Exhibit 10(c)

ACKNOWLEDGEMENT AND EXTENSION AGREEMENT

Dated as of August 19, 2003

To the Lenders parties to
The Credit Agreement
Referred to below and
Citibank N.A., as Agent

Ladies and Gentlemen:

     Reference is made to the 364-Day Credit Agreement, dated as of February 24,
2003 (the “Credit Agreement”; capitalized terms not otherwise defined in this
Acknowledgement and Extension Agreement have the same meanings as specified in
the Credit Agreement), among Sears Roebuck Acceptance Corp. (the “Borrower”),
the lenders parties thereto, Bank One, NA, as syndication agent, Barclays Bank
PLC and Bank of America, N.A., as documentation agents, Salomon Smith Barney
Inc. and Banc One Capital Markets, Inc., as joint lead arrangers and joint
bookrunners, and Citibank, N.A., as administrative agent.

     Sears, Roebuck and Co. has announced that it has contracted to sell its
Credit and Financial Products business unit (including the assets associated
with such business unit) to Citigroup (or any of its subsidiaries) (the “Sale”).
The Borrower has determined that (i) as a result of the Sale, the aggregate
Commitments under the Credit Agreement will be more than will be required for
the ongoing financing needs of the Borrower and (ii) it is advisable to request
that, effective upon consummation of the Sale, the Termination Date be extended
to May 24, 2004.

     Subject to the condition that the Required Lenders shall have executed and
returned this Acknowledgement and Extension Agreement to the Agent as provided
herein (the “Agreement Effectiveness”), the Lenders, Borrower and Citibank N.A.,
as Agent, hereby agree as follows:

     (1)  Reduction of Commitment. Subject to the Agreement Effectiveness, the
Borrower hereby gives irrevocable notice, pursuant to Section 2.04(a) of the
Credit Agreement that, effective on the date that is thirty (30) days after the
date on which the Sale or substantially all of the Sale is consummated, the
respective Commitments of the Lenders shall be permanently reduced ratably in an
aggregate amount of $1,000,000,000.

     (2)  Extension of Termination Date. Notwithstanding anything in Section
2.17 of the Credit Agreement to the contrary but subject to the conditions set
forth in Section 3.02 of the Credit Agreement (taking into account the Agreement
Effectiveness), the Lenders that have duly executed and returned this
Acknowledgement and Extension Agreement irrevocably consent to the extension of
the Termination Date (as it relates solely to the Commitment (after giving
effect to the reduction contemplated above) of each such consenting Lender) to
May 24, 2004, such extension being subject to the Sale or substantially all of
the Sale being consummated. For the avoidance of doubt, Lenders that have duly
executed this Acknowledgement and Extension Agreement shall be deemed to be
Consenting Lenders pursuant to Section 2.17 of the Credit Agreement and Lenders
that have not executed this Acknowledgement and Extension Agreement shall be
deemed to be Non-Consenting Lenders thereunder and the extension of the
Termination Date shall not apply with respect to the Commitment of such Lenders.
Except as expressly provided in this paragraph (2), the provisions of
Section 2.17 shall continue to be, and shall remain, in full force and effect,
including without limitation with respect to the extension of any Termination
Date occurring after February 23, 2004. Subject to (x) the Agreement
Effectiveness and (y) the Sale or substantially all of the Sale being
consummated, the Borrower agrees that it will not exercise the Term Loan
Election before February 24, 2004.

 

--------------------------------------------------------------------------------

 

     (3)  Maturity Date in Case of Term Loan Election. The Borrower hereby
acknowledges and agrees that, subject to the Sale or substantially all of the
Sale being consummated, if the Term Loan Election is exercised pursuant to
Section 2.05 of the Credit Agreement, the Maturity Date shall be November 25,
2004.

     Each party executing this Acknowledgement and Extension Agreement is asked
to (i) return two counterparts hereof to Susan L. Hobart, Shearman & Sterling
LLP, 599 Lexington Avenue, New York, New York 10022 and (ii) fax a copy of the
executed Acknowledgement to Susan L. Hobart (tel. 212-848-7847; fax
646-848-7847), in each case on or before the Return Date.

     This Acknowledgement and Extension Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same document. Delivery of an
executed counterpart of this Acknowledgement and Extension Agreement by
telecopier shall be effective as delivery of a manually executed counterpart
hereof.

     This Acknowledgement and Extension Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

Very truly yours,

              SEARS ROEBUCK ACCEPTANCE CORP.   SEARS, ROEBUCK AND CO.          
    By:   /s/ Keith E. Trost   By:   /s/ Glenn R. Richter    

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

    Name: Keith E. Trost
Title: President       Name: Glenn R. Richter
Title: Senior V.P. and CFO

ACKNOWLEDGED AND AGREED AND COMMITMENT EXTENSION APPROVED:

BANCA NAZIONALE DEL LAVORO S.p.A., NEW YORK BRANCH

              By:   /s/ Francesco Di Mario   By:   /s/ Carlo Vecchi    

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

    Name: Francesco Di Mario
Title: Vice President       Name: Carlo Vecchi
Title: Senior Vice President

 

--------------------------------------------------------------------------------

 

        BANCO POPULAR DE PUERTO RICO, NEW YORK BRANCH
    By:   /s/ Hector J. Gonzalez

--------------------------------------------------------------------------------

    Name:   Hector J. Gonzalez      Title:   Vice President      BANK OF
AMERICA, N.A.
    By:   /s/ Kimberley A. Whitney

--------------------------------------------------------------------------------

    Name:   Kimberley A. Whitney      Title:   Managing Director      BANK
HAPOALIM.B.M.
    By:   /s/ Marc Bosc

--------------------------------------------------------------------------------

    Name:   Marc Bosc      Title:   Vice President      THE BANK OF NEW YORK
    By:   /s/ Randolph E.J. Medrano

--------------------------------------------------------------------------------

    Name:   Randolph E.J. Medrano      Title:   Vice President      THE BANK OF
NOVA SCOTIA
    By:   /s/ Nadine Bell

--------------------------------------------------------------------------------

    Name:   Nadine Bell      Title:   Sr. Manager   

--------------------------------------------------------------------------------

 

        BANK ONE N.A.
    By:   /s/ Vincent R. Henchek

--------------------------------------------------------------------------------

    Name:   Vincent R. Henchek      Title:   Director      BARCLAYS BANK PLC
    By:   /s/ John Giannone

--------------------------------------------------------------------------------

    Name:   John Giannone      Title:   Director      BEAR STEARNS CORPORATE
LENDING INC.
    By:   /s/ Keith C. Barnish

--------------------------------------------------------------------------------

    Name:   Keith C. Barnish      Title:   Executive Vice President      BMO
NESBITT BURNS FINANCING, INC.
    By:   /s/ Joseph W. Linder

--------------------------------------------------------------------------------

    Name:   Joseph W. Linder      Title:   Vice President     

BNP PARIBAS

              By:   /s/ Peter Labrie   By:   /s/ Rosalie Hawley    

--------------------------------------------------------------------------------

     

--------------------------------------------------------------------------------

    Name: Peter Labrie
Title: Central Region Manager       Name: Rosalie Hawley
Title: Director

--------------------------------------------------------------------------------

 

              CIBC               By:   /s/ Dominic J. Sorresso

--------------------------------------------------------------------------------

Name: Dominic J. Sorresso             Title: Executive Director             CIBC
World Markets Corp., as Agent                   CITIBANK, N.A               By:
  /s/ Judith Green

--------------------------------------------------------------------------------

Name: Judith Green         Title: Vice President           DEUTSCHE BANK AG NEW
YORK BRANCH               By:   /s/ Thomas A. Foley

--------------------------------------------------------------------------------

Name: Thomas A. Foley   By:   /s/ Patrick Dutilly

--------------------------------------------------------------------------------

Name: Patrick Dutilly     Title: Director       Title: Director              
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES               By:   /s/
Deborah Carlson

--------------------------------------------------------------------------------

Name: Deborah Carlson   By:   /s/ Stephen Kovach

--------------------------------------------------------------------------------

Name: Stephen Kovach     Title: Director       Title: Vice President            
  FLEET NATIONAL BANK               By:   /s/ Bethany R. Halligan

--------------------------------------------------------------------------------

Name: Bethany R. Halligan   By:   /s/ Stephen J. Garvin

--------------------------------------------------------------------------------

Name: Stephen J. Garvin     Title: Managing Director       Title: Managing
Director

--------------------------------------------------------------------------------

 

              FIFTH THIRD BANK               By:   /s/ Christopher D. Jones

--------------------------------------------------------------------------------

Name: Christopher D. Jones             Title: Vice President                    
  FIRST HAWAIIAN BANK               By:   /s/ Charles L. Jenkins

--------------------------------------------------------------------------------

Name: Charles L. Jenkins             Title: Vice President, Manager            
          HSBC BANK USA               By:   /s/ Robert Corder

--------------------------------------------------------------------------------

Name: Robert Corder             Title: First Vice President                    
  HSH NORDBANK , NEW YORK BRANCH               By:   /s/ Drew von Glahn

--------------------------------------------------------------------------------

Name: Drew von Glahn   By:   /s/ Amy Lu

--------------------------------------------------------------------------------

Name: Amy Lu     Title: Senior Vice President       Title: AVP     Head of
Corporate Banking                       HUNTINGTON NATIONAL BANK              
By:   /s/ Pamela LeRose

--------------------------------------------------------------------------------

Name: Pamela LeRose             Title: Vice President        

 

--------------------------------------------------------------------------------

 

              KEYBANK NATIONAL ASSOCIATION               By:   /s/ David J.
Wechter

--------------------------------------------------------------------------------

Name: David J. Wechter             Title: Vice President                      
MELLON BANK, N.A               By:   /s/ Mark F. Johnston

--------------------------------------------------------------------------------

Name: Mark F. Johnston             Title: Vice President                      
MERRILL LYNCH BANK USA               By:   /s/ Louis Alder

--------------------------------------------------------------------------------

Name: Louis Alder
Title: Vice President                       MORGAN STANLEY BANK              
By:   /s/ Jaap L. Tonckens

--------------------------------------------------------------------------------

Name: Jaap L. Tonckens             Title: Vice President                      
NATIONAL CITY BANK               By:   /s/ Brian T. Strayton

--------------------------------------------------------------------------------

Name: Brian T. Strayton             Title: Vice President        

 

--------------------------------------------------------------------------------

 

              THE NORTHERN TRUST COMPANY               By:   /s/ Craig Smith

--------------------------------------------------------------------------------

Name: Craig Smith             Title: Vice President                       PNC
BANK, N.A               By:   /s/ Hana M. Deiter

--------------------------------------------------------------------------------

Name: Hana M. Deiter             Title: Vice President                      
ROYAL BANK OF CANADA               By:   /s/ Scott Umbs

--------------------------------------------------------------------------------

Name: Scott Umbs             Title: Authorized Signatory                      
STATE STREET BANK AND TRUST COMPANY               By:   /s/ Juan G. Sierra

--------------------------------------------------------------------------------

Name: Juan G. Sierra             Title: Assistant Vice President                
      UBS AG, CAYMAN ISLANDS BRANCH               By:   /s/ Patricia O’Kicki

--------------------------------------------------------------------------------

Name: Patricia O’Kicki   By:   /s/ Luke Goldsworthy

--------------------------------------------------------------------------------

Name: Luke Goldsworthy     Title: Director       Title: Associate Director      
                Banking Products Services, US

 

--------------------------------------------------------------------------------

 

              U.S. BANK NATIONAL ASSOCIATION               By:   /s/ John
Franceschi

--------------------------------------------------------------------------------

Name: John Franceschi             Title: Vice President                      
WACHOVIA BANK, NATIONAL ASSOCIATION               By:   /s/ Beth Rue

--------------------------------------------------------------------------------

Name: Beth Rue             Title: Associate                       WELLS FARGO
BANK, NATIONAL ASSOCIATION               By:   /s/ Charles W. Reed

--------------------------------------------------------------------------------

Name: Charles W. Reed   By:   /s/ Melissa F. Nachman

--------------------------------------------------------------------------------

Name: Melissa F. Nachman     Title: Vice President       Title: Vice President  
            WESTLB AG (f/k/a/ WESTDEUTSCHE LANDESBANK GIROZENTRALE), NEW YORK
BRANCH               By:   /s/ Salvatore Battinelli

--------------------------------------------------------------------------------

Name: Salvatore Battinelli   By:   /s/ Barry Wadler

--------------------------------------------------------------------------------

Name: Barry Wadler     Title: Managing Director       Title: Associate Director
              WILLIAM STREET COMMITMENT CORPORATION               By:   /s/
Jennifer M. Hill

--------------------------------------------------------------------------------

Name: Jennifer M. Hill
Title: Chief Financial Officer