 500,000
Medium Term Notes Series VI 5/11/04 Variable 81240QMW9 $ 2,000,000
Medium Term Notes Series VI 5/11/04 Variable 81240QMW9 $ 5,000,000
Medium Term Notes Series VI 5/12/04 Variable 81240QMX7 $ 25,000,000
Medium Term Notes Series VII 2/20/04 Variable 81240QMY5 $ 98,050,000
Medium Term Notes Series VII 2/20/04 Variable 81240QMY5 $ 200,000
Medium Term Notes Series VII 2/20/04 Variable 81240QMY5 $ 6,500,000
Medium Term Notes Series VII 2/20/04 Variable 81240QMY5 $ 40,000,000
Medium Term Notes Series VII 2/20/04 Variable 81240QMY5 $ 5,000,000
Medium Term Notes Series VII 2/25/04 Variable 81240QMZ2 $ 35,500,000
Medium Term Notes Series VII 2/25/04 Variable 81240QMZ2 $ 1,000,000
Medium Term Notes Series VII 2/25/04 Variable 81240QMZ2 $ 77,000,000
Medium Term Notes Series VII 2/25/04 Variable 81240QMZ2 $ 50,000,000
Medium Term Notes Series VII 2/25/04 Variable 81240QMZ2 $ 25,000,000
Medium Term Notes Series VII 2/25/04 Variable 81240QMZ2 $ 61,700,000
Medium Term Notes Series VII 3/9/04 Variable 81240QNA6 $ 6,000,000
Medium Term Notes Series VII 3/9/04 Variable 81240QNA6 $ 6,000,000
Medium Term Notes Series VII 3/9/04 Variable 81240QNA6 $ 50,000,000
Medium Term Notes Series VII 3/9/04 Variable 81240QNA6 $ 69,700,000
InterNotes Series I 12/15/05 5.650% 8124JFAA4 $ 35,384,000
InterNotes Series I 12/17/07 6.600% 8124JFAB2 $ 32,125,000
InterNotes Series I 12/17/12 7.400% 8124JFAC0 $ 45,163,000
InterNotes Series I 12/15/09 7.250% 8124JFAD8 $ 34,341,000
InterNotes Series I 12/15/05 5.750% 8124JFAE6 $ 42,917,000
InterNotes Series I 12/17/07 6.700% 8124JFAF3 $ 25,351,000
InterNotes Series I 12/17/12 7.500% 8124JFAG1 $ 54,895,000
InterNotes Series I 12/15/09 7.300% 8124JFAH9 $ 27,994,000
InterNotes Series I 1/16/06 6.000% 8124JFAJ5 $ 16,419,000
InterNotes Series I 1/15/08 7.000% 8124JFAK2 $ 17,834,000
InterNotes Series I 1/15/13 7.500% 8124JFAL0 $ 14,229,000
InterNotes Series I 1/15/10 7.400% 8124JFAM8 $ 10,459,000
InterNotes Series I 1/17/06 5.900% 8124JFAN6 $ 23,187,000
InterNotes Series I 1/15/08 6.900% 8124JFAP1 $ 19,777,000
InterNotes Series I 1/15/13 7.500% 8124JFAQ9 $ 21,498,000
InterNotes Series I 1/15/10 7.400% 8124JFAR7 $ 19,068,000
InterNotes Series I 1/17/06 5.900% 8124JFAS5 $ 50,190,000
InterNotes Series I 1/15/08 6.750% 8124JFAT3 $ 56,371,000
InterNotes Series I 1/15/13 7.500% 8124JFAU0 $ 36,380,000
InterNotes Series I 1/15/10 7.450% 8124JFAV8 $ 40,699,000
InterNotes Series I 1/17/06 5.400% 8124JFAW6 $ 59,717,000
InterNotes Series I 1/15/08 6.150% 8124JFAX4 $ 43,647,000
InterNotes Series I 2/15/05 4.950% 8124JFAY2 $ 89,413,000
InterNotes Series I 2/15/08 6.200% 8124JFAZ9 $ 39,998,000
InterNotes Series I 2/15/06 5.400% 8124JFBA3 $ 50,182,000
InterNotes Series I 2/15/08 6.100% 8124JFBB1 $ 27,315,000
InterNotes Series I 2/15/06 5.500% 8124JFBC9 $ 40,414,000
InterNotes Series I 2/15/08 6.250% 8124JFBD7 $ 24,063,000
InterNotes Series I 2/15/06 5.800% 8124JFBE5 $ 58,535,000
InterNotes Series I 2/15/08 6.650% 8124JFBF2 $ 46,362,000
InterNotes Series I 3/15/06 5.400% 8124JFBG0 $ 40,439,000
InterNotes Series I 3/17/08 6.200% 8124JFBH8 $ 24,349,000
InterNotes Series I 3/15/13 7.150% 8124JFBJ4 $ 13,819,000
InterNotes Series I 3/15/10 7.000% 8124JFBK1 $ 20,171,000
InterNotes Series I 3/15/06 5.200% 8124JFBL9 $ 26,670,000
InterNotes Series I 3/17/08 6.000% 8124JFBM7 $ 15,595,000
InterNotes Series I 3/15/13 7.050% 8124JFBN5 $ 8,358,000
InterNotes Series I 3/15/10 6.800% 8124JFBP0 $ 6,002,000
InterNotes Series I 3/15/06 5.750% 8124JFBQ8 $ 27,233,000
InterNotes Series I 3/17/08 6.650% 8124JFBR6 $ 18,041,000
InterNotes Series I 3/15/10 7.375% 8124JFBS4 $ 10,572,000
InterNotes Series I 3/15/13 7.750% 8124JFBT2 $ 10,792,000
InterNotes Series I 4/17/06 4.800% 8124JFBU9 $ 17,315,000
InterNotes Series I 4/15/08 5.600% 8124JFBV7 $ 11,146,000
InterNotes Series I 4/17/06 4.350% 8124JFBW5 $ 8,084,000
InterNotes Series I 4/15/08 5.250% 8124JFBX3 $ 7,349,000
InterNotes Series I 4/15/10 5.850% 8124JFBY1 $ 2,062,000
InterNotes Series I 4/15/13 6.450% 8124JFBZ8 $ 8,666,000
InterNotes Series I 5/15/06 4.050% 8124JFCA2 $ 5,190,000
InterNotes Series I 5/15/08 5.000% 8124JFCB0 $ 17,614,000
InterNotes Series I 5/17/10 5.625% 8124JFCC8 $ 2,288,000
InterNotes Series I 5/15/13 6.200% 8124JFCD6 $ 12,360,000
InterNotes Series II 5/15/06 3.850% 8124JFCE4 $ 5,562,000
InterNotes Series II 5/15/08 4.800% 8124JFCF1 $ 5,681,000
InterNotes Series II 5/17/10 5.450% 8124JFCH7 $ 4,309,000
InterNotes Series II 5/15/13 6.000% 8124JFCJ3 $ 8,851,000
InterNotes Series II 5/15/06 3.750% 8124JFCK0 $ 6,963,000
InterNotes Series II 5/15/08 4.750% 8124JFCL8 $ 5,872,000
InterNotes Series II 5/17/10 5.350% 8124JFCM6 $ 4,042,000
InterNotes Series II 5/15/13 6.000% 8124JFCN4 $ 13,799,000
InterNotes Series II 5/15/06 3.500% 8124JFCP9 $ 5,095,000
InterNotes Series II 5/15/08 4.350% 8124JFCQ7 $ 6,396,000
InterNotes Series II 5/17/10 5.000% 8124JFCR5 $ 4,386,000
InterNotes Series II 5/15/13 5.650% 8124JFCS3 $ 6,782,000
InterNotes Series II 5/15/06 3.550% 8124JFCT1 $ 5,709,000
InterNotes Series II 5/15/08 4.300% 8124JFCU8 $ 3,331,000
InterNotes Series II 5/17/10 4.950% 8124JFCV6 $ 3,570,000
InterNotes Series II 5/15/13 5.550% 8124JFCW4 $ 8,128,000
InterNotes Series II 6/15/06 3.500% 8124JFCX2 $ 4,169,000
InterNotes Series II 6/16/08 4.300% 8124JFCY0 $ 4,599,000
InterNotes Series II 6/15/10 4.950% 8124JFCZ7 $ 1,899,000
InterNotes Series II 6/17/13 5.500% 8124JFDA1 $ 6,340,000
InterNotes Series II 6/15/06 3.300% 8124JFDB9 $ 5,513,000
InterNotes Series II 6/16/08 4.100% 8124JFDC7 $ 6,630,000
InterNotes Series II 6/15/10 4.750% 8124JFDD5 $ 2,249,000
InterNotes Series II 6/17/13 5.400% 8124JFDE3 $ 14,202,000
InterNotes Series II 6/15/06 2.700% 8124JFDF0 $ 4,823,000
InterNotes Series II 6/16/08 3.550% 8124JFDG8 $ 2,480,000
InterNotes Series II 6/15/10 4.250% 8124JFDH6 $ 3,806,000
InterNotes Series II 6/17/13 4.900% 8124JFDJ2 $ 4,289,000
InterNotes Series II 6/15/06 2.700% 8124JFDK9 $ 1,808,000
InterNotes Series II 6/15/08 3.500% 8124JFDL7 $ 1,682,000
InterNotes Series II 6/15/10 4.150% 8124JFDM5 $ 2,234,000
InterNotes Series II 7/15/06 2.900% 8124JFDN3 $ 4,112,000
InterNotes Series II 7/15/08 3.850% 8124JFDP8 $ 2,450,000
InterNotes Series II 7/15/10 4.550% 8124JFDQ6 $ 5,013,000
Retail 2/1/43 7.400% 812404507 $ 250,000,000
|
EXHIBIT 4(f)
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of November 3, 2003 (this "First Supplemental Indenture"), is by and among SEARS ROEBUCK ACCEPTANCE CORP., a corporation organized and existing under the laws of the State of Delaware (the "Company"), SEARS, ROEBUCK AND CO., a corporation organized and existing under the laws of the State of New York ("Sears") and JPMORGAN CHASE BANK (successor to THE CHASE MANHATTAN BANK, N.A.), a state banking corporation (the "Trustee").
PRELIMINARY STATEMENT
The Company and the Trustee have entered into an Indenture, dated as of May 15, 1995 (the "Indenture"). Capitalized terms used herein have the meanings assigned to them in the Indenture unless otherwise indicated.
In Section 11.1 of Article XI of the Indenture it is provided that, among other things, the Company, when authorized by resolution of its Board, and the Trustee, subject to the conditions and restrictions in the Indenture contained, may from time to time and at any time enter into an indenture or indentures supplemental thereto for the following purposes among others: to add to the covenants and agreements of the Company for the benefit of the Holders of all or any series of Securities.
The Company created and issued under and in accordance with the provisions of the Indenture, the Securities identified on Annex A hereto (collectively, the "Notes").
Sears now desires to guarantee payment of principal, interest and premium (if any) on the Notes irrevocably and unconditionally and to enter into this First Supplemental Indenture to evidence this guarantee of the Notes.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
1. The following shall be added as additional definitions in Section 1.1 of Article I of the Indenture:
Benefitted Party
The term "Benefitted Party" shall have the meaning specified in Section 14.13.
First Supplemental Indenture
The term "First Supplemental Indenture" shall mean the First Supplemental Indenture, dated November 3, 2003, by and among the Company, Sears and the Trustee.
Notes
The term "Notes" shall have the meaning specified in the Preliminary Statement of the First Supplemental Indenture and shall include all Securities outstanding under the Indenture on the date hereof and any Security issued upon registration of transfer or exchange of any such Security or upon replacement of a lost, stolen, mutilated or destroyed such Security, but shall not mean any Securities authorized and issued after the date hereof.
Guarantee
The term "Guarantee" shall mean the guarantee of Sears set forth in
Section 14.13.
2. The following shall be added as new Section 14.13 of Article XIV of the Indenture:
Section 14.13. Guarantee. Subject to the provisions of this Indenture and any supplemental indenture hereto, Sears hereby irrevocably and unconditionally guarantees to each Holder of a Note outstanding on the date of the First Supplemental Indenture or any Note thereafter authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, that: (i) the principal of (and premium, if any) and interest on the Notes shall be paid in full when due, whether at maturity, by acceleration or otherwise, and (ii) in case of any extension of time in payment or renewal of any Notes or pursuant to any cure period provisions of the Notes or the Indenture, they shall be paid in full when due in accordance with the terms of the extension or renewal or cure period. Failing payment when due of any amount so guaranteed, Sears shall be obligated to pay the same. Sears agrees that this is a guarantee of payment and not a guarantee of collection. For the avoidance of doubt, the Guarantee does not extend to nor shall it benefit the Holder of any Security issued under the Indenture other than the Notes, including any Security authorized and issued after the date hereof, unless the terms of such Security specifically make this Guarantee applicable thereto and Sears consents to such application.
Sears hereby agrees that its obligations with regard
to the Guarantee shall be unconditional, irrespective of
any circumstances which might otherwise constitute a legal or
equitable defense of a guarantor. In the event of a default
in the payment of principal, interest or premium (if any) the
Trustee or any Holder of Notes may seek to enforce the Guarantee
against Sears without first proceeding against the Company.
Sears further, to the extent permitted by law, hereby waives
(a) any defense that may arise by reason of the incapacity,
lack of authority, death or disability of any other person
or the failure of the Trustee, the Holders or the Company
(each a "Benefitted Party") to file or enforce a claim
against the estate (in administration, bankruptcy or any
other proceeding) of any other person, (b) notice of the
existence, creation or incurring of any new or additional
indebtedness or obligation, (c) any defense based upon an
election of remedies by a Benefitted Party, including but
not limited to an election law which provides that the
obligation of a surety must be neither larger in amount
nor in other respects more burdensome than that of the
principal, (d) any defense arising because of a Benefitted
Party's election, in any proceeding instituted under
Federal bankruptcy law, of the application of
11 U.S.C. Section 1111(b)(2) or (e) any defense based on
any borrowing or grant of a security interest under
11 U.S.C. Section 364. Sears hereby covenants that
the Guarantee shall not be discharged except by
complete payment of principal, interest and premium
(if any) in accordance with the provisions contained
in the Notes, the Guarantee, this Indenture and any supplemental
indenture hereto.
If any Holder or the Trustee is required by any court or otherwise to return to either the Company or Sears, or any custodian acting in relation to either the Company or Sears, any amount paid by the Company or Sears to the Trustee or such Holder, the Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Sears agrees that it shall not be entitled to any right of subrogation in relation to the Holders or the Trustee in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.
The Guarantee is a continuing guarantee and shall remain in full force and effect and shall be binding upon Sears and its successors and assigns until full and final payment of all of principal, interest and premium (if any) under the Notes and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof.
Sears acknowledges that it will receive direct and
indirect benefits from the financing arrangements
contemplated by this First Supplemental Indenture.
Sears, and by its acceptance hereof, each beneficiary
hereof, hereby confirms that it is its intention that the
Guarantee not constitute a fraudulent transfer or conveyance
for purposes of any Federal bankruptcy law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar Federal, state or foreign law to the extent
applicable to the Guarantee. To effectuate the foregoing
intention, each such person hereby irrevocably agrees that
the obligation of Sears under the Guarantee shall be
limited to the maximum amount as will, after giving effect
to such maximum amount and all other (contingent or otherwise)
liabilities of Sears that are relevant under such laws,
result in the obligations of Sears in respect of such
maximum amount not constituting a fraudulent transfer or
conveyance.
3. Effect of First Supplemental Indenture
Sears hereby agrees that by virtue of its execution and delivery of this First Supplemental Indenture, it shall be deemed to have signed on each Note issued under the Indenture the notation of the Guarantee and accordingly, the Guarantee shall be deemed to be a part of each Note.
4. Miscellaneous
Ratification of Indenture; First Supplemental Indenture; Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This First Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of a Note heretofore or hereafter authenticated and delivered shall be bound hereby.
Governing Law. This First Supplemental Indenture shall be governed in accordance with the internal laws of the State of Delaware.
Trustee Makes No Representations. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture.
Counterparts. This First Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed and delivered shall be an original; but such counterparts shall together constitute but one and the same instrument
Effect of Headings. All descriptive headings of this First Supplemental Indenture are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS HEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and the corporate seal of the Trustee to be hereunto affixed and attested, all as of the day and year first above written.
SEARS ROEBUCK ACCEPTANCE CORP.
By: /s/ Keith E. Trost
---------------------
Name: Keith E. Trost
Title: President
Attest:
/s/ Kristin L. Kruska
-----------------------
Name: Kristin L. Kruska
Title: Assistant Secretary
|
SEARS, ROEBUCK AND CO.
By: /s/ Glenn R. Richter
----------------------
Name: Glenn R. Richter
Title: Senior Vice President and Chief Financial Officer
Attest:
/s/ April Hanes-Dowd
---------------------
Name: April Hanes-Dowd
Title: Secretary
|
JPMORGAN CHASE BANK,
As Trustee
By: /s/ Nicholas Sberlati
------------------------
Name: Nicholas Sberlati
Title: Trust Officer
Attest:
/s/Joanne Adamis
---------------------
Name: Joanne Adamis
Title: Vice President
|
ANNEX A
MATURITY
SERIES DATE COUPON CUSIP# PRINCIPAL
---------------- -------- ------ ------ --------------
Discrete 9/15/05 6.750% 812404AF8 $ 250,000,000
Discrete 1/17/06 6.125% 812404AG6 $ 250,000,000
Discrete 11/15/06 6.700% 812404AT8 $ 300,000,000
Discrete 6/15/07 7.000% 812404AV3 $ 500,000,000
Discrete 9/18/07 6.700% 812404AW1 $ 150,000,000
Discrete 10/15/27 7.500% 812404AX9 $ 250,000,000
Discrete 10/15/17 6.875% 812404AY7 $ 300,000,000
Discrete 1/18/28 6.750% 812404AZ4 $ 200,000,000
Discrete 12/1/28 6.500% 812404BE0 $ 300,000,000
Discrete 5/1/09 6.250% 812404BF7 $ 750,000,000
Discrete 2/1/11 7.000% 812404BG5 $ 800,000,000
Discrete 8/15/11 6.750% 812404BH3 $ 750,000,000
Discrete 2/1/11 7.000% 812404BG5 $ 200,000,000
Discrete 4/16/12 6.700% 812404BJ9 $ 600,000,000
Discrete 6/1/32 7.000% 812404BK6 $ 1,000,000,000
Medium Term Notes Series I 11/15/05 6.130% 81240QBW1 $ 575,000
Medium Term Notes Series I 11/15/05 6.150% 81240QBX9 $ 4,402,000
Medium Term Notes Series I 11/15/05 6.110% 81240QBZ4 $ 100,000
Medium Term Notes Series I 12/12/05 6.330% 81240QCL4 $ 1,250,000
Medium Term Notes Series I 12/13/05 6.380% 81240QCM2 $ 5,000,000
Medium Term Notes Series I 1/3/06 6.360% 81240QCU4 $ 4,000,000
Medium Term Notes Series I 1/9/06 6.300% 81240QCY6 $ 5,000,000
Medium Term Notes Series I 1/9/06 6.310% 81240QCZ3 $ 1,000,000
Medium Term Notes Series III 11/4/03 6.700% 81240QGN6 $ 2,250,000
Medium Term Notes Series III 11/4/03 6.690% 81240QGP1 $ 10,000,000
Medium Term Notes Series III 11/5/03 6.720% 81240QGQ9 $ 30,000,000
Medium Term Notes Series III 11/5/03 6.710% 81240QGR7 $ 27,000,000
Medium Term Notes Series III 11/5/03 6.720% 81240QGQ9 $ 5,000,000
Medium Term Notes Series III 11/6/03 6.680% 81240QGS5 $ 1,000,000
Medium Term Notes Series III 11/20/03 6.560% 81240QGT3 $ 155,000,000
Medium Term Notes Series III 11/20/03 6.580% 81240QGU0 $ 2,000,000
Medium Term Notes Series III 12/15/03 7.130% 81240QFR8 $ 32,000,000
Medium Term Notes Series III 10/10/06 7.060% 81240QGC0 $ 5,000,000
Medium Term Notes Series III 5/9/07 7.200% 81240QHD7 $ 5,000,000
Medium Term Notes Series III 5/21/07 7.150% 81240QHE5 $ 5,000,000
Medium Term Notes Series III 6/4/04 7.120% 81240QHF2 $ 5,000,000
Medium Term Notes Series III 6/4/04 7.110% 81240QHH8 $ 5,000,000
Medium Term Notes Series III 6/4/04 7.100% 81240QHK1 $ 1,500,000
Medium Term Notes Series III 6/4/04 7.100% 81240QHK1 $ 5,000,000
Medium Term Notes Series III 6/17/04 6.930% 81240QHP0 $ 10,000,000
Medium Term Notes Series III 6/17/04 6.940% 81240QHQ8 $ 2,000,000
Medium Term Notes Series III 6/17/04 6.950% 81240QHR6 $ 22,000,000
Medium Term Notes Series III 6/17/04 6.920% 81240QHS4 $ 10,000,000
Medium Term Notes Series III 6/17/04 6.950% 81240QHR6 $ 4,000,000
Medium Term Notes Series III 6/17/04 6.920% 81240QHS4 $ 25,000,000
Medium Term Notes Series III 6/17/04 6.930% 81240QHP0 $ 8,000,000
Medium Term Notes Series III 6/19/07 7.040% 81240QHT2 $ 10,000,000
Medium Term Notes Series III 6/17/04 6.940% 81240QGQ8 $ 1,000,000
Medium Term Notes Series III 6/17/04 6.920% 81240QHS4 $ 15,000,000
Medium Term Notes Series III 6/24/04 6.850% 81240QHV7 $ 13,700,000
Medium Term Notes Series III 6/24/04 6.860% 81240QHW5 $ 1,000,000
Medium Term Notes Series IV 8/13/07 6.470% 81240QJD5 $ 5,000,000
Medium Term Notes Series IV 9/22/04 6.600% 81240QJK9 $ 3,500,000
Medium Term Notes Series IV 10/18/04 6.270% 81240QJM5 $ 5,000,000
Medium Term Notes Series IV 11/5/07 6.600% 81240QJN3 $ 5,000,000
Medium Term Notes Series IV 11/22/04 6.375% 81240QJX1 $ 5,000,000
Medium Term Notes Series IV 12/6/04 6.300% 81240QKC5 $ 5,000,000
Medium Term Notes Series IV 11/29/04 6.530% 81240QKF8 $ 12,000,000
Medium Term Notes Series IV 12/5/07 6.560% 81240QKJ0 $ 7,000,000
Medium Term Notes Series IV 12/5/07 6.560% 81240QKJ0 $ 4,000,000
Medium Term Notes Series IV 12/18/07 6.340% 81240QKK7 $ 5,000,000
Medium Term Notes Series IV 1/18/05 6.000% 81240QKM3 $ 5,000,000
Medium Term Notes Series IV 2/7/05 6.000% 81240QKP6 $ 5,000,000
Medium Term Notes Series IV 2/25/05 6.100% 81240QKQ4 $ 5,000,000
Medium Term Notes Series IV 2/18/04 6.060% 81240QKT8 $ 2,600,000
Medium Term Notes Series IV 2/24/04 6.100% 81240QKY7 $ 10,200,000
Medium Term Notes Series IV 2/24/04 6.100% 81240QKY7 $ 10,000,000
Medium Term Notes Series IV 2/24/04 6.120% 81240QKZ4 $ 10,000,000
Medium Term Notes Series IV 2/24/04 6.120% 81240QKZ4 $ 10,000,000
Medium Term Notes Series IV 3/18/08 6.300% 81240QLB6 $ 5,000,000
Medium Term Notes Series IV 4/8/08 6.280% 81240QLD2 $ 5,000,000
Medium Term Notes Series IV 4/17/09 6.490% 81240QLE0 $ 15,000,000
Medium Term Notes Series IV 5/1/08 6.240% 81240QLF7 $ 5,000,000
Medium Term Notes Series IV 5/29/08 6.300% 81240QLH3 $ 5,000,000
Medium Term Notes Series IV 5/18/12 6.635% 81240QLJ9 $ 10,000,000
Medium Term Notes Series IV 6/2/08 6.250% 81240QLK6 $ 5,000,000
Medium Term Notes Series IV 6/19/08 6.190% 81240QLL4 $ 5,000,000
Medium Term Notes Series IV 7/14/08 6.170% 81240QLM2 $ 5,000,000
Medium Term Notes Series IV 7/15/08 6.200% 81240QLN0 $ 5,000,000
Medium Term Notes Series IV 7/21/08 6.100% 81240QLP5 $ 5,000,000
Medium Term Notes Series IV 8/9/10 6.200% 81240QLQ3 $ 5,000,000
Medium Term Notes Series IV 8/15/13 6.510% 81240QLR1 $ 15,000,000
Medium Term Notes Series IV 8/15/08 6.125% 81240QLS9 $ 5,000,000
Medium Term Notes Series IV 9/10/08 6.100% 81240QLT7 $ 5,000,000
Medium Term Notes Series V 12/15/03 5.530% 81240QLW0 $ 10,000,000
Medium Term Notes Series V 11/20/08 6.000% 81240QLU4 $ 5,000,000
Medium Term Notes Series V 11/24/08 6.000% 81240QLV2 $ 5,000,000
Medium Term Notes Series V 12/14/05 5.660% 81240QLX8 $ 10,000,000
Medium Term Notes Series V 1/20/09 5.750% 81240QLY6 $ 5,000,000
Medium Term Notes Series V 2/12/09 5.700% 81240QLZ3 $ 5,000,000
Medium Term Notes Series V 3/5/09 5.875% 81240QMA7 $ 5,000,000
Medium Term Notes Series V 3/16/09 6.125% 81240QMB5 $ 5,000,000
Medium Term Notes Series V 3/30/09 6.050% 81240QMC3 $ 5,000,000
Medium Term Notes Series V 4/15/09 6.000% 81240QMD1 $ 5,000,000
Medium Term Notes Series V 2/3/06 0.000% 81240QMJ8 $ 25,000,000
Medium Term Notes Series V 10/13/04 Variable 81240QMN9 $ 100,000,000
Medium Term Notes Series V 9/22/04 4.500% 81240QMR0 $ 15,000,000
Retail 7/15/42 7.000% 812404408 $ 250,000,000
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EXHIBIT 4(g)
GUARANTEE
Sears, Roebuck and Co., a corporation organized and existing under the laws of the State of New York ("Sears"), under the Indenture, dated as of May 15, 1995, between Sears Roebuck Acceptance Corp., a corporation organized and existing under the laws of the State of Delaware (the "Company") and JPMorgan Chase Bank (successor to The Chase Manhattan Bank, N.A.), a state banking corporation (the "Trustee"), as supplemented by the First Supplemental Indenture, dated as of November 3, 2003 (the "First Supplemental Indenture"), among the Company,Sears and the Trustee (as so supplemented, the "Indenture"), has irrevocably and unconditionally guaranteed that (a) the principal of (and premium, if any) and interest on the Notes shall be paid in full when due, whether at maturity, by acceleration or otherwise, and (b) in case of any extension of time in payment or renewal of any Notes or pursuant to any cure period provisions of the Notes or the Indenture, they shall be paid in full when due in accordance with the terms of the extension, renewal or cure period (the "Guarantee"). Failing payment when due of any amount so guaranteed, the Guarantee obligates Sears to pay the same. In the event of a default in the payment of principal, interest or premium (if any), the Trustee or any Holder of Notes may enforce the Guarantee against Sears without first proceeding against the Company. Capitalized terms used herein have the meanings assigned to them in the Indenture unless otherwise indicated.
The obligations of Sears to the Holders of Notes and to the Trustee pursuant to the Guarantee are expressly set forth in the First Supplemental Indenture and reference is hereby made to such First Supplemental Indenture for the precise terms of the Guarantee.
No stockholder, officer, director or incorporator, as such, past, present or future of Sears shall have any liability under the Guarantee by reason of his, her or its status as such stockholder,officer, director or incorporator.
The Guarantee shall be applicable to all Notes outstanding on the date hereof and any Note authenticated after the date of the Guarantee, in accordance with the terms of the Indenture whether or not a notation of the Guarantee is endorsed on any Note. The Guarantee is a continuing guarantee and shall remain in full force and effect and shall be binding upon Sears and its successors and assigns until full and final payment of all of principal, interest and premium (if any) under the Notes and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. The Guarantee is a guarantee of payment, not of collectibility.
Sears hereby confirms that it is its intention that this Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Federal bankruptcy law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal, state or foreign law to the extent applicable to this Guarantee (the "Applicable Laws"). In the event that this Guarantee would constitute or result in a violation of any Applicable Law, the liability of Sears under this Guarantee shall be reduced to the maximum amount permissible under such Applicable Law
Dated:
November 3, 2003
SEARS, ROEBUCK AND CO.
By: /s/ Glenn R. Richter ----------------------------- Name: Glenn R. Richter Title: Senior Vice President and Chief Financial Officer |
13115443
13115443
EXHIBIT 4(h)
GUARANTEE
Sears, Roebuck and Co., a corporation organized and existing under the laws of the State of New York ("Sears"), under the Indenture, dated as of October 1, 2002, between Sears Roebuck Acceptance Corp., a corporation organized and existing under the laws of the State of Delaware (the "Company") and BNY Midwest Trust Company, an Illinois trust company (the "Trustee"), as supplemented by the First Supplemental Indenture, dated as of November 3, 2003 (the "First Supplemental Indenture"), among the Company, Sears and the Trustee (as so supplemented, the "Indenture"), has irrevocably and unconditionally guaranteed that (a) the principal of (and premium, if any) and interest on the Notes shall be paid in full when due, whether at maturity, by acceleration or otherwise, and (b) in case of any extension of time in payment or renewal of any Notes or pursuant to any cure period provisions of the Notes or the Indenture, they shall be paid in full when due in accordance with the terms of the extension, renewal or cure period (the "Guarantee"). Failing payment when due of any amount so guaranteed, the Guarantee obligates Sears to pay the same. In the event of a default in the payment of principal, interest or premium (if any), the Trustee or any Holder of Notes may enforce the Guarantee against Sears without first proceeding against the Company. Capitalized terms used herein have the meanings assigned to them in the Indenture unless otherwise indicated.
The obligations of Sears to the Holders of Notes and to the Trustee pursuant to the Guarantee are expressly set forth in the First Supplemental Indenture and reference is hereby made to such First Supplemental Indenture for the precise terms of the Guarantee.
No stockholder, officer, director or incorporator, as such, past, present or future of Sears shall have any liability under the Guarantee by reason of his, her or its status as such stockholder, officer, director or incorporator.
The Guarantee shall be applicable to all Notes outstanding on the date hereof and any Note authenticated after the date of the Guarantee, in accordance with the terms of the Indenture whether or not a notation of the Guarantee is endorsed on any Note. The Guarantee is a continuing guarantee and shall remain in full force and effect and shall be binding upon Sears and its successors and assigns until full and final payment of all of principal, interest and premium (if any) under the Notes and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such t ransferee or assignee, all subject to the terms and conditions hereof. The Guarantee is a guarantee of payment, not of collectibility.
Sears hereby confirms that it is its intention that this Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Federal bankruptcy law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal, state or foreign law to the extent applicable to this Guarantee (the "Applicable Laws"). In the event that this Guarantee would constitute or result in a violation of any Applicable Law, the liability of Sears under this Guarantee shall be reduced to the maximum amount permissible under such Applicable Law.
Dated:
November 3, 2003
SEARS, ROEBUCK AND CO.
By: _/s/ Glenn R. Richter ------------------------- Name: Glenn R. Richter Title: Senior Vice President and Chief Financial Officer |
EXHIBIT 12
SEARS ROEBUCK ACCEPTANCE CORP.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
13 Weeks Ended 39 Weeks Ended
Sept.27, Sept 28, Sept 27, Sept 28,
(millions) 2003 2002 2003 2002
----- ----- ------ ------
INCOME BEFORE INCOME TAXES $ 54 $ 52 $ 158 $ 150
PLUS FIXED CHARGES:
Interest 196 202 595 578
Loss on debt extinguishment 7 - 7 -
Amortization of debt
discount/premium 5 3 16 10
----- ----- ----- -----
Total fixed charges 208 205 618 588
----- ----- ------ ------
EARNINGS BEFORE INCOME TAXES
AND FIXED CHARGES $ 262 $ 257 $ 776 $ 738
===== ===== ===== =====
RATIO OF EARNINGS TO FIXED
CHARGES 1.26 1.25 1.26 1.26
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EXHIBIT 15
Sears Roebuck Acceptance Corp.
Greenville, Delaware
We have made a review, in accordance with standards established by the American Institute of Certified Public Accountants, of the unaudited interim financial information of Sears Roebuck Acceptance Corp. for the 13 week and 39 week periods ended September 27, 2003 and September 28, 2002, as indicated in our report dated November 4, 2003; because we did not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended September 27, 2003, is incorporated by reference in Registration Statement No.333-92082 on Form S-3.
We are also aware that the aforementioned reports, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP ------------------------- Deloitte & Touche LLP Philadelphia, Pennsylvania November 4, 2003 |
EXHIBIT 31(a)
CERTIFICATIONS
I, Keith E. Trost, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sears Roebuck Acceptance Corp.
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
(a) Designed such disclosure controls and procedures, or caused such disclosures contols to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report ) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 5, 2003
By: /s/ Keith E. Trost
-------------------
Keith E. Trost
President (principal executive officer)
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EXHIBIT 31(b)
CERTIFICATIONS
I, George F. Slook, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Sears Roebuck Acceptance Corp.
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
(a) Designed such disclosure controls and procedures, or caused such disclosures contols to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(c) Disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report ) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 5, 2003
By: /s/ George F. Slook
----------------------
George F. Slook
Vice President, Finance
(principal financial officer)
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EXHIBIT 32
CERTIFICATION
Pursuant to 18 U.S.C. 1350 as adopted by Section 906 of the Sarbanes-Oxley Act of 2002
Each of the undersigned, Keith E. Trost, President of Sears Roebuck Acceptance Corp. (the "Company") and George F. Slook, Vice President, Finance of the Company, has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 27, 2003 (the ''Report'').
Each of the undersigned hereby certifies that:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act
of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
November 5, 2003.
/s/ Keith E. Trost ------------------ Keith E. Trost President /s/ George F. Slook ------------------- George F. Slook Vice President, Finance |
.