Exhibit 4




Exhibit 10(a)

364-DAY CREDIT AGREEMENT

Dated as of February 24, 2003

SEARS ROEBUCK ACCEPTANCE CORP.,
a Delaware corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders (the "Initial Lenders")
listed on the signature pages hereof, 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. ("Citibank"), as
agent (the "Agent") for the Lenders (as hereinafter defined),
agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.
Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):

"Advance"
  means an advance by a Lender to the Borrower as part of a Borrowing and refers
  to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be a
  "Type" of Advance).

  "Affiliate"
  means, as to any Person, any other Person that, directly or indirectly,
  controls, is controlled by or is under common control with such Person or is a
  director or officer of such Person. For purposes of this definition, the term
  "control" (including the terms "controlling",
  "controlled by" and "under common control with") of a
  Person means the possession, direct or indirect, of the power to vote 10% or
  more of the Voting Stock of such Person or to direct or cause the direction of
  the management and policies of such Person, whether through the ownership of
  Voting Stock, by contract or otherwise.

  "Agent's Account"
  means the account of the Agent maintained by the Agent at Citibank at its
  office at 388 Greenwich Street, New York, New York 10013, Account
  No. 36852248, Attention: Bank Loan Syndications.

  "Applicable Lending
  Office" means, with respect to each Lender, such Lender's Domestic
  Lending Office in the case of a Base Rate Advance and such Lender's Eurodollar
  Lending Office in the case of a Eurodollar Rate Advance.

  "Applicable Margin"
  means (a) for Base Rate Advances as of any date prior to the Term Loan
  Conversion Date, 0% per annum, (b) for Base Rate Advances as of any date on
  and after the Term Loan Conversion Date, a percentage per annum determined by
  reference to the Public Debt Rating in effect on such date as set forth below
  and (c) for Eurodollar Rate Advances, as of any date, a percentage per annum
  determined by reference to the Public Debt Rating in effect on such date as
  set forth below:





	
      Public Debt Rating

      S&P/Moody's
	
      Applicable Margin for

      Base Rate Advances

      On and After the Term

      Loan Conversion Date
	
      Applicable Margin for

      Eurodollar Rate

      advances Prior to the

      Term Loan Conversion Date
	
      Applicable Margin for

      Eurodollar Rate

      Advances On and After

      the Term Loan

      Conversion Date

	
      Level 1

      A+ or A1 or above
	
      0.000%
	
      0.190%
	
      0.600%

	
      Level 2

      A or A2
	
      0.000%
	
      0.270%
	
      0.700%

	
      Level 3

      A- or A3
	
      0.000%
	
      0.400%
	
      1.000%

	
      Level 4

      BBB+ or Baa1
	
      0.000%
	
      0.625%
	
      1.500%

	
      Level 5

      BBB or Baa2
	
      0.250%
	
      0.825%
	
      1.750%

	
      Level 6

      Lower than Level 5
	
      1.000%
	
      1.000%
	
      2.500%




 

"Applicable Percentage"
  means, as of any date prior to the Term Loan Conversion Date, a percentage per
  annum determined by reference to the Public Debt Rating in effect on such date
  as set forth below:





	
      Public Debt Rating

      S&P/Moody's
	
      Applicable

      Percentage

	
      Level 1

      A+ or A1 or above
	
      0.060%

	
      Level 2

      A or A2
	
      0.080%

	
      Level 3

      A- or A3
	
      0.100%

	
      Level 4

      BBB+ or Baa1
	
      0.125%

	
      Level 5

      BBB or Baa2
	
      0.175%

	
      Level 6

      Lower than Level 5
	
      0.250%





  "Applicable
  Utilization Fee" means, as of any date prior to the Term Loan
  Conversion Date that the aggregate Advances exceed 50% of the aggregate
  Commitments, a percentage per annum determined by reference to the Public Debt
  Rating in effect on such date as set forth below:

  



	
      Public Debt Rating

      S&P/Moody's
	
      Applicable

      Utilization Fee

	
      Level 1

      A+ or A1 or above
	
      0.100%

	
      Level 2

      A or A2
	
      0.100%

	
      Level 3

      A- or A3
	
      0.250%

	
      Level 4

      BBB + or Baa1
	
      0.250%

	
      Level 5

      BBB or Baa2
	
      0.250%

	
      Level 6

      Lower than Level 5
	
      0.250%





  "Assignment and
  Acceptance" means an assignment and acceptance entered into by a
  Lender and an Eligible Assignee, and accepted by the Agent, in substantially
  the form of Exhibit C hereto.

  "Assuming Lender"
  has the meaning specified in Section 2.16(d).

  "Assumption Agreement"
  has the meaning specified in Section 2.16(d)(ii).

  "Authorized Officer"
  means the president, vice president, finance or any other person acceptable to
  the Required Lenders.

  "Base Rate"
  means a fluctuating interest rate per annum in effect from time to time, which
  rate per annum shall at all times be equal to the highest of:

  (a) the rate of interest
    announced publicly by Citibank in New York, New York, from time to
    time, as Citibank's base rate;

    (b) the sum (adjusted to the
    nearest 1/4 of 1% or, if there is no nearest 1/4 of 1%, to the next higher
    1/4 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the rate
    obtained by dividing (A) the latest three-week moving average of
    secondary market morning offering rates in the United States for three-month
    certificates of deposit of major United States money market banks, such
    three-week moving average (adjusted to the basis of a year of 360 days)
    being determined weekly on each Monday (or, if such day is not a Business
    Day, on the next succeeding Business Day) for the three-week period ending
    on the previous Friday by Citibank on the basis of such rates reported by
    certificate of deposit dealers to and published by the Federal Reserve Bank
    of New York or, if such publication shall be suspended or terminated,
    on the basis of quotations for such rates received by Citibank from three
    New York certificate of deposit dealers of recognized standing selected
    by Citibank, by (B) a percentage equal to 100% minus the average of the
    daily percentages specified during such three-week period by the Board of
    Governors of the Federal Reserve System (or any successor) for determining
    the maximum reserve requirement (including, but not limited to, any
    emergency, supplemental or other marginal reserve requirement) for Citibank
    with respect to liabilities consisting of or including (among other
    liabilities) three-month U.S. dollar non-personal time deposits in the
    United States, plus (iii) the average during such three-week
    period of the annual assessment rates estimated by Citibank for determining
    the then current annual assessment payable by Citibank to the Federal
    Deposit Insurance Corporation (or any successor) for insuring U.S. dollar
    deposits of Citibank in the United States; and

    (c) 1/2 of one percent per
    annum above the Federal Funds Rate.

  
  "Base Rate Advance"
  means an Advance that bears interest as provided in Section 2.06(a)(i).

  "Borrower Information"
  has the meaning specified in Section 8.08(b).

  "Borrowing"
  means a borrowing consisting of simultaneous Advances of the same Type made by
  each of the Lenders pursuant to Section 2.01.

  "Business Day"
  means a day of the year on which banks are not required or authorized by law
  to close in New York City and, if the applicable Business Day relates to
  any Eurodollar Rate Advances, a day of the year on which dealings are carried
  on in the London interbank market.

  "Commitment"
  means as to any Lender (a) the amount set forth opposite such Lender's
  name on the signature pages hereof, (b) if such Lender has become a Lender
  hereunder pursuant to an Assumption Agreement, the amount set forth in such
  Assumption Agreement or (b) if such Lender has entered into any
  Assignment and Acceptance, the amount set forth for such Lender in the
  Register maintained by the Agent pursuant to Section 8.07(d), as such
  amount may be reduced pursuant to Section 2.04 or increased pursuant to
  Section 2.16.

  "Commitment Date"
  has the meaning specified in Section 2.16(b).

  "Commitment Increase"
  has the meaning specified in Section 2.16(a).

  "Consenting Lender"
  has the meaning specified in Section 2.17(b).

  "Consolidated"
  refers to the consolidation of accounts in accordance with GAAP.

  "Consolidated Debt"
  means at any date the Debt of the Borrower and its Subsidiaries, determined on
  a consolidated basis as of such date.

  "Consolidated Net
  Income" means, for any period, the net income of the Borrower and its
  Subsidiaries for such period.

  "Consolidated
  Stockholder's Equity" means as of any date the total stockholder's
  equity of the Borrower and its Subsidiaries, plus the amount of any SRAC
  Subordinated Debt, as of such date.

  "Consolidated Tangible
  Net Worth" means at any date the Consolidated Stockholder's Equity
  less the consolidated Intangible Assets of the Borrower and its Subsidiaries,
  all determined as of such date. For purposes of this definition
  "Intangible Assets" means the amount (to the extent reflected as an
  asset on the consolidated statement of financial position of the Borrower and
  its Subsidiaries) of (a) all write-ups (other than write-ups resulting from
  foreign currency translations and write-ups of assets of a going concern
  business made within twelve months after the acquisition of such business)
  subsequent to December 29, 2001 in the book value of any asset owned by the
  Borrower or a Subsidiary and (b) all unamortized debt discount and expense to
  the extent reflected as an asset on a consolidated statement of financial
  position of the Borrower and its Subsidiaries, unamortized service marks,
  trade names, anticipated future benefit of tax loss carry-forwards,
  copyrights, organization or developmental expenses and other intangible
  assets.

  "Convert",
  "Conversion" and "Converted" each refers to
  a conversion of Advances of one Type into Advances of the other Type pursuant
  to Section 2.07 or 2.08.

  "Credit Agreement
  Support Letter" means the letter agreement dated as of the date
  hereof between the Borrower and Sears.

  "Debt" of any
  Person means, without duplication, (a) all indebtedness of such Person
  for borrowed money, (b) all obligations of such Person for the deferred
  purchase price of property or services (other than trade payables incurred in
  the ordinary course of such Person's business), (c) all obligations of
  such Person evidenced by notes, bonds, debentures or other similar
  instruments, (d) all obligations of such Person created or arising under
  any conditional sale or other title retention agreement with respect to
  property acquired by such Person (even though the rights and remedies of the
  seller or lender under such agreement in the event of default are limited to
  repossession or sale of such property), (e) all obligations of such
  Person as lessee under leases that have been or should be, in accordance with
  GAAP, recorded as capital leases, (f) all direct recourse payment
  obligations of such Person in respect of any accounts receivable sold by such
  Person, (g) all Debt of others referred to in clauses (a) through (f)
  above or clause (h) below and other payment obligations guaranteed
  directly or indirectly in any manner by such Person, or in effect guaranteed
  directly or indirectly by such Person through an agreement (1) to pay or
  purchase such Debt or to advance or supply funds for the payment or purchase
  of such Debt, (2) to purchase, sell or lease (as lessee or lessor)
  property, or to purchase or sell services, primarily for the purpose of
  enabling the debtor to make payment of such Debt or to assure the holder of
  such Debt against loss, (3) to supply funds to or in any other manner
  invest in the debtor (including any agreement to pay for property or services
  irrespective of whether such property is received or such services are
  rendered) or (4) otherwise to assure a creditor against loss, and
  (h) all Debt referred to in clauses (a) through (g) above
  secured by (or for which the holder of such Debt has an existing right,
  contingent or otherwise, to be secured by) any Lien on property (including,
  without limitation, accounts and contract rights) owned by such Person, even
  though such Person has not assumed or become liable for the payment of such
  Debt; provided that SRAC Subordinated Debt shall not be deemed to be
  Debt for the purpose of determining Debt of the Borrower.

  "Default"
  means any Event of Default or any event that would constitute an Event of
  Default but for the requirement that notice be given or time elapse or both.

  "Demand Notes"
  means the demand promissory notes made by Sears, payable to the order of the
  Borrower, pursuant to the Sears Letter Agreement.

  "Disclosed Litigation"
  has the meaning specified in Section 3.01(b).

  "Domestic Lending
  Office" means, with respect to any Lender, the office of such Lender
  specified as its "Domestic Lending Office" opposite its name on
  Schedule I hereto or in the Assumption Agreement or the Assignment and
  Acceptance pursuant to which it became a Lender, or such other office of such
  Lender as such Lender may from time to time specify to the Borrower and the
  Agent.

  "Effective Date"
  has the meaning specified in Section 3.01.

  "Eligible Assignee"
  means (i) a Lender; (ii) an Affiliate of a Lender; and
  (iii) any other Person approved by the Agent, such approval not to be
  unreasonably withheld or delayed and, unless an Event of Default has occurred
  and is continuing at the time any assignment is effected in accordance with
  Section 8.07, the Borrower, such approval not to be unreasonably withheld or
  delayed; provided, however, that neither the Borrower nor an
  Affiliate of the Borrower shall qualify as an Eligible Assignee.

  "Environmental Action"
  means any action, suit, demand, demand letter, claim, notice of non-compliance
  or violation, notice of liability or potential liability, investigation,
  proceeding, consent order or consent agreement relating in any way to any
  Environmental Law, Environmental Permit or Hazardous Materials or arising from
  alleged injury or threat of injury to health, safety or the environment,
  including, without limitation, (a) by any governmental or regulatory
  authority for enforcement, cleanup, removal, response, remedial or other
  actions or damages and (b) by any governmental or regulatory authority or
  any third party for damages, contribution, indemnification, cost recovery,
  compensation or injunctive relief.

  "Environmental Law"
  means any federal, state, local or foreign statute, law, ordinance, rule,
  regulation, code, order, judgment, decree or judicial or agency
  interpretation, policy or guidance relating to pollution or protection of the
  environment, health, safety or natural resources, including, without
  limitation, those relating to the use, handling, transportation, treatment,
  storage, disposal, release or discharge of Hazardous Materials.

  "Environmental Permit"
  means any permit, approval, identification number, license or other
  authorization required under any Environmental Law.

  "ERISA" means
  the Employee Retirement Income Security Act of 1974, as amended from time to
  time, and the regulations promulgated and rulings issued thereunder.

  "ERISA Affiliate"
  means any Person that for purposes of Title IV of ERISA is a member of
  the Borrower's controlled group, or under common control with the Borrower,
  within the meaning of Section 414 of the Internal Revenue Code.

  "ERISA Event"
  means (a) (i) the occurrence of a reportable event, within the meaning of
  Section 4043 of ERISA, with respect to any Plan unless the 30-day notice
  requirement with respect to such event has been waived by the PBGC, or (ii)
  the requirements of subsection (1) of Section 4043(b) of ERISA (without regard
  to subsection (2) of such Section) are met with respect to a contributing
  sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and an event
  described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
  of ERISA is reasonably expected to occur with respect to such Plan within the
  following 30 days; (b) the application for a minimum funding waiver with
  respect to a Plan; (c) the provision by the administrator of any Plan of
  a notice of intent to terminate such Plan pursuant to Section 4041(a)(2)
  of ERISA (including any such notice with respect to a plan amendment referred
  to in Section 4041(e) of ERISA); (d) the cessation of operations at
  a facility of the Borrower or any ERISA Affiliate in the circumstances
  described in Section 4062(e) of ERISA; (e) the withdrawal by the
  Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan
  year for which it was a substantial employer, as defined in
  Section 4001(a)(2) of ERISA; (f)  the conditions for the imposition
  of a lien under Section 302(f) of ERISA shall have been met with respect
  to any Plan; (g) the adoption of an amendment to a Plan requiring the
  provision of security to such Plan pursuant to Section 307 of ERISA; or
  (h) the institution by the PBGC of proceedings to terminate a Plan
  pursuant to Section 4042 of ERISA, or the occurrence of any event or
  condition described in Section 4042 of ERISA that constitutes grounds for
  the termination of, or the appointment of a trustee to administer, a Plan.

  "Eurocurrency
  Liabilities" has the meaning assigned to that term in
  Regulation D of the Board of Governors of the Federal Reserve System, as
  in effect from time to time.

  "Eurodollar Lending
  Office" means, with respect to any Lender, the office of such Lender
  specified as its "Eurodollar Lending Office" opposite its name on
  Schedule I hereto or in the Assumption Agreement or the Assignment and
  Acceptance pursuant to which it became a Lender (or, if no such office is
  specified, its Domestic Lending Office), or such other office of such Lender
  as such Lender may from time to time specify to the Borrower and the Agent.

  "Eurodollar Rate"
  means, for any Interest Period for each Eurodollar Rate Advance comprising
  part of the same Borrowing, an interest rate per annum equal to the rate per
  annum obtained by dividing (a) the rate per annum (rounded upward to the
  nearest whole multiple of 1/16 of 1% per annum) appearing on Moneyline
  Telerate Markets Page 3750 (or any successor page) as the London interbank
  offered rate for deposits in U.S. dollars at approximately 11:00 A.M. (London
  time) two Business Days prior to the first day of such Interest Period for a
  term comparable to such Interest Period or, if for any reason such rate is not
  available, the average (rounded upward to the nearest whole multiple of
  1/16 of 1% per annum, if such average is not such a multiple) of the rate per
  annum at which deposits in U.S. dollars are offered by the principal office of
  each of the Reference Banks in London, England to prime banks in the London
  interbank market at 11:00 A.M. (London time) two Business Days before the
  first day of such Interest Period in an amount substantially equal to such
  Reference Bank's Eurodollar Rate Advance comprising part of such Borrowing to
  be outstanding during such Interest Period and for a period equal to such
  Interest Period by (b) a percentage equal to 100% minus the Eurodollar
  Rate Reserve Percentage for such Interest Period. If the Moneyline Telerate
  Markets Page 3750 (or any successor page) is unavailable, the Eurodollar Rate
  for any Interest Period for each Eurodollar Rate Advance comprising part of
  the same Borrowing shall be determined by the Agent on the basis of applicable
  rates furnished to and received by the Agent from the Reference Banks two
  Business Days before the first day of such Interest Period or, if fewer than
  two Reference Banks furnish timely information to the Agent, by other adequate
  and reasonable means available to the Agent, subject, however,
  to the provisions of Section 2.07.

  "Eurodollar Rate
  Advance" means an Advance that bears interest as provided in
  Section 2.06(a)(ii).

  "Eurodollar Rate
  Reserve Percentage" for any Interest Period for all Eurodollar Rate
  Advances comprising part of the same Borrowing means the reserve percentage
  applicable two Business Days before the first day of such Interest Period
  under regulations issued from time to time by the Board of Governors of the
  Federal Reserve System (or any successor) for determining the maximum reserve
  requirement (including, without limitation, any emergency, supplemental or
  other marginal reserve requirement) for a member bank of the Federal Reserve
  System in New York City with respect to liabilities or assets consisting
  of or including Eurocurrency Liabilities (or with respect to any other
  category of liabilities that includes deposits by reference to which the
  interest rate on Eurodollar Rate Advances is determined) having a term equal
  to such Interest Period.

  "Events of Default"
  has the meaning specified in Section 6.01.

  "Extension Date"
  has the meaning specified in Section 2.17(b).

  "Federal Funds Rate"
  means, for any period, a fluctuating interest rate per annum equal for each
  day during such period to the weighted average of the rates on overnight
  Federal funds transactions with members of the Federal Reserve System arranged
  by Federal funds brokers, as published for such day (or, if such day is not a
  Business Day, for the next preceding Business Day) by the Federal Reserve Bank
  of New York, or, if such rate is not so published for any day that is a
  Business Day, the average of the quotations for such day on such transactions
  received by the Agent from three Federal funds brokers of recognized standing
  selected by it.

  "Fixed Charge Coverage
  Ratio" means, for any period, the Borrower's ratio of earnings to
  fixed charges, determined for such period in accordance with Item 503(d) of
  Regulation S-K promulgated by the Securities and Exchange Commission, as in
  effect on the date hereof.

  "GAAP" has
  the meaning specified in Section 1.03.

  "Hazardous Materials"
  means (a) petroleum and petroleum products, byproducts or breakdown products,
  radioactive materials, asbestos-containing materials, polychlorinated
  biphenyls and radon gas and (b) any other chemicals, materials or substances
  designated, classified or regulated as hazardous or toxic or as a pollutant or
  contaminant under any Environmental Law.

  "Increase Date"
  has the meaning specified in Section 2.16(a).

  "Increasing Lender"
  has the meaning specified in Section 2.16(d).

  "Information
  Memorandum" means the information memorandum dated January 17, 2003
  used by the Agent in connection with the syndication of the Commitments.

  "Interest Period"
  means, for each Eurodollar Rate Advance comprising part of the same Borrowing,
  the period commencing on the date of such Eurodollar Rate Advance or the date
  of the Conversion of any Base Rate Advance into such Eurodollar Rate Advance
  and ending on the last day of the period selected by the Borrower pursuant to
  the provisions below and, thereafter, each subsequent period commencing on the
  last day of the immediately preceding Interest Period and ending on the last
  day of the period selected by the Borrower pursuant to the provisions below.
  The duration of each such Interest Period shall be one, two, three or six
  months, as the Borrower may, upon notice received by the Agent not later than
  11:00 A.M. (New York City time) on the third Business Day prior to
  the first day of such Interest Period, select; provided, however,
  that:

  (a) the Borrower may not
    select any Interest Period that ends after the Termination Date or,
    if the Advances have been converted to a term loan pursuant to Section 2.05
    prior to such selection, that ends after the Maturity Date;

    (b) Interest Periods
    commencing on the same date for Eurodollar Rate Advances comprising part of
    the same Borrowing shall be of the same duration;

    (c) whenever the last day of
    any Interest Period would otherwise occur on a day other than a Business
    Day, the last day of such Interest Period shall be extended to occur on the
    next succeeding Business Day, provided, however, that, if such
    extension would cause the last day of such Interest Period to occur in the
    next following calendar month, the last day of such Interest Period shall
    occur on the next preceding Business Day; and

    (d) whenever the first day
    of any Interest Period occurs on a day of an initial calendar month for
    which there is no numerically corresponding day in the calendar month that
    succeeds such initial calendar month by the number of months equal to the
    number of months in such Interest Period, such Interest Period shall end on
    the last Business Day of such succeeding calendar month.

  
  "Internal Revenue Code"
  means the Internal Revenue Code of 1986, as amended from time to time, and the
  regulations promulgated and rulings issued thereunder.

  "Lenders"
  means the Initial Lenders, each Assuming Lender that shall become a party
  hereto pursuant to Section 2.16 or 2.17 and each Person that shall become a
  party hereto pursuant to Section 8.07.

  "Lien" means
  any lien, security interest or other charge or encumbrance of any kind, or any
  other type of preferential arrangement, including, without limitation, the
  lien or retained security title of a conditional vendor and any easement,
  right of way or other encumbrance on title to real property, but excluding
  consignments or bailments of goods of third parties.

  "Material Adverse
  Change" means any material adverse change in the business, condition
  (financial or otherwise), operations or prospects of the Borrower or the
  Borrower and its Subsidiaries taken as a whole.

  "Material Adverse
  Effect" means a material adverse effect on (a) the business,
  condition (financial or otherwise), operations or prospects of the Borrower or
  the Borrower and its Subsidiaries taken as a whole, (b) the rights and
  remedies of the Agent or any Lender under this Agreement or the Notes or
  (c) the ability of the Borrower to perform its obligations under this
  Agreement or the Notes.

  "Maturity Date"
  means the earlier of (a) the first anniversary of the Termination Date and (b)
  the date of termination in whole of the aggregate Commitments pursuant to
  Section 2.04 or 6.01.

  "Moody's"
  means Moody's Investors Service, Inc.

  "Multiemployer Plan"
  means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
  which the Borrower or any ERISA Affiliate is making or accruing an obligation
  to make contributions, or has within any of the preceding five plan years made
  or accrued an obligation to make contributions.

  "Multiple Employer
  Plan" means a single employer plan, as defined in
  Section 4001(a)(15) of ERISA, that (a) is maintained for employees
  of the Borrower or any ERISA Affiliate and at least one Person other than the
  Borrower and the ERISA Affiliates or (b) was so maintained and in respect
  of which the Borrower or any ERISA Affiliate could have liability under
  Section 4064 or 4069 of ERISA in the event such plan has been or were to
  be terminated.

  "Non-Consenting Lender"
  has the meaning specified in Section 2.17(b).

  "Note" means
  a promissory note of the Borrower payable to the order of any Lender, in
  substantially the form of Exhibit A hereto, evidencing the aggregate
  indebtedness of the Borrower to such Lender resulting from the Advances made
  by such Lender.

  "Notice of Borrowing"
  has the meaning specified in Section 2.02(a).

  "PBGC" means
  the Pension Benefit Guaranty Corporation (or any successor).

  "Permitted Liens"
  means such of the following as to which no enforcement, collection, execution,
  levy or foreclosure proceeding shall have been commenced: (a) Liens for
  taxes, assessments and governmental charges or levies to the extent not
  required to be paid under Section 5.01(b) hereof; (b) Liens imposed
  by law, such as materialmen's, mechanics', carriers', workmen's and
  repairmen's Liens and other similar Liens arising in the ordinary course of
  business securing obligations that are not overdue for a period of more than
  30 days; (c) pledges or deposits to secure obligations under workers'
  compensation laws or similar legislation or to secure public or statutory
  obligations; and (d) easements, rights of way and other encumbrances on
  title to real property that do not render title to the property encumbered
  thereby unmarketable or materially adversely affect the use of such property
  for its present purposes.

  "Person"
  means an individual, partnership, corporation (including a business trust),
  joint stock company, trust, unincorporated association, joint venture, limited
  liability company or other entity, or a government or any political
  subdivision or agency thereof.

  "Plan" means
  a Single Employer Plan or a Multiple Employer Plan.

  "Public Debt Rating"
  means, as of any date, the rating that has been most recently announced by
  either S&P or Moody's, as the case may be, for any class of non-credit
  enhanced long-term senior unsecured debt issued by the Borrower or, if any
  such rating agency shall have issued more than one such rating , the lowest
  such rating issued by such rating agency. For purposes of the foregoing,
  (a) if only one of S&P and Moody's shall have in effect a Public Debt
  Rating, the Applicable Margin, the Applicable Percentage and the Applicable
  Utilization Fee shall be determined by reference to the available rating;
  (b) if neither S&P nor Moody's shall have in effect a Public Debt
  Rating, the Applicable Margin, the Applicable Percentage and the Applicable
  Utilization Fee will be set in accordance with Level 6 under the definition of
  "Applicable Margin", "Applicable Percentage"
  or "Applicable Utilization Fee", as the case may be;
  (c) if the ratings established by S&P and Moody's shall fall within
  different levels, the Applicable Margin, the Applicable Percentage and the
  Applicable Utilization Fee shall be based upon the higher rating; (d) if
  any rating established by S&P or Moody's shall be changed, such change
  shall be effective as of the date on which such change is first announced
  publicly by the rating agency making such change; and (e) if S&P or
  Moody's shall change the basis on which ratings are established, each
  reference to the Public Debt Rating announced by S&P or Moody's, as the
  case may be, shall refer to the then equivalent rating by S&P or Moody's,
  as the case may be.

  "Reference Banks"
  means Citibank, Bank One, NA, Barclays Bank PLC and Bank of America, N.A.

  "Register"
  has the meaning specified in Section 8.07(d).

  "Required Lenders"
  means at any time Lenders owed at least a majority in interest of the then
  aggregate unpaid principal amount of the Advances owing to Lenders, or, if no
  such principal amount is then outstanding, Lenders having at least a majority
  in interest of the Commitments.

  "S&P"
  means Standard & Poor's, a division of The McGraw-Hill Companies,
  Inc.

  "Sears" means
  Sears, Roebuck and Co., a New York corporation.

  "Sears Letter
  Agreement" means the letter agreement dated as of October 17, 1991
  between the Borrower and Sears.

  "Single Employer Plan"
  means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
  that (a) is maintained for employees of the Borrower or any ERISA
  Affiliate and no Person other than the Borrower and the ERISA Affiliates or
  (b) was so maintained and in respect of which the Borrower or any ERISA
  Affiliate could have liability under Section 4069 of ERISA in the event
  such plan has been or were to be terminated.

  "SRAC Subordinated
  Debt" means any indebtedness for borrowed money of the Borrower to
  any of (a) Sears, (b) a wholly-owned Subsidiary of Sears, (c) a corporation of
  which Sears is a wholly-owned Subsidiary or (d) a wholly-owned Subsidiary of a
  corporation described in clause (c) above, evidenced by notes or other
  evidences of indebtedness for borrowed money which is made subordinate and
  junior in right of payment to the Advances and such other indebtedness for
  borrowed money of the Borrower as may be specified (whether expressly or by
  category) in the instruments evidencing such indebtedness (the Advances and
  all other obligations of the Borrower hereunder and such other indebtedness of
  the Borrower to which the SRAC Subordinated Debt is subordinate and junior
  being herein called "Superior Debt") by provisions no less
  favorable to the holders of the Superior Debt than those set forth in Exhibit
  E.

  "Subsidiary"
  of any Person means any corporation, partnership, joint venture, limited
  liability company, trust or estate of which (or in which) more than 50% of
  (a) the issued and outstanding capital stock having ordinary voting power
  to elect a majority of the Board of Directors of such corporation
  (irrespective of whether at the time capital stock of any other class or
  classes of such corporation shall or might have voting power upon the
  occurrence of any contingency), (b) the interest in the capital or
  profits of such limited liability company, partnership or joint venture or
  (c) the beneficial interest in such trust or estate is at the time
  directly or indirectly owned or controlled by such Person, by such Person and
  one or more of its other Subsidiaries or by one or more of such Person's other
  Subsidiaries.

  "Term Loan Conversion
  Date" means the Termination Date on which all Advances outstanding on
  such date are converted into a term loan pursuant to Section 2.05.

  "Term Loan Election"
  has the meaning specified in Section 2.05.

  "Termination Date"
  means the earlier of (a) February 23, 2004, subject to the extension thereof
  pursuant to Section 2.17 and (b) the date of termination in whole of the
  Commitments pursuant to Section 2.04 or 6.01; provided, however,
  that the Termination Date of any Lender that is a Non-Consenting Lender to any
  requested extension pursuant to Section 2.17 shall be the Termination Date in
  effect immediately prior to the applicable Extension Date for all purposes of
  this Agreement.

  "Voting Stock"
  means capital stock issued by a corporation, or equivalent interests in any
  other Person, the holders of which are ordinarily, in the absence of
  contingencies, entitled to vote for the election of directors (or persons
  performing similar functions) of such Person, even if the right so to vote has
  been suspended by the happening of such a contingency.

  
  SECTION 1.02. Computation
  of Time Periods. In this Agreement in the computation of periods of time
  from a specified date to a later specified date, the word "from"
  means "from and including" and the words "to" and
  "until" each mean "to but excluding".

  SECTION 1.03. Accounting
  Terms. All accounting terms not specifically defined herein shall be
  construed in accordance with generally accepted accounting principles
  consistent with those applied in the preparation of the financial statements
  referred to in Section 4.01(e) ("GAAP"). If
  at any time any change in generally accepted accounting principles would
  affect the computation of any financial ratio or requirement set forth herein,
  and either the Borrower or the Required Lenders shall so request, the Agent,
  the Lenders and the Borrower shall negotiate in good faith to amend such ratio
  or requirement to preserve the original intent thereof in light of such change
  in generally accepted accounting principles (subject to the approval of the
  Required Lenders), provided that, until so amended, (i) such ratio or
  requirement shall continue to be computed in accordance with generally
  accepted accounting principles prior to such change therein and (ii) the
  Borrower shall provide to the Agent and the Lenders financial statements and
  other documents required under this Agreement or as reasonably requested
  hereunder setting forth a reconciliation between calculations of such ratio or
  requirement made before and after giving effect to such change in generally
  accepted accounting principles.

   

  ARTICLE II

  AMOUNTS AND TERMS OF THE
  ADVANCES

  SECTION 2.01. The Advances.
  Each Lender severally agrees, on the terms and conditions hereinafter set
  forth, to make Advances to the Borrower from time to time on any Business Day
  during the period from the Effective Date until the Termination Date in an
  aggregate amount not to exceed at any time outstanding such Lender's
  Commitment. Each Borrowing shall be in an aggregate amount of $75,000,000 or
  an integral multiple of $5,000,000 in excess thereof and shall consist of
  Advances of the same Type made on the same day by the Lenders ratably
  according to their respective Commitments. Within the limits of each Lender's
  Commitment, the Borrower may borrow under this Section 2.01, prepay pursuant
  to Section 2.09 and reborrow under this Section 2.01.

  SECTION 2.02. Making the
  Advances. (a) Each Borrowing shall be made on notice, given not later than
  (x) 11:00 A.M. (New York City time) on the third Business Day
  prior to the date of the proposed Borrowing in the case of a Borrowing
  consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York City time)
  on the date of the proposed Borrowing in the case of a Borrowing consisting of
  Base Rate Advances, by the Borrower to the Agent, which shall give to each
  Lender prompt notice thereof by telecopier or telex. Each such notice of a
  Borrowing (a "Notice of Borrowing") shall be by telephone,
  confirmed immediately in writing, or telecopier or telex in substantially the
  form of Exhibit B hereto, specifying therein the requested (i) date
  of such Borrowing, (ii) Type of Advances comprising such Borrowing,
  (iii) aggregate amount of such Borrowing, and (iv) in the case of a
  Borrowing consisting of Eurodollar Rate Advances, initial Interest Period for
  each such Advance. Each Lender shall, before 1:00 P.M. (New York
  City time) on the date of such Borrowing make available for the account of its
  Applicable Lending Office to the Agent at the Agent's Account, in same day
  funds, such Lender's ratable portion of such Borrowing. After the Agent's
  receipt of such funds and upon fulfillment of the applicable conditions set
  forth in Article III, the Agent will make such funds available to the
  Borrower at the Agent's address referred to in Section 8.02.

  (b) Anything in
    subsection (a) above to the contrary notwithstanding, (i) the
    Borrower may not select Eurodollar Rate Advances for any Borrowing if the
    aggregate amount of such Borrowing is less than $75,000,000 or if the
    obligation of the Lenders to make Eurodollar Rate Advances shall then be
    suspended pursuant to Section 2.07 or 2.11 and (ii) the Eurodollar
    Rate Advances may not be outstanding as part of more than ten separate
    Borrowings.

    (c) Each Notice of Borrowing
    shall be irrevocable and binding on the Borrower. In the case of any
    Borrowing that the related Notice of Borrowing specifies is to be comprised
    of Eurodollar Rate Advances, the Borrower shall indemnify each Lender
    against any loss, cost or expense incurred by such Lender as a result of any
    failure to fulfill on or before the date specified in such Notice of
    Borrowing for such Borrowing the applicable conditions set forth in
    Article III, including, without limitation, any loss (including loss of
    anticipated profits), cost or expense incurred by reason of the liquidation
    or reemployment of deposits or other funds acquired by such Lender to fund
    the Advance to be made by such Lender as part of such Borrowing when such
    Advance, as a result of such failure, is not made on such date.

    (d) Unless the Agent shall
    have received notice from a Lender prior to the time of any Borrowing that
    such Lender will not make available to the Agent such Lender's ratable
    portion of such Borrowing, the Agent may assume that such Lender has made
    such portion available to the Agent on the date of such Borrowing in
    accordance with subsection (a) of this Section 2.02 and the Agent
    may, in reliance upon such assumption, make available to the Borrower on
    such date a corresponding amount. If and to the extent that such Lender
    shall not have so made such ratable portion available to the Agent, such
    Lender and the Borrower severally agree to repay to the Agent forthwith on
    demand such corresponding amount together with interest thereon, for each
    day from the date such amount is made available to the Borrower until the
    date such amount is repaid to the Agent, at (i) in the case of the
    Borrower, the interest rate applicable at the time to Advances comprising
    such Borrowing and (ii) in the case of such Lender, the Federal Funds
    Rate. If such Lender shall repay to the Agent such corresponding amount,
    such amount so repaid shall constitute such Lender's Advance as part of such
    Borrowing for purposes of this Agreement.

    (e) The failure of any
    Lender to make the Advance to be made by it as part of any Borrowing shall
    not relieve any other Lender of its obligation, if any, hereunder to make
    its Advance on the date of such Borrowing, but no Lender shall be
    responsible for the failure of any other Lender to make the Advance to be
    made by such other Lender on the date of any Borrowing.

  
  SECTION 2.03. Fees. (a)
  Facility Fee. The Borrower agrees to pay to the Agent for the account
  of each Lender a facility fee on the aggregate amount of such Lender's
  Commitment from the date hereof in the case of each Initial Lender and from
  the effective date specified in the Assumption Agreement or in the Assignment
  and Acceptance pursuant to which it became a Lender in the case of each other
  Lender until the Termination Date at a rate per annum equal to the Applicable
  Percentage in effect from time to time, payable in arrears quarterly on the
  last day of each March, June, September and December, commencing March 31,
  2003, and on the Termination Date.

  (b) Agent's Fees. The
    Borrower shall pay to the Agent for its own account such fees as may from
    time to time be agreed between the Borrower and the Agent.

  
  SECTION 2.04. Termination
  or Reduction of the Commitments. (a) Optional. The Borrower shall
  have the right, upon at least three Business Days' notice to the Agent, to
  terminate in whole or permanently reduce ratably in part the unused portions
  of the respective Commitments of the Lenders, provided that each
  partial reduction shall be in the aggregate amount of $75,000,000 or an
  integral multiple of $5,000,000 in excess thereof.

  (b) Mandatory. On the
    Termination Date, if the Borrower has made the Term Loan Election in
    accordance with Section 2.05 prior to such date, and from time to time
    thereafter upon each prepayment of the Advances, the Commitments of the
    Lenders shall be automatically and permanently reduced on a pro rata basis
    by an amount equal to the amount by which (i) the aggregate Commitments
    immediately prior to such reduction exceeds (ii) the aggregate unpaid
    principal amount of all Advances outstanding at such time.

  
  SECTION 2.05. Repayment of
  Advances. The Borrower shall, subject to the next succeeding sentence,
  repay to the Agent for the ratable account of the Lenders on the Termination
  Date the aggregate principal amount of the Advances then outstanding. The
  Borrower may, upon not less than five Business Days' notice to the Agent,
  elect (the "Term Loan Election") to convert all of the
  Advances outstanding on the Termination Date in effect at such time into a
  term loan which the Borrower shall repay in full ratably to the Lenders on the
  Maturity Date; provided that the Term Loan Election may not be
  exercised if a Default has occurred and is continuing on the date of notice of
  the Term Loan Election or on the date on which the Term Loan Election is to be
  effected. All Advances converted into a term loan pursuant to this Section
  2.05 shall continue to constitute Advances except that the Borrower may not
  reborrow pursuant to Section 2.01 after all or any portion of such Advances
  have been prepaid pursuant to Section 2.09.

  SECTION 2.06. Interest on
  Advances. (a) Scheduled Interest. The Borrower shall pay interest
  on the unpaid principal amount of each Advance owing to each Lender from the
  date of such Advance until such principal amount shall be paid in full, at the
  following rates per annum:

  (i) Base Rate Advances.
      During such periods as such Advance is a Base Rate Advance, a rate per
      annum equal at all times to the sum of (x) the Base Rate in effect
      from time to time plus (y) the Applicable Margin in effect
      from time to time plus (z) the Applicable Utilization Fee in effect
      from time to time, payable in arrears quarterly on the last day of each
      March, June, September and December during such periods and on the date
      such Base Rate Advance shall be Converted or paid in full.

      (ii) Eurodollar Rate
      Advances. During such periods as such Advance is a Eurodollar Rate
      Advance, a rate per annum equal at all times during each Interest Period
      for such Advance to the sum of (x) the Eurodollar Rate for such
      Interest Period for such Advance plus (y) the Applicable
      Margin in effect from time to time plus (z) the Applicable
      Utilization Fee in effect from time to time, payable in arrears on the
      last day of such Interest Period and, if such Interest Period has a
      duration of more than three months, on each day that occurs during such
      Interest Period every three months from the first day of such Interest
      Period and on the date such Eurodollar Rate Advance shall be Converted or
      paid in full.

    
    (b) Default Interest.
    Upon the occurrence and during the continuance of an Event of Default under
    Section 6.01(a), the Borrower shall pay interest on (i) the unpaid
    principal amount of each Advance owing to each Lender, payable in arrears on
    the dates referred to in clause (a)(i) or (a)(ii) above, at a rate per
    annum equal at all times to 2% per annum above the rate per annum required
    to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above
    and (ii) to the fullest extent permitted by law, the amount of any
    interest, fee or other amount payable hereunder that is not paid when due,
    from the date such amount shall be due until such amount shall be paid in
    full, payable in arrears on the date such amount shall be paid in full and
    on demand, at a rate per annum equal at all times to 2% per annum above the
    rate per annum required to be paid on Base Rate Advances pursuant to
    clause (a)(i) above.

  
  SECTION 2.07. Interest Rate
  Determination. (a) Each Reference Bank agrees to furnish to the Agent
  timely information for the purpose of determining each Eurodollar Rate. If any
  one or more of the Reference Banks shall not furnish such timely information
  to the Agent for the purpose of determining any such interest rate, the Agent
  shall determine such interest rate on the basis of timely information
  furnished by the remaining Reference Banks. The Agent shall give prompt notice
  to the Borrower and the Lenders of the applicable interest rate determined by
  the Agent for purposes of Section 2.06(a)(i) or (ii), and the rate, if
  any, furnished by each Reference Bank for the purpose of determining the
  interest rate under Section 2.06(a)(ii).

  (b) If, with respect to any
    Eurodollar Rate Advances, the Required Lenders notify the Agent that the
    Eurodollar Rate for any Interest Period for such Advances will not
    adequately reflect the cost to such Required Lenders of making, funding or
    maintaining their respective Eurodollar Rate Advances for such Interest
    Period, the Agent shall forthwith so notify the Borrower and the Lenders,
    whereupon (i) each Eurodollar Rate Advance will automatically, on the last
    day of the then existing Interest Period therefor, Convert into a Base Rate
    Advance, and (ii) the obligation of the Lenders to make, or to Convert
    Advances into, Eurodollar Rate Advances shall be suspended until the Agent
    shall notify the Borrower and the Lenders that the circumstances causing
    such suspension no longer exist.

    (c) If the Borrower shall
    fail to select the duration of any Interest Period for any Eurodollar Rate
    Advances in accordance with the provisions contained in the definition of
    "Interest Period" in Section 1.01, the Agent will forthwith
    so notify the Borrower and the Lenders and such Advances will automatically,
    on the last day of the then existing Interest Period therefor, Convert into
    Base Rate Advances.

    (d) On the date on which the
    aggregate unpaid principal amount of Eurodollar Rate Advances comprising any
    Borrowing shall be reduced, by payment or prepayment or otherwise, to less
    than $75,000,000, such Advances shall automatically Convert into Base Rate
    Advances.

    (e) Upon the occurrence and
    during the continuance of any Event of Default under Section 6.01(a), (i) each
    Eurodollar Rate Advance will automatically, on the last day of the then
    existing Interest Period therefor, Convert into a Base Rate Advance and
    (ii) the obligation of the Lenders to make, or to Convert Advances
    into, Eurodollar Rate Advances shall be suspended.

    (f) If Moneyline Telerate
    Markets Page 3750 is unavailable and fewer than two Reference Banks furnish
    timely information to the Agent for determining the Eurodollar Rate for any
    Eurodollar Rate Advances unless adequate and reasonable means exist for the
    Agent to determine the Eurodollar Rate for any requested Interest Period
    with respect to a proposed Eurodollar Rate Advance,

    (i) the Agent shall
      forthwith notify the Borrower and the Lenders that the interest rate
      cannot be determined for such Eurodollar Rate Advances,

      (ii) with respect to
      Eurodollar Rate Advances, each such Advance will automatically, on the
      last day of the then existing Interest Period therefor, Convert into a
      Base Rate Advance (or if such Advance is then a Base Rate Advance, will
      continue as a Base Rate Advance), and

      (iii) the obligation of
      the Lenders to make Eurodollar Rate Advances or to Convert Advances into
      Eurodollar Rate Advances shall be suspended until the Agent shall notify
      the Borrower and the Lenders that the circumstances causing such
      suspension no longer exist.

    
  
  SECTION 2.08. Optional
  Conversion of Advances. The Borrower may on any Business Day, upon notice
  given to the Agent not later than 11:00 A.M. (New York City time) on
  the third Business Day prior to the date of the proposed Conversion and
  subject to the provisions of Sections 2.07 and 2.11, Convert all Advances
  of one Type comprising the same Borrowing into Advances of the other Type; provided,
  however, that any Conversion of Eurodollar Rate Advances into Base Rate
  Advances shall be made only on the last day of an Interest Period for such
  Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar
  Rate Advances shall be in an amount not less than the minimum amount specified
  in Section 2.02(b) and no Conversion of any Advances shall result in more
  separate Borrowings than permitted under Section 2.02(b). Each such
  notice of a Conversion shall, within the restrictions specified above, specify
  (i) the date of such Conversion, (ii) the Advances to be Converted,
  and (iii) if such Conversion is into Eurodollar Rate Advances, the
  duration of the initial Interest Period for each such Advance. Each notice of
  Conversion shall be irrevocable and binding on the Borrower.

  SECTION 2.09. Prepayments
  of Advances. The Borrower may, upon notice at least two Business Days'
  prior to the date of such prepayment, in the case of Eurodollar Rate Advances,
  and not later than 11:00 A.M. (New York City time) on the date of such
  prepayment, in the case of Base Rate Advances, to the Agent stating the
  proposed date and aggregate principal amount of the prepayment, and if such
  notice is given the Borrower shall, prepay the outstanding principal amount of
  the Advances comprising part of the same Borrowing in whole or ratably in
  part, together with accrued interest to the date of such prepayment on the
  principal amount prepaid; provided, however, that (x) each
  partial prepayment shall be in an aggregate principal amount of $75,000,000 or
  an integral multiple of $5,000,000 in excess thereof and (y) in the event
  of any such prepayment of a Eurodollar Rate Advance, the Borrower shall be
  obligated to reimburse the Lenders in respect thereof pursuant to
  Section 8.04(c).

  SECTION 2.10. Increased
  Costs. (a) If, due to either (i) the introduction of or any change in
  or in the interpretation of any law or regulation or (ii) the compliance
  with any guideline or request from any central bank or other governmental
  authority (whether or not having the force of law), there shall be any
  increase in the cost to any Lender of agreeing to make or making, funding or
  maintaining Eurodollar Rate Advances (excluding for purposes of this Section
  2.10 any such increased costs resulting from (i) Taxes or Other Taxes (as to
  which Section 2.13 shall govern) and (ii) changes in the basis of taxation of
  overall net income or overall gross income by the United States or by the
  foreign jurisdiction or state under the laws of which such Lender is organized
  or has its Applicable Lending Office or any political subdivision thereof),
  then the Borrower shall from time to time, upon demand by such Lender (with a
  copy of such demand to the Agent), pay to the Agent for the account of such
  Lender additional amounts sufficient to compensate such Lender for such
  increased cost. A certificate as to the amount of such increased cost,
  submitted to the Borrower and the Agent by such Lender, shall be conclusive
  and binding for all purposes, absent manifest error.

  (b) If any Lender determines
    that compliance with any law or regulation or any guideline or request from
    any central bank or other governmental authority (whether or not having the
    force of law) affects or would affect the amount of capital required or
    expected to be maintained by such Lender or any corporation controlling such
    Lender and that the amount of such capital is increased by or based upon the
    existence of such Lender's commitment to lend hereunder and other
    commitments of this type, then, upon demand by such Lender (with a copy of
    such demand to the Agent), the Borrower shall pay to the Agent for the
    account of such Lender, from time to time as specified by such Lender,
    additional amounts sufficient to compensate such Lender or such corporation
    in the light of such circumstances, to the extent that such Lender
    reasonably determines such increase in capital to be allocable to the
    existence of such Lender's commitment to lend hereunder. A certificate as to
    such amounts submitted to the Borrower and the Agent by such Lender shall be
    conclusive and binding for all purposes, absent manifest error.

  
  SECTION 2.11. Illegality.
  Notwithstanding any other provision of this Agreement, if any Lender shall
  notify the Agent that the introduction of or any change in or in the
  interpretation of any law or regulation makes it unlawful, or any central bank
  or other governmental authority asserts that it is unlawful, for any Lender or
  its Eurodollar Lending Office to perform its obligations hereunder to make
  Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances
  hereunder, (a) each Eurodollar Rate Advance will automatically, upon such
  demand, Convert into a Base Rate Advance or an Advance that bears interest at
  the rate set forth in Section 2.06(a)(i), as the case may be, and (b) the
  obligation of the Lenders to make Eurodollar Rate Advances or to Convert
  Advances into Eurodollar Rate Advances shall be suspended until the Agent
  shall notify the Borrower and the Lenders that the circumstances causing such
  suspension no longer exist.

  SECTION 2.12. Payments and
  Computations. (a) The Borrower shall make each payment hereunder and under
  the Notes, irrespective of any right of counterclaim or set-off, not later
  than 12:00 noon (New York City time) on the day when due in U.S. dollars to
  the Agent at the Agent's Account in same day funds. The Agent will promptly
  thereafter cause to be distributed like funds relating to the payment of
  principal or interest or facility fees ratably (other than amounts payable
  pursuant to Section 2.10, 2.13 or 8.04(c)) to the Lenders for the account
  of their respective Applicable Lending Offices, and like funds relating to the
  payment of any other amount payable to any Lender to such Lender for the
  account of its Applicable Lending Office, in each case to be applied in
  accordance with the terms of this Agreement. Upon any Assuming Lender becoming
  a Lender hereunder as a result of a Commitment Increase pursuant to Section
  2.16 or an extension of the Termination Date pursuant to Section 2.17, and
  upon the Agent's receipt of such Lender's Assumption Agreement and recording
  of the information contained therein in the Register, from and after the
  applicable Increase Date or Extension Date, as the case may be, the Agent
  shall make all payments hereunder and under the Notes issued in connection
  therewith in respect of the interest assumed thereby to the Assuming Lender.
  Upon its acceptance of an Assignment and Acceptance and recording of the
  information contained therein in the Register pursuant to
  Section 8.07(c), from and after the effective date specified in such
  Assignment and Acceptance, the Agent shall make all payments hereunder and
  under the Notes in respect of the interest assigned thereby to the Lender
  assignee thereunder, and the parties to such Assignment and Acceptance shall
  make all appropriate adjustments in such payments for periods prior to such
  effective date directly between themselves.

  (b) The Borrower hereby
    authorizes each Lender, if and to the extent payment owed to such Lender is
    not made when due hereunder or under the Note held by such Lender, to charge
    from time to time against any or all of the Borrower's accounts with such
    Lender any amount so due.

    (c) All computations of
    interest based on the Base Rate shall be made by the Agent on the basis of a
    year of 365 or 366 days, as the case may be, and all computations of
    interest based on the Eurodollar Rate or the Federal Funds Rate and of
    facility fees shall be made by the Agent on the basis of a year of 360 days,
    in each case for the actual number of days (including the first day but
    excluding the last day) occurring in the period for which such interest or
    facility fees are payable. Each determination by the Agent of an interest
    rate hereunder shall be conclusive and binding for all purposes, absent
    manifest error.

    (d) Whenever any payment
    hereunder or under the Notes shall be stated to be due on a day other than a
    Business Day, such payment shall be made on the next succeeding Business
    Day, and such extension of time shall in such case be included in the
    computation of payment of interest or facility fee, as the case may be; provided,
    however, that, if such extension would cause payment of interest on
    or principal of Eurodollar Rate Advances to be made in the next following
    calendar month, such payment shall be made on the next preceding Business
    Day.

    (e) Unless the Agent shall
    have received notice from the Borrower prior to the date on which any
    payment is due to the Lenders hereunder that the Borrower will not make such
    payment in full, the Agent may assume that the Borrower has made such
    payment in full to the Agent on such date and the Agent may, in reliance
    upon such assumption, cause to be distributed to each Lender on such due
    date an amount equal to the amount then due such Lender. If and to the
    extent the Borrower shall not have so made such payment in full to the
    Agent, each Lender shall repay to the Agent forthwith on demand such amount
    distributed to such Lender together with interest thereon, for each day from
    the date such amount is distributed to such Lender until the date such
    Lender repays such amount to the Agent, at the Federal Funds Rate.

  
  SECTION 2.13. Taxes.
  (a) Any and all payments by the Borrower to or for the account of any Lender
  or the Agent hereunder or under the Notes or any other documents to be
  delivered hereunder shall be made, in accordance with Section 2.12 or the
  applicable provisions of such other documents, free and clear of and without
  deduction for any and all present or future withholding taxes, including
  levies, imposts, deductions, charges or withholdings, and all liabilities with
  respect thereto, excluding, in the case of each Lender and the Agent,
  taxes imposed on its overall net income, and franchise taxes imposed on it in
  lieu of net income taxes, by the jurisdiction under the laws of which such
  Lender or the Agent (as the case may be) is organized or any political
  subdivision thereof and, in the case of each Lender, taxes imposed on its
  overall net income, and franchise taxes imposed on it in lieu of net income
  taxes, by the jurisdiction of such Lender's Applicable Lending Office or any
  political subdivision thereof (all such non-excluded taxes, levies, imposts,
  deductions, charges, withholdings and liabilities in respect of payments
  hereunder or under the Notes being hereinafter referred to as "Taxes").
  If the Borrower shall be required by law to deduct any Taxes from or in
  respect of any sum payable hereunder or under any Note or any other documents
  to be delivered hereunder to any Lender or the Agent, (i) the sum payable
  shall be increased as may be necessary so that after making all required
  deductions (including deductions applicable to additional sums payable under
  this Section 2.13) such Lender or the Agent (as the case may be) receives
  an amount equal to the sum it would have received had no such deductions been
  made, (ii) the Borrower shall make such deductions and (iii) the
  Borrower shall pay the full amount deducted to the relevant taxation authority
  or other authority in accordance with applicable law.

  (b) In addition, the
    Borrower shall pay any present or future stamp or documentary taxes or any
    other excise or property taxes, charges or similar levies that arise from
    any payment made hereunder or under the Notes or from the execution,
    delivery or registration of, performing under, or otherwise with respect to,
    this Agreement or the Notes or any other documents to be delivered
    hereunder, but excluding all other United States federal taxes other than
    withholding taxes (hereinafter referred to as "Other Taxes").

    (c) The Borrower shall
    indemnify each Lender and the Agent for and hold it harmless against the
    full amount of Taxes or Other Taxes (including, without limitation, taxes of
    any kind imposed or asserted by any jurisdiction on amounts payable under
    this Section 2.13) imposed on or paid by such Lender or the Agent (as
    the case may be) and any liability (including penalties, interest and
    expenses) arising therefrom or with respect thereto. This indemnification
    shall be made within 30 days from the date such Lender or the Agent (as the
    case may be) makes written demand therefor.

    (d) Within 30 days after the
    date of any payment of Taxes, the Borrower shall furnish to the Agent, at
    its address referred to in Section 8.02, the original or a certified
    copy of a receipt evidencing such payment to the extent such a receipt is
    issued therefor, or other written proof of payment thereof that is
    reasonably satisfactory to the Agent. In the case of any payment hereunder
    or under the Notes or any other documents to be delivered hereunder by or on
    behalf of the Borrower through an account or branch outside the United
    States or by or on behalf of the Borrower by a payor that is not a United
    States person, if the Borrower determines that no Taxes are payable in
    respect thereof, the Borrower shall furnish, or shall cause such payor to
    furnish, to the Agent, at such address, an opinion of counsel acceptable to
    the Agent stating that such payment is exempt from Taxes. For purposes of
    this subsection (d) and subsection (e), the terms "United States"
    and "United States person" shall have the meanings
    specified in Section 7701 of the Internal Revenue Code.

    (e) Each Lender organized
    under the laws of a jurisdiction outside the United States, on or prior to
    the date of its execution and delivery of this Agreement in the case of each
    Initial Lender and on the date of the Assumption Agreement or the Assignment
    and Acceptance pursuant to which it becomes a Lender in the case of each
    other Lender, and from time to time thereafter as reasonably requested in
    writing by the Borrower (but only so long as such Lender remains lawfully
    able to do so), shall provide each of the Agent and the Borrower with two
    original Internal Revenue Service forms W-8BEN or W-8ECI, as
    appropriate, or any successor or other form prescribed by the Internal
    Revenue Service, certifying that such Lender is exempt from or entitled to a
    reduced rate of United States withholding tax on payments pursuant to this
    Agreement or the Notes. If the form provided by a Lender at the time such
    Lender first becomes a party to this Agreement indicates a United States
    interest withholding tax rate in excess of zero, withholding tax at such
    rate shall be considered excluded from Taxes unless and until such Lender
    provides the appropriate forms certifying that a lesser rate applies,
    whereupon withholding tax at such lesser rate only shall be considered
    excluded from Taxes for periods governed by such form; provided, however,
    that, if at the date of the Assignment and Acceptance pursuant to which a
    Lender assignee becomes a party to this Agreement, the Lender assignor was
    entitled to payments under subsection (a) in respect of United States
    withholding tax with respect to interest paid at such date, then, to such
    extent, the term Taxes shall include (in addition to withholding taxes that
    may be imposed in the future or other amounts otherwise includable in Taxes)
    United States withholding tax, if any, applicable with respect to the Lender
    assignee on such date. If any form or document referred to in this
    subsection (e) requires the disclosure of information, other than
    information necessary to compute the tax payable and information required on
    the date hereof by Internal Revenue Service form W-8BEN or W-8ECI, that
    the Lender reasonably considers to be confidential, the Lender shall give
    notice thereof to the Borrower and shall not be obligated to include in such
    form or document such confidential information.

    (f) For any period with
    respect to which a Lender has failed to provide the Borrower with the
    appropriate form, certificate or other document described in
    Section 2.13(e) (other than if such failure is due to a
    change in law, or in the interpretation or application thereof, occurring
    subsequent to the date on which a form, certificate or other document
    originally was required to be provided, or if such form, certificate or
    other document otherwise is not required under subsection (e) above),
    such Lender shall not be entitled to indemnification under
    Section 2.13(a) or (c) with respect to Taxes imposed by the United
    States by reason of such failure; provided, however, that
    should a Lender become subject to Taxes because of its failure to deliver a
    form, certificate or other document required hereunder, the Borrower shall
    take such steps as the Lender shall reasonably request to assist the Lender
    to recover such Taxes.

    (g) Any Lender claiming any
    additional amounts payable pursuant to this Section 2.13 agrees to use
    reasonable efforts (consistent with its internal policy and legal and
    regulatory restrictions) to change the jurisdiction of its Eurodollar
    Lending Office if the making of such a change would avoid the need for, or
    reduce the amount of, any such additional amounts that may thereafter accrue
    and would not, in the reasonable judgment of such Lender, be otherwise
    disadvantageous to such Lender.

  
  SECTION 2.14. Sharing of
  Payments, Etc. If any Lender shall obtain any payment (whether voluntary,
  involuntary, through the exercise of any right of set-off, or otherwise) on
  account of the Advances owing to it (other than pursuant to Section 2.10,
  2.13 or 8.04(c)) in excess of its ratable share of payments on account of the
  Advances obtained by all the Lenders, such Lender shall forthwith purchase
  from the other Lenders such participations in the Advances owing to them as
  shall be necessary to cause such purchasing Lender to share the excess payment
  ratably with each of them; provided, however, that if all or any
  portion of such excess payment is thereafter recovered from such purchasing
  Lender, such purchase from each Lender shall be rescinded and such Lender
  shall repay to the purchasing Lender the purchase price to the extent of such
  recovery together with an amount equal to such Lender's ratable share
  (according to the proportion of (i) the amount of such Lender's required
  repayment to (ii) the total amount so recovered from the purchasing
  Lender) of any interest or other amount paid or payable by the purchasing
  Lender in respect of the total amount so recovered. The Borrower agrees that
  any Lender so purchasing a participation from another Lender pursuant to this
  Section 2.14 may, to the fullest extent permitted by law, exercise all
  its rights of payment (including the right of set-off) with respect to such
  participation as fully as if such Lender were the direct creditor of the
  Borrower in the amount of such participation.

  SECTION 2.15. Use of
  Proceeds. The proceeds of the Advances shall be available (and the
  Borrower agrees that it shall use such proceeds) solely for general corporate
  purposes of the Borrower and its Subsidiaries.

  SECTION 2.16. Increase in
  the Aggregate Commitments. (a) The Borrower may, at any time but in any
  event not more than once in any calendar quarter prior to the Termination
  Date, by notice to the Agent, request that the aggregate amount of the
  Commitment be increased by integral multiples of $25,000,000 (each a "Commitment
  Increase") to be effective as of a date that is at least 30 days
  prior to the scheduled Termination Date then in effect (the "Increase
  Date") as specified in the related notice to the Agent; provided,
  however that (i) in no event shall the aggregate amount of the
  Commitments at any time exceed $4,500,000,000 and (ii) on the date of any
  request by the Borrower for a Commitment Increase and on the related Increase
  Date, no Default shall have occurred and be continuing.

  (b) The Agent shall promptly
    notify such Eligible Assignees (which may include Lenders) as shall be
    identified by the Borrower of a request by the Borrower for a Commitment
    Increase, which notice shall include (i) the proposed amount of such
    requested Commitment Increase, (ii) the proposed Increase Date and (iii) the
    date by which such Eligible Assignees wishing to participate in the
    Commitment Increase must commit to such increase in the Commitments (the
    "Commitment Date"). To the extent oversubscribed, the
    requested Commitment Increase shall be allocated among the Eligible
    Assignees willing to participate therein in such amounts as are reasonably
    agreed between the Borrower and the Agent.

    (c) Promptly following each
    Commitment Date, the Agent shall notify the Borrower as to the amount, if
    any, by which Eligible Assignees are willing to participate in the requested
    Commitment Increase; provided, however, that, after giving
    effect to the Commitment Increase, the Commitment of each such Eligible
    Assignee shall be in an amount of not less than $25,000,000.

    (d) On each Increase Date,
    each Eligible Assignee that is not prior to such date a Lender hereunder and
    accepts an offer to participate in a requested Commitment Increase in
    accordance with Section 2.16(b) (each such Eligible Assignee and each
    Eligible Assignee that agrees to an extension of the Termination Date in
    accordance with Section 2.17(c), an "Assuming Lender")
    shall become a Lender party to this Agreement as of such Increase Date and
    the Commitment of each Eligible Assignee that prior to such date is a Lender
    and accepts an offer to participate in a requested Commitment Increase (an
    "Increasing Lender") shall be so increased (or established)
    by such amount (or by the amount allocated to such Lender pursuant to the
    last sentence of Section 2.16(b)) as of such Increase Date; provided,
    however, that the Agent shall have received on or before such
    Increase Date the following, each dated such date:

    (i) (A) certified copies
      of resolutions of the Board of Directors of the Borrower or the Executive
      Committee of such Board approving the Commitment Increase and the
      corresponding modifications to this Agreement and (B) an opinion of
      counsel for the Borrower (which may be in-house counsel), in substantially
      the form of Exhibit D hereto;

      (ii) an assumption
      agreement from each Assuming Lender, if any, in form and substance
      satisfactory to the Borrower and the Agent (each an "Assumption
      Agreement"), duly executed by such Eligible Assignee, the Agent
      and the Borrower; and

      (iii) confirmation from
      each Increasing Lender of the increase in the amount of its Commitment in
      a writing satisfactory to the Borrower and the Agent.

    
  
  On each Increase Date, upon
  fulfillment of the conditions set forth in the immediately preceding sentence
  of this Section 2.16(d), the Agent shall notify the Lenders (including,
  without limitation, each Assuming Lender) and the Borrower, on or before 1:00
  P.M. (New York City time), by telecopier or telex, of the occurrence of the
  Commitment Increase to be effected on such Increase Date and shall record in
  the Register the relevant information with respect to each Increasing Lender
  and each Assuming Lender on such date.

  SECTION 2.17. Extension of
  Termination Date. (a) At least 45 days but not more than 60 days prior to
  the Termination Date, the Borrower, by written notice to the Agent, may
  request an extension of the Termination Date in effect at such time by 364
  days from its then scheduled expiration; provided, however, that
  the Borrower shall not have made the Term Loan Election for Advances
  outstanding on such Termination Date prior to such time. The Agent shall
  promptly notify each Lender of such request, and each Lender shall in turn, in
  its sole discretion, not later than 20 days prior to the Termination Date,
  notify the Borrower and the Agent in writing as to whether such Lender will
  consent to such extension. If any Lender shall fail to notify the Agent and
  the Borrower in writing of its consent to any such request for extension of
  the Termination Date at least 20 days prior to the Termination Date, such
  Lender shall be deemed to be a Non-Consenting Lender with respect to such
  request. The Agent shall notify the Borrower not later than 15 days prior to
  the Termination Date of the decision of the Lenders regarding the Borrower's
  request for an extension of the Termination Date.

  (b) If all the Lenders
    consent in writing to any such request in accordance with subsection (a) of
    this Section 2.17, the Termination Date in effect at such time shall,
    effective as at the Termination Date (the "Extension Date"),
    be extended for 364 days; provided that on each Extension Date the
    applicable conditions set forth in Article III shall be satisfied. If less
    than all of the Lenders consent in writing to any such request in accordance
    with subsection (a) of this Section 2.17, the Termination Date in effect at
    such time shall, effective as at the applicable Extension Date and subject
    to subsection (d) of this Section 2.17, be extended as to those Lenders that
    so consented (each a "Consenting Lender") but shall not be
    extended as to any other Lender (each a "Non-Consenting Lender").
    To the extent that the Termination Date is not extended as to any Lender
    pursuant to this Section 2.17 and the Commitment of such Lender is not
    assumed in accordance with subsection (c) of this Section 2.17 on or prior
    to the applicable Extension Date, the Commitment of such Non-Consenting
    Lender shall automatically terminate in whole on such unextended Termination
    Date without any further notice or other action by the Borrower, such Lender
    or any other Person; provided that such Non-Consenting Lender's
    rights under Sections 2.10, 2.13 and 8.04, and its obligations under Section
    7.05, shall survive the Termination Date for such Lender as to matters
    occurring prior to such date. It is understood and agreed that no Lender
    shall have any obligation whatsoever to agree to any request made by the
    Borrower for any requested extension of the Termination Date.

    (c) If less than all of the
    Lenders consent to any such request pursuant to subsection (a) of this
    Section 2.17, the Agent shall promptly so notify the Consenting Lenders, and
    each Consenting Lender may, in its sole discretion, give written notice to
    the Agent not later than 10 days prior to the Termination Date of the amount
    of the Non-Consenting Lenders' Commitments for which it is willing to accept
    an assignment. If the Consenting Lenders notify the Agent that they are
    willing to accept assignments of Commitments in an aggregate amount that
    exceeds the amount of the Commitments of the Non-Consenting Lenders, such
    Commitments shall be allocated among the Consenting Lenders willing to
    accept such assignments in such amounts as are agreed between the Borrower
    and the Agent. If after giving effect to the assignments of Commitments
    described above there remains any Commitments of Non-Consenting Lenders, the
    Borrower may arrange for one or more Consenting Lenders or other Eligible
    Assignees as Assuming Lenders to assume, effective as of the Extension Date,
    any Non-Consenting Lender's Commitment and all of the obligations of such
    Non-Consenting Lender under this Agreement thereafter arising, without
    recourse to or warranty by, or expense to, such Non-Consenting Lender; provided,
    however, that the amount of the Commitment of any such Assuming
    Lender as a result of such substitution shall in no event be less than
    $25,00,000 unless the amount of the Commitment of such Non-Consenting Lender
    is less than $25,000,000, in which case such Assuming Lender shall assume
    all of such lesser amount; and provided further that:

    (i) any such Consenting
      Lender or Assuming Lender shall have paid to such Non-Consenting Lender
      (A) the aggregate principal amount of, and any interest accrued and unpaid
      to the effective date of the assignment on, the outstanding Advances, if
      any, of such Non-Consenting Lender plus (B) any accrued but unpaid
      facility fees owing to such Non-Consenting Lender as of the effective date
      of such assignment;

      (ii) all additional costs
      reimbursements, expense reimbursements and indemnities payable to such
      Non-Consenting Lender, and all other accrued and unpaid amounts owing to
      such Non-Consenting Lender hereunder, as of the effective date of such
      assignment shall have been paid to such Non-Consenting Lender; and

      (iii) with respect to any
      such Assuming Lender, the applicable processing and recordation fee
      required under Section 8.07(a) for such assignment shall have been paid;

    
    
    provided
    further that such Non-Consenting Lender's rights under Sections 2.10,
    2.13 and 8.04, and its obligations under Section 7.05, shall survive such
    substitution as to matters occurring prior to the date of substitution. At
    least three Business Days prior to any Extension Date, (A) each such
    Assuming Lender, if any, shall have delivered to the Borrower and the Agent
    an Assumption Agreement, duly executed by such Assuming Lender, such
    Non-Consenting Lender, the Borrower and the Agent, (B) any such Consenting
    Lender shall have delivered confirmation in writing satisfactory to the
    Borrower and the Agent as to the increase in the amount of its Commitment
    and (C) each Non-Consenting Lender being replaced pursuant to this Section
    2.17 shall have delivered to the Agent the Note held by such Non-Consenting
    Lender. Upon the payment or prepayment of all amounts referred to in clauses
    (i), (ii) and (iii) of the immediately preceding sentence, each such
    Consenting Lender or Assuming Lender, as of the Extension Date, will be
    substituted for such Non-Consenting Lender under this Agreement and shall be
    a Lender for all purposes of this Agreement, without any further
    acknowledgment by or the consent of the other Lenders, and the obligations
    of each such Non-Consenting Lender hereunder shall, by the provisions
    hereof, be released and discharged.

    (d) If (after giving effect
    to any assignments or assumptions pursuant to subsection (c) of this Section
    2.17) Lenders having Commitments equal to at least 50% of the Commitments in
    effect immediately prior to the Extension Date consent in writing to a
    requested extension (whether by execution or delivery of an Assumption
    Agreement or otherwise) not later than one Business Day prior to such
    Extension Date, the Agent shall so notify the Borrower, and, subject to the
    satisfaction of the applicable conditions in Article III, the Termination
    Date then in effect shall be extended for the additional 364-day period as
    described in subsection (a) of this Section 2.17, and all references in this
    Agreement and in the Notes to the "Termination Date" shall,
    with respect to each Consenting Lender and each Assuming Lender for such
    Extension Date, refer to the Termination Date as so extended. Promptly
    following each Extension Date, the Agent shall notify the Lenders
    (including, without limitation, each Assuming Lender) of the extension of
    the scheduled Termination Date in effect immediately prior thereto and shall
    thereupon record in the Register the relevant information with respect to
    each such Consenting Lender and each such Assuming Lender.

     

  
  ARTICLE III

  CONDITIONS TO EFFECTIVENESS AND
  LENDING

  SECTION 3.01. Conditions
  Precedent to Effectiveness of Section 2.01. Section 2.01 of this
  Agreement shall become effective on and as of the first date (the "Effective
  Date") on which the following conditions precedent have been
  satisfied:

  (a) There shall have
    occurred no Material Adverse Change since December 29, 2001, except as
    reported in filings made with the Securities and Exchange Commission prior
    to the date hereof.

    (b) There shall exist no
    action, suit, investigation, litigation or proceeding affecting the Borrower
    or any of its Subsidiaries pending or threatened before any court,
    governmental agency or arbitrator that (i) could be reasonably likely
    to have a Material Adverse Effect other than the matters described on
    Schedule 3.01(b) hereto (the "Disclosed Litigation")
    or (ii) purports to affect the legality, validity or enforceability of
    this Agreement or any Note or the consummation of the transactions
    contemplated hereby, and there shall have been no adverse change in the
    status, or financial effect on the Borrower or any of its Subsidiaries, of
    the Disclosed Litigation from that described on Schedule 3.01(b)
    hereto.

    (c) Nothing shall have come
    to the attention of the Lenders during the course of their due diligence
    investigation to lead them to believe that the Information Memorandum was or
    has become misleading, incorrect or incomplete in any material respect;
    without limiting the generality of the foregoing, the Lenders shall have
    been given such access to the management, records, books of account,
    contracts and properties of the Borrower and its Subsidiaries as they shall
    have requested.

    (d) All governmental and
    third party consents and approvals necessary in connection with the
    transactions contemplated hereby shall have been obtained (without the
    imposition of any conditions that are not acceptable to the Lenders) and
    shall remain in effect, and no law or regulation shall be applicable in the
    reasonable judgment of the Lenders that restrains, prevents or imposes
    materially adverse conditions upon the transactions contemplated hereby.

    (e) The Borrower shall have
    notified each Lender and the Agent in writing as to the proposed Effective
    Date.

    (f) The Borrower shall have
    paid all accrued fees and expenses of the Agent and the Lenders (including
    the accrued fees and expenses of counsel to the Agent).

    (g) On the Effective Date,
    the following statements shall be true and the Agent shall have received for
    the account of each Lender a certificate signed by a duly authorized officer
    of the Borrower, dated the Effective Date, stating that:

    (i) The representations
      and warranties contained in Section 4.01 are correct on and as of the
      Effective Date, and

      (ii) No event has occurred
      and is continuing that constitutes a Default.

    
    (h) The Agent shall have
    received on or before the Effective Date the following, each dated such day,
    in form and substance satisfactory to the Agent and (except for the Notes)
    in sufficient copies for each Lender:

    (i) The Notes to the order
      of the Lenders, respectively.

      (ii) Certified copies of
      the resolutions of the Board of Directors of the Borrower approving this
      Agreement and the Notes, and of all documents evidencing other necessary
      corporate action and governmental approvals, if any, with respect to this
      Agreement and the Notes.

      (iii) A certificate of the
      Secretary or an Assistant Secretary of the Borrower certifying the names
      and true signatures of the officers of the Borrower authorized to sign
      this Agreement and the Notes and the other documents to be delivered
      hereunder.

      (iv) Certified copies of
      the duly executed Sears Letter Agreement and the duly executed Credit
      Agreement Support Letter, together with an opinion of counsel to Sears
      (which may be in-house counsel) to the effect that, as of the date hereof,
      the Sears Letter Agreement, the Credit Agreement Support Letter and the
      Demand Notes are the legal, valid and enforceable obligation of Sears,
      enforceable against Sears in accordance with their terms.

      (v) A favorable opinion of
      in-house counsel to Sears and of Katten Muchin Zavis Rosenman, counsel for
      the Borrower, substantially in the form of Exhibit D-1 and D-2
      hereto, respectively, and as to such other matters as any Lender through
      the Agent may reasonably request.

      (vi) A favorable opinion
      of Shearman & Sterling, counsel for the Agent, in form and substance
      satisfactory to the Agent.

    
    (i) The Borrower shall have
    terminated the commitments and paid in full all of the Debt, interest, fees
    and other amounts outstanding under the Amended and Restated Credit
    Agreement dated as of April 28, 1997, as amended and restated on April 23,
    1998, among the Borrower, the lenders parties thereto and Morgan Guaranty
    Trust Company of New York, as administrative agent. By execution of this
    Agreement, each of the Lenders that is a lender under such credit agreement
    hereby waives any requirement set forth in such credit agreement of prior
    notice of the termination of the commitments thereunder.

  
  SECTION 3.02. Conditions
  Precedent to Each Borrowing and Extension Date. The obligation of each
  Lender to make an Advance on the occasion of each Borrowing and each extension
  of Commitments pursuant to Section 2.17 shall be subject to the conditions
  precedent that the Effective Date shall have occurred and on the date of such
  Borrowing or the applicable Extension Date (a) the following statements
  shall be true (and each of the giving of the applicable Notice of Borrowing,
  request for Commitment Extension and the acceptance by the Borrower of the
  proceeds of such Borrowing shall constitute a representation and warranty by
  the Borrower that on the date of such Borrowing or such Extension Date such
  statements are true):

  (i) the representations
      and warranties contained in Section 4.01 (except, in the case of
      Borrowings, the representations set forth in the last sentence of
      subsection (e) thereof and in subsection (f)(i) thereof) are
      correct on and as of such date, before and after giving effect to such
      Borrowing or such extension and to the application of the proceeds
      therefrom, as though made on and as of such date, and

      (ii) no event has occurred
      and is continuing, or would result from such Borrowing or such extension
      or from the application of the proceeds therefrom, that constitutes a
      Default;

    
  
  and (b) with respect to
  any extension of the Commitments pursuant to Section 2.17, the Agent shall
  have received such other approvals, opinions or documents as any Lender
  through the Agent may reasonably request.

  SECTION 3.03. Determinations
  Under Section 3.01. For purposes of determining compliance with the
  conditions specified in Section 3.01, each Lender shall be deemed to have
  consented to, approved or accepted or to be satisfied with each document or
  other matter required thereunder to be consented to or approved by or
  acceptable or satisfactory to the Lenders unless an officer of the Agent
  responsible for the transactions contemplated by this Agreement shall have
  received notice from such Lender prior to the date that the Borrower, by
  notice to the Lenders, designates as the proposed Effective Date, specifying
  its objection thereto. The Agent shall promptly notify the Lenders of the
  occurrence of the Effective Date.

   

  ARTICLE IV

  REPRESENTATIONS AND WARRANTIES

  SECTION 4.01. Representations
  and Warranties of the Borrower. The Borrower represents and warrants as
  follows:

  (a) The Borrower is a
    corporation duly organized, validly existing and in good standing under the
    laws of the State of Delaware.

    (b) The execution, delivery
    and performance by the Borrower of this Agreement and the Notes, and the
    consummation of the transactions contemplated hereby, are within the
    Borrower's corporate powers, have been duly authorized by all necessary
    corporate action, and do not contravene (i) the Borrower's charter or
    by-laws or (ii) law or any contractual restriction binding on or
    affecting the Borrower.

    (c) No authorization or
    approval or other action by, and no notice to or filing with, any
    governmental authority or regulatory body or any other third party is
    required for the due execution, delivery and performance by the Borrower of
    this Agreement or the Notes.

    (d) This Agreement has been,
    and each of the Notes when delivered hereunder will have been, duly executed
    and delivered by the Borrower. This Agreement is, and each of the Notes when
    delivered hereunder will be, the legal, valid and binding obligation of the
    Borrower enforceable against the Borrower in accordance with their
    respective terms.

    (e) The Consolidated balance
    sheet of the Borrower and its Subsidiaries as at December 29, 2001, and
    the related Consolidated statements of income and cash flows of the Borrower
    and its Subsidiaries for the fiscal year then ended, accompanied by an
    opinion of Deloitte & Touche LLP, independent public accountants, and
    the Consolidated balance sheet of the Borrower and its Subsidiaries as at
    September 28, 2002, and the related Consolidated statements of income and
    cash flows of the Borrower and its Subsidiaries for the nine months then
    ended, duly certified by the chief financial officer of the Borrower, copies
    of which have been furnished to each Lender, fairly present, subject, in the
    case of said balance sheet as at September 28, 2002, and said statements of
    income and cash flows for the nine months then ended, to year-end audit
    adjustments, the Consolidated financial condition of the Borrower and its
    Subsidiaries as at such dates and the Consolidated results of the operations
    of the Borrower and its Subsidiaries for the periods ended on such dates,
    all in accordance with GAAP consistently applied. Since December 29,
    2001, there has been no Material Adverse Change except as reported in
    filings made with the Securities and Exchange Commission prior to the date
    hereof.

    (f) There is no pending or
    threatened action, suit, investigation, litigation or proceeding, including,
    without limitation, any Environmental Action, affecting the Borrower or any
    of its Subsidiaries before any court, governmental agency or arbitrator that
    (i) could be reasonably likely to have a Material Adverse Effect (other
    than the Disclosed Litigation) or (ii) purports to affect the legality,
    validity or enforceability of this Agreement or any Note or the consummation
    of the transactions contemplated hereby, and there has been no adverse
    change in the status, or financial effect on the Borrower or any of its
    Subsidiaries, of the Disclosed Litigation from that described on
    Schedule 3.01(b) hereto.

    (g) The Borrower is not
    engaged in the business of extending credit for the purpose of purchasing or
    carrying margin stock (within the meaning of Regulation U issued by the
    Board of Governors of the Federal Reserve System), and no proceeds of any
    Advance will be used to purchase or carry any margin stock or to extend
    credit to others for the purpose of purchasing or carrying any margin stock.

    (h) The Borrower is not an
    "investment company", or a company "controlled" by an
    "investment company", within the meaning of the Investment Company
    Act of 1940, as amended.

    (i) All United States
    Federal income tax returns and all other material tax returns which are
    required to be filed have been filed by or on behalf of the Borrower and its
    Subsidiaries and all taxes due with respect to the Borrower and its
    Subsidiaries pursuant to such returns or pursuant to any assessment received
    by the Borrower or any Subsidiary have been paid. The charges, accruals and
    reserves on the books of the Borrower and its Subsidiaries in respect of
    taxes or other governmental charges are, in the opinion of the Borrower,
    adequate.

    (j) All written factual
    information heretofore furnished by the Borrower to the Agent or any Lender
    for purposes of or in connection with this Agreement was true and correct in
    all material respects on the date as of which such information was stated or
    certified, provided that the Borrower makes no representations or
    warranties with respect to any projections or other non-factual information
    contained in such information.

     

  
  ARTICLE V

  COVENANTS OF THE BORROWER

  SECTION 5.01. Affirmative
  Covenants. So long as any Advance shall remain unpaid or any Lender shall
  have any Commitment hereunder, the Borrower will:

  (a) Compliance with Laws,
    Etc. Comply, and cause each of its Subsidiaries to comply, in all
    material respects, with all applicable laws, rules, regulations and orders,
    such compliance to include, without limitation, compliance with ERISA and
    Environmental Laws.

    (b) Payment of Taxes, Etc.
    Pay and discharge, and cause each of its Subsidiaries to pay and discharge,
    before the same shall become delinquent, (i) all taxes, assessments and
    governmental charges or levies imposed upon it or upon its property and
    (ii) all lawful claims that, if unpaid, might by law become a Lien upon
    its property; provided, however, that neither the Borrower nor
    any of its Subsidiaries shall be required to pay or discharge any such tax,
    assessment, charge or claim that is being contested in good faith and by
    proper proceedings and as to which appropriate reserves are being
    maintained, unless and until any Lien resulting therefrom attaches to its
    property and becomes enforceable against its other creditors.

    (c) Maintenance of
    Insurance. Maintain, and cause each of its Subsidiaries to maintain,
    insurance with responsible and reputable insurance companies or associations
    in such amounts and covering such risks as is consistent with prudent
    business practice; provided, however, that the Borrower and
    its Subsidiaries may self insure to the extent consistent with prudent
    business practice.

    (d) Preservation of
    Corporate Existence, Etc. Preserve and maintain, and cause each of its
    Subsidiaries to preserve and maintain, its corporate existence, rights
    (charter and statutory) and franchises; provided, however,
    that the Borrower and its Subsidiaries may consummate any merger or
    consolidation permitted under Section 5.02(b) and provided further
    that neither the Borrower nor any of its Subsidiaries shall be required to
    preserve any right or franchise if the Board of Directors of the Borrower or
    such Subsidiary shall determine that the preservation thereof is no longer
    desirable in the conduct of the business of the Borrower or such Subsidiary,
    as the case may be, and that the loss thereof is not disadvantageous in any
    material respect to the Borrower, such Subsidiary or the Lenders.

    (e) Visitation Rights.
    Subject to reasonable confidentiality limitations and requirements imposed
    by the Borrower due to competitive concerns or otherwise, at any reasonable
    time and from time to time (but no more than twice a year unless a Default
    has occurred and is continuing), permit the Agent or any of the Lenders or
    any agents or representatives thereof, at the Lenders' expense, to examine
    and make copies of and abstracts from the records and books of account of,
    and visit the properties of, the Borrower and any of its Subsidiaries, and
    to discuss the affairs, finances and accounts of the Borrower and any of its
    Subsidiaries with any of their officers or directors and with their
    independent certified public accountants.

    (f) Keeping of Books.
    Keep, and cause each of its Subsidiaries to keep, proper books of record and
    account, in which full and correct entries shall be made of all financial
    transactions and the assets and business of the Borrower and each such
    Subsidiary in accordance with GAAP in effect from time to time.

    (g) Maintenance of
    Properties, Etc. Maintain and preserve, and cause each of its
    Subsidiaries to maintain and preserve, all of its properties that are used
    or useful in the conduct of its business in good working order and
    condition, ordinary wear and tear excepted.

    (h) Transactions with
    Affiliates. Conduct, and cause each of its Subsidiaries to conduct, all
    transactions otherwise permitted under this Agreement with any of their
    Affiliates on terms that are fair and reasonable and no less favorable to
    the Borrower or such Subsidiary than it would obtain in a comparable
    arm's-length transaction with a Person not an Affiliate.

    (i) Reporting
    Requirements. Furnish to the Lenders:

    (i) as soon as available
      and in any event within 50 days after the end of each of the first three
      quarters of each fiscal year of the Borrower, the Consolidated balance
      sheet of the Borrower and its Subsidiaries as of the end of such quarter
      and Consolidated statements of income and cash flows of the Borrower and
      its Subsidiaries for the period commencing at the end of the previous
      fiscal year and ending with the end of such quarter, duly certified
      (subject to year-end audit adjustments) by an Authorized Officer of the
      Borrower as having been prepared in accordance with GAAP and certificates
      of an Authorized Officer of the Borrower as to compliance with the terms
      of this Agreement and setting forth in reasonable detail the calculations
      necessary to demonstrate compliance with Section 5.03, provided
      that in the event of any change in GAAP used in the preparation of such
      financial statements, subject to Section 1.03, the Borrower shall also
      provide, if necessary for the determination of compliance with
      Section 5.03, a statement of reconciliation conforming such financial
      statements to GAAP (the Borrower being permitted to satisfy the
      requirements of this clause (i) by delivery, in the manner provided in
      Section 8.02(b), of its quarterly report on form 10-Q (or any successor
      form), as filed with the Securities and Exchange Commission);

      (ii) as soon as available
      and in any event within 95 days after the end of each fiscal year of the
      Borrower, a copy of the annual audit report for such year for the Borrower
      and its Subsidiaries, containing the Consolidated balance sheet of the
      Borrower and its Subsidiaries as of the end of such fiscal year and
      Consolidated statements of income and cash flows of the Borrower and its
      Subsidiaries for such fiscal year, in each case accompanied by an opinion
      acceptable to the Required Lenders by Deloitte & Touche LLP or other
      independent public accountants acceptable to the Required Lenders, provided
      that in the event of any change in GAAP used in the preparation of such
      financial statements, the Borrower shall also provide, if necessary for
      the determination of compliance with Section 5.03, a statement of
      reconciliation conforming such financial statements to GAAP (the Borrower
      being permitted to satisfy the requirements of this clause (ii) by
      delivery, in the manner provided in Section 8.02(b), of its quarterly
      report on form 10-K (or any successor form), as filed with the Securities
      and Exchange Commission);

      (iii) promptly and in any
      event within five days after any officer of the Borrower knows or should
      have had knowledge of the occurrence of each Default continuing on the
      date of such statement, a statement of an Authorized Officer of the
      Borrower setting forth details of such Default and the action that the
      Borrower has taken and proposes to take with respect thereto;

      (iv) promptly after the
      sending or filing thereof, copies of all quarterly and annual reports and
      proxy solicitations that the Borrower sends to its public securityholders
      generally, and copies of all reports on form 8-K (or its equivalent) and
      registration statements for the public offering (other than pursuant to
      employee Plans) of securities that the Borrower or any Subsidiary files
      with the Securities and Exchange Commission or any national securities
      exchange;

      (v) promptly after the
      commencement thereof, notice of all actions and proceedings before any
      court, governmental agency or arbitrator affecting the Borrower or any of
      its Subsidiaries of the type described in Section 4.01(f);

      (vi) promptly after
      receipt thereof, copies of all reports and notices delivered to the
      Borrower by Sears pursuant to the Credit Agreement Support Letter; and

      (vii) such other
      information respecting the Borrower or any of its Subsidiaries or Sears as
      any Lender through the Agent may from time to time reasonably request.

    
  
  SECTION 5.02. Negative
  Covenants. So long as any Advance shall remain unpaid or any Lender shall
  have any Commitment hereunder, the Borrower will not:

  (a) Liens, Etc.
    Create or suffer to exist, or permit any of its Subsidiaries to create or
    suffer to exist, any Lien on or with respect to any of its properties,
    whether now owned or hereafter acquired, or assign, or permit any of its
    Subsidiaries to assign, any right to receive income, other than:

    (i) Permitted Liens,

      (ii) purchase money Liens
      upon or in any real property or equipment acquired or held by the Borrower
      or any Subsidiary in the ordinary course of business to secure the
      purchase price of such property or equipment or to secure Debt incurred
      solely for the purpose of financing the acquisition of such property or
      equipment, or Liens existing on such property or equipment at the time of
      its acquisition (other than any such Liens created in contemplation of
      such acquisition that were not incurred to finance the acquisition of such
      property) or extensions, renewals or replacements of any of the foregoing
      for the same or a lesser amount, provided, however, that no
      such Lien shall extend to or cover any properties of any character other
      than the real property or equipment being acquired, and no such extension,
      renewal or replacement shall extend to or cover any properties not
      theretofore subject to the Lien being extended, renewed or replaced, provided
      further that the aggregate principal amount of the indebtedness
      secured by the Liens referred to in this clause (ii) shall not exceed
      $25,000,000 at any time outstanding,

      (iii) the Liens existing
      on the Effective Date and described on Schedule 5.02(a) hereto,

      (iv) Liens on property of
      a Person existing at the time such Person is merged into or consolidated
      with the Borrower or any Subsidiary of the Borrower or becomes a
      Subsidiary of the Borrower; provided that such Liens were not
      created in contemplation of such merger, consolidation or acquisition and
      do not extend to any assets other than those of the Person so merged into
      or consolidated with the Borrower or such Subsidiary or acquired by the
      Borrower or such Subsidiary,

      (v) other Liens securing
      Debt in an aggregate principal amount not to exceed 5% of Consolidated
      Tangible Net Worth at any time outstanding, and

      (vi) the replacement,
      extension or renewal of any Lien permitted by clause (iii) or (iv)
      above upon or in the same property theretofore subject thereto or the
      replacement, extension or renewal (without increase in the amount or
      change in any direct or contingent obligor) of the Debt secured thereby.

    
    (b) Mergers, Etc.
    Merge or consolidate with or into, or convey, transfer, lease or otherwise
    dispose of (whether in one transaction or in a series of transactions) all
    or substantially all of its assets (whether now owned or hereafter acquired)
    to, any Person, or permit any of its Subsidiaries to do so, except that (i)
    any Subsidiary of the Borrower may merge or consolidate with or into, or
    dispose of assets to, any other Subsidiary of the Borrower, (ii) any
    Subsidiary of the Borrower may merge into or dispose of assets to the
    Borrower and (iii) the Borrower may merge or consolidate with or into, or
    dispose of assets to Sears, provided, in each case, that no Default
    shall have occurred and be continuing at the time of such proposed
    transaction or would result therefrom.

    (c) Accounting Changes.
    Make or permit, or permit any of its Subsidiaries to make or permit, any
    change in accounting policies or reporting practices, except as required or
    permitted by GAAP.

    (d) Change in Nature of
    Business. Make, or permit any of its Subsidiaries to make, any material
    change in the nature of its business as carried on at the date hereof.

    (e) Subsidiary Debt.
    Permit any of its Subsidiaries to create or suffer to exist, any Debt or
    capital stock having any preference as to dividend or upon any distribution
    of assets other than:

    (i) Debt owed to, or such
      stock issued to, the Borrower or to a wholly owned Subsidiary of the
      Borrower,

      (ii) Debt or such stock of
      a Subsidiary whose business activities are confined exclusively to raising
      capital outside the United States, financing the Borrower and its other
      Subsidiaries and other activities incidental thereto,

      (iii) Debt secured by
      Liens permitted by Section 5.02(a)(ii) or (iv), and

      (iv) other Debt or such
      stock which, in the aggregate, does not exceed at any time 5% of
      Consolidated Tangible Net Worth (with such stock taken at the higher of
      its voluntary or involuntary liquidation preference).

    
    (f) Credit Agreement
    Support Letter. Amend, waive, terminate or otherwise modify any
    provision of the Credit Agreement Support Letter, the Sears Letter Agreement
    or the Demand Notes or fail to enforce the Credit Agreement Support Letter,
    the Sears Letter Agreement or the Demand Notes against Sears in accordance
    with their respective terms; provided that the Borrower may amend the
    Sears Letter Agreement and Demand Notes to reduce the fixed charge coverage
    ratio set forth in paragraph 3 thereof to no less than 1.15.

  
  SECTION 5.03. Financial
  Covenants. So long as any Advance shall remain unpaid or any Lender shall
  have any Commitment hereunder, the Borrower will:

  (a) Fixed Charge Ratio.
    Maintain a Fixed Charge Ratio for any fiscal quarter of not less than 1.15.

    (b) Debt/Net Worth.
    Maintain, as of any date, Consolidated Debt of not more than 700% of
    Consolidated Tangible Net Worth.

    (c) Maximum Unsecured
    Debt. Maintain, as of any date, unsecured Debt of not more than (i) the
    aggregate principal amount of the Demand Notes plus (ii) cash and cash
    equivalents plus (iii) to the extent necessary to comply with the Investment
    Company Act of 1940, as amended, unencumbered accounts receivable.

  


ARTICLE VI

EVENTS OF DEFAULT

SECTION 6.01. Events of
Default. If any of the following events ("Events of Default")
shall occur and be continuing:

(a) The Borrower shall fail to
  pay any principal of any Advance when the same becomes due and payable; or the
  Borrower shall fail to pay any interest on any Advance or make any other
  payment of fees or other amounts payable under this Agreement or any Note
  within five Business Days after the same becomes due and payable; or

  (b) Any representation or
  warranty made by the Borrower herein or by the Borrower (or any of its
  officers) in connection with this Agreement shall prove to have been incorrect
  in any material respect when made; or

  (c) (i) The Borrower
  shall fail to perform or observe any term, covenant or agreement contained in
  Section 5.01(d), (e), (h) or (i), 5.02 or 5.03, or (ii) the Borrower
  shall fail to perform or observe any other term, covenant or agreement
  contained in this Agreement on its part to be performed or observed if such
  failure shall remain unremedied for 30 days after written notice thereof shall
  have been given to the Borrower by the Agent or any Lender; or

  (d) The Borrower or any of its
  Subsidiaries shall fail to pay any principal of or premium or interest on any
  Debt that is outstanding in a principal of at least $50,000,000 in the
  aggregate (but excluding Debt outstanding hereunder) of the Borrower or such
  Subsidiary (as the case may be), when the same becomes due and payable
  (whether by scheduled maturity, required prepayment, acceleration, demand or
  otherwise), and such failure shall continue after the applicable grace period,
  if any, specified in the agreement or instrument relating to such Debt or, in
  respect of amounts other than principal, three Business Days, if later; or any
  other event shall occur or condition shall exist under any agreement or
  instrument relating to any such Debt and shall continue after the applicable
  grace period, if any, specified in such agreement or instrument, if the effect
  of such event or condition is to accelerate, or to permit the acceleration of,
  the maturity of such Debt; or any such Debt shall be declared to be due and
  payable, or required to be prepaid or redeemed (other than by a regularly
  scheduled required prepayment or redemption), purchased or defeased, or an
  offer to prepay, redeem, purchase or defease such Debt shall be required to be
  made, in each case prior to the stated maturity thereof; or

  (e) Sears shall fail to pay
  any principal of or premium or interest on any Debt that is outstanding in a
  principal amount of at least $100,000,000 in the aggregate of Sears, when the
  same becomes due and payable (whether by scheduled maturity, required
  prepayment, acceleration, demand or otherwise), and such failure shall
  continue after the applicable grace period, if any, specified in the agreement
  or instrument relating to such Debt or, in respect of amounts other than
  principal, three Business Days, if later; or any other event shall occur or
  condition shall exist under any agreement or instrument relating to any such
  Debt and shall continue after the applicable grace period, if any, specified
  in such agreement or instrument, if the effect of such event or condition is
  to accelerate, or to permit the acceleration of, the maturity of such Debt; or
  any such Debt shall be declared to be due and payable, or required to be
  prepaid or redeemed (other than by a regularly scheduled required prepayment
  or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
  or defease such Debt shall be required to be made, in each case prior to the
  stated maturity thereof; or

  (f) The Borrower or any of its
  Subsidiaries or Sears shall generally not pay its debts as such debts become
  due, or shall admit in writing its inability to pay its debts generally, or
  shall make a general assignment for the benefit of creditors; or any
  proceeding shall be instituted by or against the Borrower or any of its
  Subsidiaries or Sears seeking to adjudicate it a bankrupt or insolvent, or
  seeking liquidation, winding up, reorganization, arrangement, adjustment,
  protection, relief, or composition of it or its debts under any law relating
  to bankruptcy, insolvency or reorganization or relief of debtors, or seeking
  the entry of an order for relief or the appointment of a receiver, trustee,
  custodian or other similar official for it or for any substantial part of its
  property and, in the case of any such proceeding instituted against it (but
  not instituted by it), either such proceeding shall remain undismissed or
  unstayed for a period of 90 days, or any of the actions sought in such
  proceeding (including, without limitation, the entry of an order for relief
  against, or the appointment of a receiver, trustee, custodian or other similar
  official for, it or for any substantial part of its property) shall occur; or
  the Borrower or any of its Subsidiaries or Sears shall take any corporate
  action to authorize any of the actions set forth above in this
  subsection (f); or

  (g) A judgment or order for
  the payment of money in excess of $10,000,000 shall be rendered against the
  Borrower or any of its Subsidiaries and either (i) enforcement
  proceedings shall have been commenced by any creditor upon such judgment or
  order or (ii) there shall be any period of 10 consecutive days during
  which a stay of enforcement of such judgment or order, by reason of a pending
  appeal or otherwise, shall not be in effect; or

  (h) (i) Any
  "person" or "group" (as such terms are used in Sections
  13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any
  employee benefit plan of such person or its Subsidiaries, and any Person or
  entity acting in its capacity as
  trustee, agent or other fiduciary or administrator of any such plan) becomes
  the "beneficial owner"
  (as defined in Rules 13d-3 and
  13d-5 under the Securities
  Exchange Act of 1934, except that a person or group shall
  be deemed to have "beneficial ownership" of all securities that such
  person or group has the right to acquire (such right, an "option right"),
  whether such right is exercisable immediately or only after the passage of
  time), directly or indirectly, of 35%
  or more of the equity
  securities of Sears entitled to vote for members of the
  board of directors or equivalent governing body of Sears on a fully-diluted
  basis (and taking into account
  all such securities that such person
  or group has the right to acquire pursuant to any option
  right); or (ii) during any period of 12 consecutive
  months, a majority of the members of the board of
  directors or other equivalent governing body of Sears
  cease to be composed of individuals
  (x) who were members of that board or equivalent governing body on the first
  day of such period, (y) whose election or nomination
  to that board or equivalent governing body was approved by individuals
  referred to in clause (x) above constituting at the time of such election or
  nomination at least a majority of that board or equivalent governing body or
  (z) whose election or nomination to that board or other equivalent governing
  body was approved by individuals referred to in clauses (x) and (y) above
  constituting at the time of such election or nomination at least a majority of
  that board or equivalent governing body (excluding, in
  the case of both clause (y) and clause (z), any
  individual whose initial nomination for, or assumption
  of office as, a member of that board or equivalent governing body occurs as a
  result of an actual or threatened solicitation of proxies or consents for the
  election or removal of one or more directors by any person or group other than
  a solicitation for the election of one or more directors by or on behalf of
  the board of directors); or (iii) Sears shall cease for any reason to
  own, directly or indirectly, 100% of the Voting Stock of the Borrower; or

  (i) The Borrower or any of its
  ERISA Affiliates shall incur, or shall be reasonably likely to incur liability
  in excess of $50,000,000 in the aggregate as a result of one or more of the
  following: (i) the occurrence of any ERISA Event; (ii) the partial
  or complete withdrawal of the Borrower or any of its ERISA Affiliates from a
  Multiemployer Plan; or (iii) the reorganization or termination of a
  Multiemployer Plan; or

  (j) Sears shall fail to
  perform or observe any provision of the Credit Agreement Support Letter; or

  (k) Any provision of the
  Credit Agreement Support Letter or the Demand Notes shall for any reason cease
  to be valid and binding or enforceable against Sears, or Sears shall so state
  in writing;


then, and in any such event, the
Agent (i) shall at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the obligation of each Lender to
make Advances to be terminated, whereupon the same shall forthwith terminate,
and (ii) shall at the request, or may with the consent, of the Required
Lenders, by notice to the Borrower, declare the Advances, all interest thereon
and all other amounts payable under this Agreement to be forthwith due and
payable, whereupon the Advances, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Federal Bankruptcy Code, (A) the obligation of each Lender to make Advances
shall automatically be terminated and (B) the Advances, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.

 

ARTICLE VII

THE AGENT

SECTION 7.01. Authorization
and Action. Each Lender hereby appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement (including, without
limitation, enforcement or collection of the Notes), the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes; provided,
however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to this Agreement or
applicable law. The Agent agrees to give to each Lender prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement.

SECTION 7.02. Agent's
Reliance, Etc. Neither the Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Agreement, except for its or their own
gross negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Agent: (i) may treat the Lender that made any Advance as
the holder of the Debt resulting therefrom until the Agent receives and accepts
an Assumption Agreement entered into by an Assuming Lender as provided in
Section 2.16 or 2.17, as the case may be, or an Assignment and Acceptance
entered into by such Lender, as assignor, and an Eligible Assignee,
as assignee, as provided in Section 8.07; (ii) may consult with legal
counsel (including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation
to any Lender and shall not be responsible to any Lender for any statements,
warranties or representations (whether written or oral) made in or in connection
with this Agreement; (iv) shall not have any duty to ascertain or to
inquire as to the performance, observance or satisfaction of any of the terms,
covenants or conditions of this Agreement on the part of the Borrower or the
existence at any time of any Default or to inspect the property (including the
books and records) of the Borrower; (v) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopier, telegram or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

SECTION 7.03. Citibank and
Affiliates. With respect to its Commitment, the Advances made by it and the
Note issued to it, Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Citibank in its individual capacity.
Citibank and its Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and
generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Citibank were not the Agent and
without any duty to account therefor to the Lenders. The Agent shall have no
duty to disclose information obtained or received by it or any of its Affiliates
relating to the Borrower or its Subsidiaries to the extent such information was
obtained or received in any capacity other than as Agent.

SECTION 7.04. Lender Credit
Decision. Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement.

SECTION 7.05. Indemnification.
The Lenders agree to indemnify the Agent (to the extent not reimbursed by the
Borrower), ratably according to the respective principal amounts of the Advances
then owed to each of them (or if no Advances are at the time outstanding,
ratably according to the respective amounts of their Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any action
taken or omitted by the Agent under this Agreement (collectively, the "Indemnified
Costs"), provided that no Lender shall be liable for any portion
of the Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, to the extent that the Agent is not reimbursed for such expenses
by the Borrower. In the case of any investigation, litigation or proceeding
giving rise to any Indemnified Costs, this Section 7.05 applies whether any
such investigation, litigation or proceeding is brought by the Agent, any Lender
or a third party.

SECTION 7.06. Successor Agent.
The Agent may resign at any time by giving written notice thereof to the Lenders
and the Borrower and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, or, if
a successor agent has not been appointed within 45 days after the retiring
Agent's giving of notice or resignation, then the Borrower may appoint a
successor Agent, which in any case shall be a commercial bank organized under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Agent's resignation or removal hereunder as Agent, the provisions
of this Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.

SECTION 7.07. Other Agents.
Each Lender hereby acknowledges that neither the documentation agent nor any
other Lender designated as any "Agent" on the signature pages hereof
has any liability hereunder other than in its capacity as a Lender.

 

ARTICLE VIII

MISCELLANEOUS

SECTION 8.01. Amendments, Etc.
No amendment or waiver of any provision of this Agreement, the Notes or the
Credit Agreement Support Letter, nor consent to any departure by the Borrower or
Sears therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 3.01,
(b) except as provided in Section 2.16, increase the Commitments of the
Lenders, (c) reduce the principal of, or interest on, the Advances or any
fees or other amounts payable hereunder, (d) postpone any date fixed for
any payment of principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, (e) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Advances, or the number of
Lenders, that shall be required for the Lenders or any of them to take any
action hereunder, (f) permit the release or termination of the support
obligations of Sears under the Credit Agreement Support Letter or (g) amend this
Section 8.01; and provided further that no amendment, waiver
or consent shall, unless in writing and signed by the Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Agent under this Agreement or any Note.

SECTION 8.02. Notices, Etc.
(a) All notices and other communications provided for hereunder shall be in
writing (including telecopier or telegraphic communication) and mailed,
telecopied, telegraphed or delivered, if to the Borrower, at its address at 3711
Kennett Pike, Greenville, Delaware 19807, Attention: President; if to any
Initial Lender, at its Domestic Lending Office specified opposite its name on
Schedule I hereto; if to any other Lender, at its Domestic Lending Office
specified in the Assumption Agreement or the Assignment and Acceptance pursuant
to which it became a Lender; and if to the Agent, at its address at Two Penns
Way, New Castle, Delaware 19720, Attention: Bank Loan Syndications Department;
or, as to the Borrower or the Agent, at such other address as shall be
designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Agent; provided
that notices required to be delivered pursuant to Section 5.01(i)(i), (ii) and
(iv) shall be delivered to the Agent and the Lenders as specified in Section
8.02(b). All such notices and communications shall,
when mailed, telecopied, telegraphed or emailed,
be effective when deposited in the mails, telecopied, delivered to the telegraph
company or confirmed by email,
respectively, except that notices and communications to the Agent pursuant to
Article II, III or VII shall not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this Agreement or the Notes or of any Exhibit hereto to be
executed and delivered hereunder shall be effective as delivery of a manually
executed counterpart thereof.

(b) So long as Citibank is the
  Agent, materials required to be delivered pursuant to Section 5.01(i)(i),
  (ii), (iv) and (vi) shall be delivered to the Agent in an electronic medium in
  a format acceptable to the Agent and the Lenders by email at oploanswebadmin@citigroup.com.
  The Borrower agrees that the Agent may make such materials, as well as any
  other written information, documents, instruments and other material relating
  to the Borrower, any of its Subsidiaries or any other materials or matters
  relating to this Agreement, the Notes or any of the transactions contemplated
  hereby (collectively, the "Communications") available to the
  Lenders by posting such notices on "e-Disclosure" (the "Platform"),
  the Agent's internet delivery system that is part of SSB Direct, Global Fixed
  Income's primary web portal. Although the primary web portal is secured with a
  dual firewall and a User ID/Password Authorization System and the Platform is
  secured through a single user per deal authorization method whereby each user
  may access the Platform only on a deal-by-deal basis, the Borrower
  acknowledges that (i) the distribution of material through an electronic
  medium is not necessarily secure and that there are confidentiality and other
  risks associated with such distribution, (ii) the Platform is provided
  "as is" and "as available" and (iii) neither the Agent nor
  any of its Affiliates warrants the accuracy, adequacy or completeness of the
  Communications or the Platform and each expressly disclaims liability for
  errors or omissions in the Communications or the Platform. No warranty of any
  kind, express, implied or statutory, including, without limitation, any
  warranty of merchantability, fitness for a particular purpose,
  non-infringement of third party rights or freedom from viruses or other code
  defects, is made by the Agent or any of its Affiliates in connection with the
  Platform.

  (c) Each Lender agrees that
  notice to it (as provided in the next sentence) (a "Notice")
  specifying that any Communications have been posted to the Platform shall
  constitute effective delivery of such information, documents or other
  materials to such Lender for purposes of this Agreement; provided that
  if requested by any Lender the Agent shall deliver a copy of the
  Communications to such Lender by email or telecopier. Each Lender agrees (i)
  to notify the Agent in writing of such Lender's e-mail address to which a
  Notice may be sent by electronic transmission (including by electronic
  communication) on or before the date such Lender becomes a party to this
  Agreement (and from time to time thereafter to ensure that the Agent has on
  record an effective e-mail address for such Lender) and (ii) that any Notice
  may be sent to such e-mail address.


SECTION 8.03. No Waiver;
Remedies. No failure on the part of any Lender or the Agent to exercise, and
no delay in exercising, any right hereunder or under any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

SECTION 8.04. Costs and
Expenses. (a) The Borrower agrees to pay promptly all costs and expenses of
the Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Notes and the
other documents to be delivered hereunder, including, without limitation,
(A) all due diligence, syndication (including printing, distribution and
bank meetings), transportation, computer, duplication, appraisal, consultant,
and audit expenses and (B) the reasonable fees and expenses of counsel for
the Agent with respect thereto and with respect to advising the Agent as to its
rights and responsibilities under this Agreement. The Borrower further agrees to
pay on demand all costs and expenses of the Agent and the Lenders, if any
(including, without limitation, reasonable counsel fees and expenses), in
connection with the enforcement (whether through negotiations, legal proceedings
or otherwise) of this Agreement, the Notes and the other documents to be
delivered hereunder, including, without limitation, reasonable fees and expenses
of counsel for the Agent and each Lender in connection with the enforcement of
rights under this Section 8.04(a).

(b) The Borrower agrees to
  indemnify and hold harmless the Agent and each Lender and each of their
  Affiliates and their officers, directors, employees, agents and advisors
  (each, an "Indemnified Party") from and against any and all
  claims, damages, losses, liabilities and expenses (including, without
  limitation, reasonable fees and expenses of counsel) incurred by or asserted
  or awarded against any Indemnified Party, in each case arising out of or in
  connection with or by reason of (including, without limitation, in connection
  with any investigation, litigation or proceeding or preparation of a defense
  in connection therewith) (i) the Notes, this Agreement, any of the
  transactions contemplated herein or the actual or proposed use of the proceeds
  of the Advances, (ii) the actual or alleged presence of Hazardous
  Materials on any property of the Borrower or any of its Subsidiaries or any
  Environmental Action relating in any way to the Borrower or any of its
  Subsidiaries, except to the extent such claim, damage,
  loss, liability or expense is found in a final, non-appealable judgment by a
  court of competent jurisdiction to have resulted from such Indemnified Party's
  gross negligence or willful misconduct. In the case of an investigation,
  litigation or other proceeding to which the indemnity in this Section 8.04(b)
  applies, such indemnity shall be effective whether or not such investigation,
  litigation or proceeding is brought by the Borrower, its directors,
  equityholders or creditors or an Indemnified Party or any other Person,
  whether or not any Indemnified Party is otherwise a party thereto and whether
  or not the transactions contemplated hereby are consummated. The Borrower also
  agrees not to assert any claim for special, indirect, consequential or
  punitive damages against the Agent, any Lender, any of their Affiliates, or
  any of their respective directors, officers, employees, attorneys and agents,
  on any theory of liability, arising out of or otherwise relating to the Notes,
  this Agreement, any of the transactions contemplated herein or the actual or
  proposed use of the proceeds of the Advances.

  (c) If any payment of
  principal of, or Conversion of, any Eurodollar Rate Advance is made by the
  Borrower to or for the account of a Lender other than on the last day of the
  Interest Period for such Advance, as a result of a payment or Conversion
  pursuant to Section 2.07(d) or (e), 2.09 or 2.11, acceleration of the
  maturity of the Notes pursuant to Section 6.01 or for any other reason,
  or by an Eligible Assignee to a Lender other than on the last day of the
  Interest Period for such Advance upon an assignment of rights and obligations
  under this Agreement pursuant to Section 8.07 as a result of a demand by the
  Borrower pursuant to Section 8.07(a), the Borrower shall, promptly after
  notice by such Lender setting forth in reasonable detail the calculations used
  to quantify such amount (with a copy of such notice to the Agent), pay to the
  Agent for the account of such Lender any amounts required to compensate such
  Lender for any additional losses, costs or expenses that it may reasonably
  incur as a result of such payment or Conversion, including, without
  limitation, any loss (including loss of anticipated profits), cost or expense
  incurred by reason of the liquidation or reemployment of deposits or other
  funds acquired by any Lender to fund or maintain such Advance.

  (d) Without prejudice to the
  survival of any other agreement of the Borrower hereunder, the agreements and
  obligations of the Borrower contained in Sections 2.10, 2.13 and 8.04
  shall survive the payment in full of principal, interest and all other amounts
  payable hereunder and under the Notes.


SECTION 8.05. Right of
Set-off. Upon (i) the occurrence and during the continuance of any
Event of Default and (ii) the making of the request or the granting of the
consent specified by Section 6.01 to authorize the Agent to declare the
Notes due and payable pursuant to the provisions of Section 6.01, each
Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender or such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by such Lender, whether or not such Lender shall
have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender and its Affiliates under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender and its Affiliates may have.

SECTION 8.06. Binding Effect.
This Agreement shall become effective (other than Section 2.01, which shall
only become effective upon satisfaction of the conditions precedent set forth in
Section 3.01) when it shall have been executed by the Borrower and the
Agent and when the Agent shall have been notified by each Initial Lender that
such Initial Lender has executed it and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.

SECTION 8.07. Assignments and
Participations. (a) Each Lender may, upon notice to the Borrower, and if
demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.10 or 2.13) upon at least five Business Days' notice to such
Lender and the Agent will, assign to one or more Persons all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment, the Advances owing to it and the Note or Notes
held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement, (ii) except in the case of an assignment
to a Person that, immediately prior to such assignment, was a Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the Commitment of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $10,000,000 (unless a
Default has occurred and is continuing, in which case not less than $5,000,000)
or an integral multiple of $1,000,000 in excess thereof unless the Borrower and
the Agent otherwise agree, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by the
Borrower pursuant to this Section 8.07(a) shall be arranged by the Borrower
after consultation with the Agent and shall be either an assignment of all of
the rights and obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of the
rights and obligations of the assigning Lender under this Agreement, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 8.07(a) unless and until such Lender
shall have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, and (vi) the
parties to each such assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note subject to such assignment and a processing and recordation fee of
$3,000 payable by the parties to each such assignment, provided, however,
that in the case of each assignment made as a result of a demand by the
Borrower, such recordation fee shall be payable by the Borrower except that no
such recordation fee shall be payable in the case of an assignment made at the
request of the Borrower to an Eligible Assignee that is an existing Lender, and
(vii) any Lender may, without the approval of the Borrower and the Agent, assign
all or a portion of its rights to any of its Affiliates. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (other than
its rights under Section 2.10, 2.13 and 8.04 to the extent any claim thereunder
relates to an event arising prior such assignment) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

(b) By executing and
  delivering an Assignment and Acceptance, the Lender assignor thereunder and
  the assignee thereunder confirm to and agree with each other and the other
  parties hereto as follows: (i) other than as provided in such Assignment
  and Acceptance, such assigning Lender makes no representation or warranty and
  assumes no responsibility with respect to any statements, warranties or
  representations made in or in connection with this Agreement or the execution,
  legality, validity, enforceability, genuineness, sufficiency or value of this
  Agreement or any other instrument or document furnished pursuant hereto;
  (ii) such assigning Lender makes no representation or warranty and
  assumes no responsibility with respect to the financial condition of the
  Borrower or the performance or observance by the Borrower of any of its
  obligations under this Agreement or any other instrument or document furnished
  pursuant hereto; (iii) such assignee confirms that it has received a copy
  of this Agreement, together with copies of the financial statements referred
  to in Section 4.01 and such other documents and information as it has
  deemed appropriate to make its own credit analysis and decision to enter into
  such Assignment and Acceptance; (iv) such assignee will, independently
  and without reliance upon the Agent, such assigning Lender or any other Lender
  and based on such documents and information as it shall deem appropriate at
  the time, continue to make its own credit decisions in taking or not taking
  action under this Agreement; (v) such assignee confirms that it is an
  Eligible Assignee; (vi) such assignee appoints and authorizes the Agent
  to take such action as agent on its behalf and to exercise such powers and
  discretion under this Agreement as are delegated to the Agent by the terms
  hereof, together with such powers and discretion as are reasonably incidental
  thereto; and (vii) such assignee agrees that it will perform in
  accordance with their terms all of the obligations that by the terms of this
  Agreement are required to be performed by it as a Lender.

  (c) Upon its receipt of an
  Assignment and Acceptance executed by an assigning Lender and an assignee
  representing that it is an Eligible Assignee, together with any Note or Notes
  subject to such assignment, the Agent shall, if such Assignment and Acceptance
  has been completed and is in substantially the form of Exhibit C hereto,
  (i) accept such Assignment and Acceptance, (ii) record the
  information contained therein in the Register and (iii) give prompt
  notice thereof to the Borrower.

  (d) The Agent shall
  maintain at its address referred to in Section 8.02 a copy of each
  Assumption Agreement and each Assignment and Acceptance delivered to and
  accepted by it and a register for the recordation of the names and addresses
  of the Lenders and the Commitment of, and principal amount of the Advances
  owing to, each Lender from time to time (the "Register"). The
  entries in the Register shall be conclusive and binding for all purposes,
  absent manifest error, and the Borrower, the Agent and the Lenders may treat
  each Person whose name is recorded in the Register as a Lender hereunder for
  all purposes of this Agreement. The Register shall be available for inspection
  by the Borrower or any Lender at any reasonable time and from time to time
  upon reasonable prior notice.

  (e) Each Lender may sell
  participations to one or more banks or other entities (other than the Borrower
  or any of its Affiliates) in or to all or a portion of its rights and
  obligations under this Agreement (including, without limitation, all or a
  portion of its Commitment, the Advances owing to it and the Note or Notes held
  by it); provided, however, that (i) such Lender's
  obligations under this Agreement (including, without limitation, its
  Commitment to the Borrower hereunder) shall remain unchanged, (ii) such
  Lender shall remain solely responsible to the other parties hereto for the
  performance of such obligations, (iii) such Lender shall remain the
  holder of any such Note for all purposes of this Agreement, (iv) the
  Borrower, the Agent and the other Lenders shall continue to deal solely and
  directly with such Lender in connection with such Lender's rights and
  obligations under this Agreement and (v) no participant under any such
  participation shall have any right to approve any amendment or waiver of any
  provision of this Agreement or any Note, or any consent to any departure by
  the Borrower therefrom, except to the extent that such amendment, waiver or
  consent would reduce the principal of, or interest on, the Notes or any fees
  or other amounts payable hereunder, in each case to the extent subject to such
  participation, or postpone any date fixed for any payment of principal of, or
  interest on, the Notes or any fees or other amounts payable hereunder, in each
  case to the extent subject to such participation.

  (f) Any Lender may, in
  connection with any assignment or participation or proposed assignment or
  participation pursuant to this Section 8.07, disclose to the assignee or
  participant or proposed assignee or participant, any information relating to
  the Borrower furnished to such Lender by or on behalf of the Borrower; provided
  that, prior to any such disclosure, the assignee or participant or proposed
  assignee or participant shall agree to preserve the confidentiality of any
  Borrower Information relating to the Borrower received by it from such Lender
  in accordance with Section 8.08(b).

  (g) Notwithstanding any other
  provision set forth in this Agreement, any Lender may at any time create a
  security interest in all or any portion of its rights under this Agreement
  (including, without limitation, the Advances owing to it and the Note) in
  favor of any Federal Reserve Bank in accordance with Regulation A of the Board
  of Governors of the Federal Reserve System.


SECTION 8.08. Confidentiality.
(a) The Borrower, the Lenders and the Agent hereby agree that each of the
Borrower, the Lenders and the Agent (and each of their respective, and their
respective affiliates', employees, officers, directors, agents and advisors) is,
and has been from the commencement of discussions with respect to the facility
established by this Agreement (the "Facility"), permitted to
disclose to any and all Persons, without limitation of any kind, the structure
and tax aspects (as such terms are used in Internal Revenue Code Sections 6011,
6111 and 6112 and the regulations promulgated thereunder) of the Facility, and
all materials of any kind (including opinions or other tax analyses) that are or
have been provided to the Borrower, such Lender or the Agent related to such
structure and tax aspects. In this regard, each of the Borrower, the Lenders and
the Agent acknowledges and agrees that its disclosure of the structure or tax
aspects of the Facility is not limited in any way by an express or implied
understanding or agreement, oral or written (whether or not such understanding
or agreement is legally binding). Furthermore, each of the Borrower, the Lenders
and the Agent acknowledges and agrees that it does not know or have reason to
know that its use or disclosure of information relating to the structure or tax
aspects of the Facility is limited in any other manner (such as where the
Facility is claimed to be proprietary or exclusive) for the benefit of any other
Person. To the extent that disclosure of the structure or tax aspects of the
Facility by the Borrower, the Agent or the Lenders is limited by any existing
agreement between the Borrower and the Agent or the Lenders, such limitation is
agreed to be void ab initio and such agreement is hereby amended to permit
disclosure of the structure and tax aspects of the Facility as provided in this
paragraph (a).

(b) Subject to paragraph (a)
  of this Section 8.08, neither the Agent nor any Lender may disclose to any
  Person any confidential, proprietary or non-public information of the Borrower
  furnished to the Agent or the Lenders by the Borrower (such information being
  referred to collectively herein as the "Borrower Information"),
  except that each of the Agent and each of the Lenders may disclose Borrower
  Information (i) to its and its affiliates' employees, officers,
  directors, agents and advisors (it being understood that the Persons to whom
  such disclosure is made will be informed of the confidential nature of such
  Borrower Information and instructed to keep such Borrower Information
  confidential on substantially the same terms as provided herein), (ii) to
  the extent requested by any regulatory authority, (iii) to the extent
  required by applicable laws or regulations or by any subpoena or similar legal
  process, (iv) to any other party to this Agreement, (v) in
  connection with the exercise of any remedies hereunder or any suit, action or
  proceeding relating to this Agreement or the enforcement of rights hereunder
  or thereunder, (vi) subject to an agreement containing provisions
  substantially the same as those of this Section 8.08, to any assignee or
  participant, or any prospective assignee or participant, (vii) to the extent
  such Borrower Information (A) is or becomes generally available to the public
  on a non-confidential basis other than as a result of a breach of this Section
  8.08 by the Agent or such Lender, or (B) is or becomes available to the Agent
  or such Lender on a non-confidential basis from a source other than the
  Borrower and (viii) with the consent of the Borrower.


SECTION 8.09. Governing Law.
This Agreement and the Notes shall be governed by, and construed in accordance
with, the laws of the State of New York.

SECTION 8.10. Execution in
Counterparts. This 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 agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement.

SECTION 8.11. Jurisdiction,
Etc. (a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the Notes,
or for recognition or enforcement of any judgment, and each of the parties
hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal
court. The Borrower hereby irrevocably consents to the service of process in any
action or proceeding in such courts by the mailing thereof by any parties hereto
by registered or certified mail, postage prepaid, to the Borrower at its address
specified pursuant to Section 8.02. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement
or the Notes in the courts of any jurisdiction.

(b) Each of the parties hereto
  irrevocably and unconditionally waives, to the fullest extent it may legally
  and effectively do so, any objection that it may now or hereafter have to the
  laying of venue of any suit, action or proceeding arising out of or relating
  to this Agreement or the Notes in any New York State or federal court.
  Each of the parties hereto hereby irrevocably waives, to the fullest extent
  permitted by law, the defense of an inconvenient forum to the maintenance of
  such action or proceeding in any such court.

   


SECTION 8.12. Waiver of Jury
Trial. Each of the Borrower, the Agent and the Lenders hereby irrevocably
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to
this Agreement or the Notes or the actions of the Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.

IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

SEARS ROEBUCK ACCEPTANCE
                        CORP.

                        By: /s/ Keith E. Trost

                             Title: President

                        CITIBANK, N.A.,

                        as Agent

                        By:  /s/ Judith
                        Green

                             Title:  Vice
                        President

                         

                        
                         

                        
                         

                      
                    
                  
                
              
            
          
        
      
    
  


 
	
      Initial Lenders                  

	
        
	
      

	
      
          Commitment
          
          
        
	
       

    
	
      
          $350,000,000.00
          
        
      
	
      CITIBANK, N.A.

	
       

    	
      By: 
      /s/ Judith Green

         Title: Vice President

	
       

    	
       

    
	
      
          $350,000,000.00
          
        
      
	
      BANK ONE, NA

	
       

    	
      By: 
      /s/ John Ryan

         Title:  Managing Director

	
       

    	
       

    
	
      Documentation Agents                  

	
      
	
        

	
      
          $300,000,000.00
          
        
      
	
      BARCLAYS BANK PLC

	
       

    	
      By: 
      /s/ John Giannone

         Title:  Director

	
       

    	
       

    
	
      
          $225,000,000.00
          
        
      
	
      BANK OF AMERICA, N.A.

	
       

    	
      By: 
      /s/ Jeffrey H. Susman

         Title:  Managing Director

	
       

    	
       

    
	
      Senior Managing Agents                  

	
      
	
        

	
      
          $200,000,000.00
          
        
      
	
      MERRILL LYNCH BANK USA

	
       

    	
      By: 
      /s/ Louis Alder

         Title:  Vice President

	
       

    	
       

    
	
      
          $200,000,000.00
          
        
      
	
      MORGAN STANLEY BANK

	
       

    	
      By: 
      /s/ Jaap L. Tonckens

         Title:  Vice President

	
       

    	
       

    
	
      Managing Agents                

	
      
	
        

	
      
          $150,000,000.00
          
        
      
	
      DEUTSCHE BANK AG NEW YORK BRANCH

	
       

    	
      By: 
      /s/ Thomas A. Foley

         Title: Vice President

	
       

    	
      By: 
      /s/ William W. McGinty

         Title: Director

	
       

    	
       

    
	
      
          $150,000,000.00
          
        
      
	
      WESTLB AG, NEW YORK BRANCH

	
       

    	
      By: 
      /s/ Richard J. Pearse

         Title:  Executive Director

	
       

    	
      By: 
      /s/ Salvatore Battinelli

         Title: Managing Director

	
       

    	
       

    
	
      
      Co-Agents                   

	
      
	
        

	
      
          $120,000,000.00
          
        
      
	
      BH FINANCE LLC

	
       

    	
      By: 
      /s/ Marc D. Hamburg

         Title:  President

	
       

    	
       

    
	
      
          $100,000,000.00
          
        
      
	
      KEYBANK NATIONAL ASSOCIATION

	
       

    	
      By: 
      /s/ David J. Wechter

         Title:  Vice President

	
       

    	
       

    
	
      
          $100,000,000.00
          
        
      
	
      ROYAL BANK OF CANADA

	
       

    	
      By: 
      /s/ Scott Umbs

         Title:  Manager

	
       

    	
       

    
	
      
          $100,000,000.00
          
        
      
	
      UBS AG, CAYMAN ISLAND BRANCH

	
       

    	
      By: 
      /s/ Patricia O'Kicki

         Title:  Director

	
      
	
      By: 
      /s/ Luke Goldsworthy

         Title:  Associate Director

	
       

    	
       

    
	
      
          $100,000,000.00
          
        
      
	
      WACHOVIA BANK, N.A.

	
       

    	
      By: 
      /s/ Susan T. Vitale

         Title:  Vice President

	
       

    	
       

    
	
      
          $100,000,000.00
          
        
      
	
      WELLS FARGO BANK, NATIONAL ASSOCIATION

	
       

    	
      By: 
      /s/ Mary Falck

         Title: Senior Vice President

	
      
	
      By: 
      /s/ Melissa Nachmann

        Title:  Vice President

	
       

    	
       

    
	
      
          $75,000,000.00
          
        
      
	
      BNP PARIBAS

	
       

    	
      By: 
      /s/ Rosalie Hawley

         Title:  Director

	
      
	
      By: 
      /s/ 

         Title:  Central Region Manager

	
       

    	
       

    
	
      
          $75,000,000.00
          
        
      
	
      CIBC INC.

	
       

    	
      By: 
      /s/ Dominic J. Sorresso

         Title: Executive Director

	
       

    	
       

    
	
      
          $75,000,000.00
          
        
      
	
      U.S. BANK NATIONAL ASSOCIATION

	
       

    	
      By: 
      /s/ John Franceschi

         Title: Vice President

	
       

    	
       

    
	
      
          $65,000,000.00
          
        
      
	
      FIFTH THIRD BANK

	
       

    	
      By: 
      /s/ Christopher Jones

         Title:  Vice President

	
       

    	
       

    
	
      
          $60,000,000.00
          
        
      
	
      STATE STREET BANK AND TRUST COMPANY

	
       

    	
      By: 
      /s/ Juan G. Sierra

         Title:  Assistant Vice President

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      BANCA NAZIONALE DEL LAVORO S.p.A.,

           NEW YORK BRANCH

	
       

    	
      By: 
      /s/ Francesco Di Mario

         Title:  Vice President

	
       

    	
      By: 
      /s/ Leonardo Valentini

         Title:  First Vice President

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      BANCO POPULAR DE PUERTO RICO,

           NEW YORK BRANCH

	
       

    	
      By: 
      /s/ Hector J. Gonzalez

         Title:  Vice President

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      BMO NESBITT BURNS FINANCING INC.

	
       

    	
      By: 
      /s/ 

         Title: Managing Director

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      THE BANK OF NOVA SCOTIA

	
       

    	
      By: 
      /s/ V. Gibson

         Title:  Assistant Agent

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      BEAR STEARNS CORPORATE LENDING INC.

	
       

    	
      By: 
      /s/ Keith C. Barnish

         Title:  Executive Vice President

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      DRESDNER BANK AG

	
       

    	
      By: 
      /s/ Deborah Carlson

         Title:  Director

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      FLEET NATIONAL BANK

	
       

    	
      By: 
      /s/ Stephen Garvin

         Title: Managing Director

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      NATIONAL CITY BANK

	
       

    	
      By: 
      /s/ Jeffrey Hawthorne

         Title:  Senior Vice President

	
       

    	
       

    
	
      
          $50,000,000.00
          
        
      
	
      THE NORTHERN TRUST COMPANY

	
       

    	
      By: 
      /s/ Craig Smith

         Title:  Vice President

	
       

    	
       

    
	
      
          $35,000,000.00
          
        
      
	
      PNC BANK, N.A.

	
       

    	
      By: 
      Deborah K. Breslof

         Title: Vice President

	
       

    	
       

    
	
      
          $25,000,000.00
          
        
      
	
      THE BANK OF NEW YORK

	
       

    	
      By: 
      /s/  William M. Barnum

         Title:  Vice President

	
       

    	
       

    
	
      
          $25,000,000.00
          
        
      
	
      FIRST HAWAIIAN BANK

	
       

    	
      By: 
      /s/ Charles L. Jenkins

         Title:  Vice President/Manager

	
       

    	
       

    
	
      
          $25,000,000.00
          
        
      
	
      THE HUNTINGTON NATIONAL BANK

	
       

    	
      By: 
      /s/ Pamela LeRose

         Title:  Vice President

	
       

    	
       

    
	
      
          $25,000,000.00
          
        
      
	
      MELLON BANK, N.A.

	
       

    	
      By: /s/
      Mark F. johnston

         Title:  Vice President

	
       

    	
       

    
	
      
          $20,000,000.00
          
        
      
	
      M&I MARSHALL & ILSLEY BANK

	
       

    	
      By: /s/
      Stephen F. Geimer

         Title:  Senior Vice President

	
       

    	
      By: /s/
      Stephen S. Kalmer

         Title:  Vice President

	
       

    	
       

    
	
      
          $3,500,000,000.00
          
        
      
	
      Total of the Commitments





 

 

SCHEDULE I

SEARS ROEBUCK ACCEPTANCE CORP.

364-DAY CREDIT AGREEMENT

APPLICABLE LENDING OFFICES


	
      Name of Initial Lender
	
      Domestic Lending Office
	
      Eurodollar Lending Office

	
      Banca Nazionale del Lavoro S.p.A., New
      York Branch
	
      25 West 51st Street

      New York, NY 10019

      Attn: Anna Hernandez

      T: 212 314-0679

      F: 212 314-0244
	
      25 West 51st Street

      New York, NY 10019

      Attn: Anna Hernandez

      T: 212 314-0679

      F: 212 314-0244

	
      Banco Popular de Puerto Rico, New York
      Branch
	
      9600 Bryn Mawr, 3rd Floor

      Rosemont, IL 60018

      Attn: Jim Brennan

      T: 847 994-5460

      F: 847 994-5917
	
      9600 Bryn Mawr, 3rd Floor

      Rosemont, IL 60018

      Attn: Jim Brennan

      T: 847 994-5460

      F: 847 994-5917

	
      Bank of America, N.A.
	
      1850 Gateway Blvd.

      Concord, CA 94520

      Attn: G.K. Lapitan

      T: 925 675-8205

      F: 888 969-9264
	
      1850 Gateway Blvd.

      Concord, CA 94520

      Attn: G.K. Lapitan

      T: 925 675-8205

      F: 888 969-9264

	
      The Bank of New York
	
      One Wall Street

      New York, NY 10286

      Attn: Diane Burgess

      T: 212 635-1311
	
      One Wall Street

      New York, NY 10286

      Attn: Diane Burgess

      T: 212 635-1311

	
      The Bank of Nova Scotia
	
      600 Peachtree Street N.E.

      Atlanta Agency, Suite 2700

      Atlanta, GA 30308

      Attn: Mystro Whatley

      T: 404 877-1566

      F: 404 888-8998
	
      600 Peachtree Street N.E.

      Atlanta Agency, Suite 2700

      Atlanta, GA 30308

      Attn: Mystro Whatley

      T: 404 877-1566

      F: 404 888-8998

	
      Bank One, NA
	
      1 Bank One Plaza

      Suite IL1-0088

      Chicago, IL 60670

      Attn: Erica Lowe

      T: 312 732-6137

      F: 312 732-2715
	
      1 Bank One Plaza

      Suite IL1-0088

      Chicago, IL 60670

      Attn: Erica Lowe

      T: 312 732-6137

      F: 312 732-2715

	
      Barclays Bank PLC
	
      222 Broadway, 11th Floor

      New York, NY 10038

      Attn: Jan Becker

      T: 212 412-3795

      F: 212 412-5306
	
      222 Broadway, 11th Floor

      New York, NY 10038

      Attn: Jan Becker

      T: 212 412-3795

      F: 212 412-5306

	
      Bear Stearns Corporate Lending Inc.
	
      383 Madison Avenue

      New York, NY 10179

      Attn: Gloria Dombrowski

      T: 212 272-6043

      F: 212 272-4844
	
      383 Madison Avenue

      New York, NY 10179

      Attn: Gloria Dombrowski

      T: 212 272-6043

      F: 212 272-4844

	
      BH Finance LLC
	
      1440 Kiewit Plaza

      Omaha, NE 68131

      Attn: Marg Hamburg

      T: 402 346-1400

      F: 402 346-3375
	
      1440 Kiewit Plaza

      Omaha, NE 68131

      Attn: Marg Hamburg

      T: 402 346-1400

      F: 402 346-3375



 

	
      BMO Nesbitt Burns Financing Inc.
	
      115 S. LaSalle Street

      Chicago, IL 60603

      Attn: Ellen Dancer
	
      115 S. LaSalle Street

      Chicago, IL 60603

      Attn: Ellen Dancer

	
      BNP Paribas
	
      919 Third Avenue, 3rd Floor

      New York, NY 10022

      Attn: Naomi Lehrer

      T: 212 471-6626

      F: 212 471-6695
	
      919 Third Avenue, 3rd Floor

      New York, NY 10022

      Attn: Naomi Lehrer

      T: 212 471-6626

      F: 212 471-6695

	
      CIBC Inc.
	
      2727 Paces Ferry Road, Suite 120

      2 Paces West, Building 2

      Atlanta, GA 30339

      Attn: Clare Coyne

      T: 770 319-4836

      F: 770 319-4950
	
      2727 Paces Ferry Road, Suite 120

      2 Paces West, Building 2

      Atlanta, GA 30339

      Attn: Clare Coyne

      T: 770 319-4836

      F: 770 319-4950

	
      Citibank, N.A.
	
      Two Penns Way

      New Castle, DE 19720

      Attn:

      T:

      F:
	
      Two Penns Way

      New Castle, DE 19720

      Attn:

      T:

      F:

	
      Deutsche Bank AG New York Branch
	
      90 Hudson Street

      Mailstop JCY05-0511

      Jersey City, NJ 07302

      Attn: Carmen Melendez

      T: 201 593-2224

      F: 201 593-2313
	
      90 Hudson Street

      Mailstop JCY05-0511

      Jersey City, NJ 07302

      Attn: Carmen Melendez

      T: 201 593-2224

      F: 201 593-2313

	
      Dresdner Bank AG
	
      1301 Avenue of the Americas

      New York, NY 10019

      Attn: Laverne Small

      T: 212 429-2511

      F: 212 429-2130
	
      1301 Avenue of the Americas

      New York, NY 10019

      Attn: Laverne Small

      T: 212 429-2511

      F: 212 429-2130

	
      Fifth Third Bank
	
      1701 Golf Road

      GRLM7B

      Rolling Meadows, IL 60008

      Attn: Kim Coons

      T: 847 354-7126

      F: 847 354-7130
	
      1701 Golf Road

      GRLM7B

      Rolling Meadows, IL 60008

      Attn: Kim Coons

      T: 847 354-7126

      F: 847 354-7130

	
      First Hawaiian Bank
	
      999 Bishop Street, 8th Floor

      Honolulu, HI 96813

      Attn: Charles Jenkins

      T: 808 525-6289

      F: 808 525-6372
	
      999 Bishop Street, 8th Floor

      Honolulu, HI 96813

      Attn: Charles Jenkins

      T: 808 525-6289

      F: 808 525-6372

	
      Fleet National Bank
		
	
      The Huntington National Bank
	
      7450 Huntington Park Drive

      Suite 305

      Columbus, OH 43235

      Attn: Kristina Brakefield

      T: 614 480-2881

      F: 614 480-2249
	
      7450 Huntington Park Drive

      Suite 305

      Columbus, OH 43235

      Attn: Kristina Brakefield

      T: 614 480-2881

      F: 614 480-2249

	
      Keybank National Association
	
      127 Public Square

      Cleveland, OH 44114

      Attn: Laura Binkley

      T: 216 689-4448

      F: 216 689-4981
	
      127 Public Square

      Cleveland, OH 44114

      Attn: Laura Binkley

      T: 216 689-4448

      F: 216 689-4981



 

	
      M&I Marshall & Ilsley Bank
	
      401 North Executive Drive

      Brookfield, WI

      Attn: Nenita Yumang

      T: 262 938-8675

      F: 262 938-8684
	
      401 North Executive Drive

      Brookfield, WI

      Attn: Nenita Yumang

      T: 262 938-8675

      F: 262 938-8684

	
      Mellon Bank, N.A.
	
      525 William Penn Place

      Room 1203

      Pittsburgh, PA 15259

      Attn: Richard Bouchard

      T: 412 234-5767

      F: 412 209-6124
	
      525 William Penn Place

      Room 1203

      Pittsburgh, PA 15259

      Attn: Richard Bouchard

      T: 412 234-5767

      F: 412 209-6124

	
      Merrill Lynch Bank USA
	
      15 W. South Temple, Suite 300

      Salt Lake City, UT 84101

      Attn: Derek Befus

      T: 801 526-6814

      F: 801 531-7470
	
      15 W. South Temple, Suite 300

      Salt Lake City, UT 84101

      Attn: Derek Befus

      T: 801 526-6814

      F: 801 531-7470

	
      Morgan Stanley Bank
	
      1633 Broadway

      New York, NY 10019

      Attn: Larry Benison

      T: 212 537-1384

      F: 212 537-1867
	
      1633 Broadway

      New York, NY 10019

      Attn: Larry Benison

      T: 212 537-1384

      F: 212 537-1867

	
      National City Bank
	
      155 East Broad Street

      Columbus, OH 43251

      Attn: Vicki Niemela

      T: 614 463-7133

      F: 614 463-8572
	
      155 East Broad Street

      Columbus, OH 43251

      Attn: Vicki Niemela

      T: 614 463-7133

      F: 614 463-8572

	
      The Northern Trust Company
	
      50 S. LaSalle Street

      Chicago, IL 60675

      Attn: Linda Honda

      T: 312 444-3532

      F: 312 630-1566
	
      50 S. LaSalle Street

      Chicago, IL 60675

      Attn: Linda Honda

      T: 312 444-3532

      F: 312 630-1566

	
      PNC Bank, N.A.
	
      500 First Avenue

      Pittsburgh, PA 15219

      Attn: Jack Caracciolo

      T: 412 768-9973

      F: 412 768-4586
	
      500 First Avenue

      Pittsburgh, PA 15219

      Attn: Jack Caracciolo

      T: 412 768-9973

      F: 412 768-4586

	
      Royal Bank of Canada
	
      One Liberty Plaza, 3rd Floor

      New York, NY 10006

      Attn: Manager, Loans Administration

      T: 212 428-6322

      F: 212 428-2372
	
      One Liberty Plaza, 3rd Floor

      New York, NY 10006

      Attn: Manager, Loans Administration

      T: 212 428-6322

      F: 212 428-2372

	
      State Street Bank and Trust Company
	
      Lafayette Corporate Center

      2 Avenue de Lafayette

      Boston, MA 02111

      Attn: Lauren Molloy

      T: 617 662-2348

      F: 617 662-2323
	
      Lafayette Corporate Center

      2 Avenue de Lafayette

      Boston, MA 02111

      Attn: Lauren Molloy

      T: 617 662-2348

      F: 617 662-2323

	
      UBS AG, Cayman Island Branch
	
      677 Washington Blvd.

      Stamford, CT. 06901

      Attn: Deborah Porter

      T: 203 719-6391

      F: 203 719-3888
	
      677 Washington Blvd.

      Stamford, CT. 06901

      Attn: Deborah Porter

      T: 203 719-6391

      F: 203 719-3888



 

	
      U.S. Bank National Association
	
      400 City Center

      Oshkosh, WI 54901

      Attn: Connie Sweeney

      T: 920 237-7604

      F: 920 237-7993
	
      400 City Center

      Oshkosh, WI 54901

      Attn: Connie Sweeney

      T: 920 237-7604

      F: 920 237-7993

	
      Wachovia Bank, N.A.
	
      201 S. College Street, CP-9

      Charlotte, NC 28288

      Attn: Cynthia Rawson

      T: 704 374-4425

      F: 704 374-2802
	
      201 S. College Street, CP-9

      Charlotte, NC 28288

      Attn: Cynthia Rawson

      T: 704 374-4425

      F: 704 374-2802

	
      Wells Fargo Bank, National Association
	
      201 Third Street, MAC 0187081

      San Francisco, Ca 94103

      Attn: Ginnie Padgett

      T: 415 477-5374

      F: 415 979-0675
	
      201 Third Street, MAC 0187081

      San Francisco, Ca 94103

      Attn: Ginnie Padgett

      T: 415 477-5374

      F: 415 979-0675

	
      WestLB AG, New York Branch
	
      1211 Avenue of the Americas

      25th Floor

      New York, NY 10036

      Attn: Yolette Salnave

      T: 212 852-5994

      F: 212 302-7946
	
      1211 Avenue of the Americas

      25th Floor

      New York, NY 10036

      Attn: Yolette Salnave

      T: 212 852-5994

      F: 212 302-7946






SCHEDULE 3.01(b)

Disclosed Litigation

 

 


None




 


SCHEDULE 5.02(a)

Liens Existing on the Effective
Date

 

 

 


None




 

 

EXHIBIT A - FORM OF

REVOLVING CREDIT

PROMISSORY NOTE




	
      U.S.$_______________
	
      Dated: _______________, 200_




 

FOR VALUE RECEIVED, the
undersigned, SEARS ROEBUCK ACCEPTANCE CORP., a Delaware corporation (the "Borrower"),
HEREBY PROMISES TO PAY to the order of _________________________ (the "Lender")
for the account of its Applicable Lending Office on the later of] the
Termination Date and the date designated pursuant to Section 2.05 of
the Credit Agreement (each as defined in the Credit Agreement referred to below)
the principal sum of U.S.$[amount of the Lender's Commitment in figures] or, if
less, the aggregate principal amount of the Advances made by the Lender to the
Borrower pursuant to the 364-Day Credit Agreement dated as of February 24, 2003
among the Borrower, the Lender and certain other 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 Agent
for the Lender and such other lenders (as amended or modified from time to time,
the "Credit Agreement"; the terms defined therein being used
herein as therein defined) outstanding on such date.

The Borrower promises to pay
interest on the unpaid principal amount of each Advance from the date of such
Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.

Both principal and interest are
payable in lawful money of the United States of America to Citibank, as Agent,
at 388 Greenwich Street, New York, New York 10013, in same day funds. Each
Advance owing to the Lender by the Borrower pursuant to the Credit Agreement,
and all payments made on account of principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto
which is part of this Promissory Note.

This Promissory Note is one of
the Notes referred to in, and is entitled to the benefits of, the Credit
Agreement. The Credit Agreement, among other things, (i) provides for the
making of Advances by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S. dollar amount
first above mentioned, the indebtedness of the Borrower resulting from each such
Advance being evidenced by this Promissory Note and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.

SEARS ROEBUCK ACCEPTANCE CORP.

By
                             __________________________

                                Title:

                            ADVANCES AND
                            PAYMENTS OF PRINCIPAL

                          
                        
                      
                    
                  
                
              
            
          
        
      
    
  






	
      

      Date
	
      

      Amount of

      Advance
	
      Amount of

      Principal Paid

      or Prepaid
	
      

      Unpaid Principal

      Balance
	
      

      Notation

      Made By

	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 





 

EXHIBIT B - FORM OF NOTICE OF

BORROWING

Citibank, N.A., as Agent

  for the Lenders parties

  to the Credit Agreement

  referred to below

  Two Penns Way

  New Castle, Delaware 19720

[Date]

Attention: Bank Loan
Syndications Department

Ladies and Gentlemen:

The undersigned, Sears Roebuck
Acceptance Corp., refers to the 364-Day Credit Agreement, dated as of February
24, 2003 (as amended or modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein
defined), among the undersigned, certain 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
Agent for said Lenders, and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets forth below
the information relating to such Borrowing (the "Proposed Borrowing")
as required by Section 2.02(a) of the Credit Agreement:

(i) The Business Day of the
  Proposed Borrowing is _______________, 200_.

  (ii) The Type of Advances
  comprising the Proposed Borrowing is [Base Rate Advances] [Eurodollar Rate
  Advances].

  (iii) The aggregate amount of
  the Proposed Borrowing is $_______________.

  [(iv) The initial Interest
  Period for each Eurodollar Rate Advance made as part of the Proposed Borrowing
  is _____ month[s].]


The undersigned hereby certifies
that the following statements are true on the date hereof, and will be true on
the date of the Proposed Borrowing:

(A) the representations and
  warranties contained in Section 4.01 of the Credit Agreement (except the
  representations set forth in the last sentence of subsection (e) thereof
  and in subsection (f)(i) thereof) are correct, before and after giving
  effect to the Proposed Borrowing and to the application of the proceeds
  therefrom, as though made on and as of such date; and

   

  (B) no event has occurred and
  is continuing, or would result from such Proposed Borrowing or from the
  application of the proceeds therefrom, that constitutes a Default.


Very truly yours,

SEARS ROEBUCK ACCEPTANCE CORP.

By  __________________________

                                 Title:.

                          
                        
                      
                    
                  
                
              
            
          
        
      
    
  



 

EXHIBIT C - FORM OF

ASSIGNMENT AND ACCEPTANCE

Reference is made to the 364-Day
Credit Agreement dated as of February 24, 2003 (as amended or modified from time
to time, the "Credit Agreement") among Sears Roebuck Acceptance
Corp., a Delaware corporation (the "Borrower"), the Lenders (as
defined in the Credit Agreement), 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 agent for the Lenders (the "Agent").
Terms defined in the Credit Agreement are used herein with the same meaning.

The "Assignor" and the
"Assignee" referred to on Schedule I hereto agree as follows:

1. The Assignor hereby sells
  and assigns to the Assignee, and the Assignee hereby purchases and assumes
  from the Assignor, an interest in and to the Assignor's rights and obligations
  under the Credit Agreement as of the date hereof equal to the percentage
  interest specified on Schedule 1 hereto of all outstanding rights and
  obligations under the Credit Agreement. After giving effect to such sale and
  assignment, the Assignee's Commitment and the amount of the Advances owing to
  the Assignee will be as set forth on Schedule 1 hereto.

  2. The Assignor (i) represents
  and warrants that it is the legal and beneficial owner of the interest being
  assigned by it hereunder and that such interest is free and clear of any
  adverse claim; (ii) makes no representation or warranty and assumes no
  responsibility with respect to any statements, warranties or representations
  made in or in connection with the Credit Agreement or the execution, legality,
  validity, enforceability, genuineness, sufficiency or value of the Credit
  Agreement or any other instrument or document furnished pursuant thereto;
  (iii) makes no representation or warranty and assumes no responsibility
  with respect to the financial condition of the Borrower or the performance or
  observance by the Borrower of any of its obligations under the Credit
  Agreement or any other instrument or document furnished pursuant thereto; and
  (iv) attaches the Note held by the Assignor and requests that the Agent
  exchange such Note for a new Note payable to the order of the Assignee in an
  amount equal to the Commitment assumed by the Assignee pursuant hereto or new
  Notes payable to the order of the Assignee in an amount equal to the
  Commitment assumed by the Assignee pursuant hereto and the Assignor in an
  amount equal to the Commitment retained by the Assignor under the Credit
  Agreement, respectively, as specified on Schedule 1 hereto.

  3. The Assignee (i) confirms
  that it has received a copy of the Credit Agreement, together with copies of
  the financial statements referred to in Section 4.01 thereof and such
  other documents and information as it has deemed appropriate to make its own
  credit analysis and decision to enter into this Assignment and Acceptance;
  (ii) agrees that it will, independently and without reliance upon the
  Agent, the Assignor or any other Lender and based on such documents and
  information as it shall deem appropriate at the time, continue to make its own
  credit decisions in taking or not taking action under the Credit Agreement;
  (iii) confirms that it is an Eligible Assignee; (iv) appoints and
  authorizes the Agent to take such action as agent on its behalf and to
  exercise such powers and discretion under the Credit Agreement as are
  delegated to the Agent by the terms thereof, together with such powers and
  discretion as are reasonably incidental thereto; (v) agrees that it will
  perform in accordance with their terms all of the obligations that by the
  terms of the Credit Agreement are required to be performed by it as a Lender;
  and (vi) attaches any U.S. Internal Revenue Service forms required under
  Section 2.13 of the Credit Agreement.

  4. Following the execution of
  this Assignment and Acceptance, it will be delivered to the Agent for
  acceptance and recording by the Agent. The effective date for this Assignment
  and Acceptance (the "Effective Date") shall be the date of
  acceptance hereof by the Agent, unless otherwise specified on Schedule 1
  hereto.

  5. Upon such acceptance and
  recording by the Agent, as of the Effective Date, (i) the Assignee shall
  be a party to the Credit Agreement and, to the extent provided in this
  Assignment and Acceptance, have the rights and obligations of a Lender
  thereunder and (ii) the Assignor shall, to the extent provided in this
  Assignment and Acceptance, relinquish its rights and be released from its
  obligations under the Credit Agreement.

  6. Upon such acceptance and
  recording by the Agent, from and after the Effective Date, the Agent shall
  make all payments under the Credit Agreement and the Notes in respect of the
  interest assigned hereby (including, without limitation, all payments of
  principal, interest and facility fees with respect thereto) to the Assignee.
  The Assignor and Assignee shall make all appropriate adjustments in payments
  under the Credit Agreement and the Notes for periods prior to the Effective
  Date directly between themselves.

  7. This Assignment and
  Acceptance shall be governed by, and construed in accordance with, the laws of
  the State of New York.

  8. This Assignment and
  Acceptance 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 agreement. Delivery of an executed counterpart of Schedule 1
  to this Assignment and Acceptance by telecopier shall be effective as delivery
  of a manually executed counterpart of this Assignment and Acceptance.


IN WITNESS WHEREOF, the Assignor
and the Assignee have caused Schedule 1 to this Assignment and Acceptance
to be executed by their officers thereunto duly authorized as of the date
specified thereon.



 

Schedule 1

to

Assignment and Acceptance




	
      Percentage interest assigned:
	
      _____%

	
      Assignee's Commitment:
	
      $______

	
      Aggregate outstanding principal amount of
      Advances assigned:
	
      $______

	
      Principal amount of Note payable to
      Assignee:
	
      $______

	
      Principal amount of Note payable to
      Assignor:
	
      $______

	
      Effective Date*:
      _______________, 200_
	 



[NAME OF ASSIGNOR],
                            as Assignor

                            By
                            __________________________

                            Title:

                            Dated:
                            _______________, 200_

                            [NAME OF ASSIGNEE],
                            as Assignee

                            By
                            __________________________

                            Title:

                            Dated:
                            _______________, 200_

                            Domestic Lending
                            Office:

                            [Address]

                            Eurodollar Lending
                            Office:

                            [Address]

                          
                        
                      
                    
                  
                
              
            
          
        
      
    
  

Accepted [and Approved]**
this

__________ day of _______________, 200_

CITIBANK, N.A., as Agent

By  ___________________________

    Title:

[Approved this __________ day

of _______________, 200_

SEARS ROEBUCK ACCEPTANCE CORP.

By  ___________________________

     Title:



 

EXHIBIT D-1 - FORM OF

OPINION OF COUNSEL

FOR THE BORROWER


 

February 24,
2003

To each of the Lenders parties

to the 364-Day Credit Agreement dated

as of February 24, 2003

among Sears Roebuck Acceptance Corp.,

said Lenders and Citibank, N.A.,

as Agent for said Lenders, and to

Citibank, N.A., as Agent



Ladies and Gentlemen:

I am the Vice President - Deputy General Counsel
and Acting General Counsel of Sears, Roebuck and Co. ("Sears").
The Sears Law Department, under my supervision, has acted as counsel to Sears
Roebuck Acceptance Corp. ("SRAC") in connection with the
364-Day Credit Agreement, dated as of February 24, 2003 (the "Credit
Agreement"), among Sears Roebuck Acceptance Corp. ("SRAC"),
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 Agent for said Lenders. This opinion is
rendered to you pursuant to Section 3.01(h)(v) of the Credit Agreement. All
terms not otherwise defined herein have the meanings ascribed to them in the
Credit Agreement.

I have made such legal and factual examinations
and inquiries, including an examination of originals or copies certified or
otherwise identified to my satisfaction of such documents, corporate records and
other instruments, as I have deemed necessary or appropriate for the purposes of
this opinion. In that connection, we have examined:


	
      The Credit
      Agreement.

	
      The documents
      furnished by SRAC pursuant to Article III of the Credit Agreement.

	
      The Certificate
      of Incorporation of SRAC and all amendments thereto.

	
      The By-Laws of
      SRAC and all amendments thereto.

	
      A certificate of
      the Secretary of State of Delaware, dated February __, 2003, attesting to
      the continued corporate existence and good standing of SRAC in that State.




I have also obtained and relied upon, to the
extent I deem appropriate, certificates of officers and other executives of SRAC
and of public officials as to factual matters. I call your attention to the fact
that, in rendering my opinion, I am expressing my views only as to the laws of
the State of Illinois, the General Corporation Law of the State of Delaware and
the federal statutes of the United States of America.

On the basis of the
foregoing and in reliance thereon, I am of the opinion that, as of the date
hereof:

	
    SRAC has been duly
    incorporated and is validly existing as a corporation in good standing under
    the laws of the State of Delaware.

	
    The execution,
    delivery and performance by SRAC of the Credit Agreement and the Notes, and
    the consummation of the transactions contemplated thereby, are within SRAC's
    corporate powers and have been duly authorized by all necessary corporate
    action. The Credit Agreement and the Notes have been duly executed and
    delivered on behalf of SRAC.

	
    The execution and
    delivery of the Notes and the compliance by SRAC with all of the provisions
    of the Notes and the Credit Agreement will not (a) conflict with or result
    in any breach which would constitute a default under, or result in the
    creation or imposition of any lien, charge or encumbrance upon any of the
    property or assets of SRAC, material to SRAC, pursuant to the terms of any
    indenture, loan agreement or other agreement or instrument for borrowed
    money to which SRAC is a party or by which SRAC may be bound or to which any
    of the property or assets of SRAC, material to SRAC, is subject, (b) result
    in any violation of the provisions of the Certificate of Incorporation, as
    amended, or the By-Laws, as amended, of SRAC or (c) result in any material
    violation of any statute or any order, rule or regulation applicable to SRAC
    of any court or any federal, state or other regulatory authority or other
    governmental body having jurisdiction over SRAC.

	
    No authorization,
    approval or other action by, and no notice to or filing with, any
    governmental authority or regulatory body or any other third party is
    required for the due execution, delivery and performance by SRAC of the
    Credit Agreement and the Notes.

	I do not know of any pending legal or
    governmental proceeding (i) required to be described in SRAC's 2001 Form
    10-K or in the Quarterly Reports on Form 10-Q of SRAC filed with the
    Commission pursuant to the Exchange Act subsequent thereto, which are not
    described as required or (ii) which would be required to be described in a
    Quarterly Report on Form 10-Q filed by SRAC if such filing were made on the
    date hereof. To the best of my knowledge, there are no pending legal or
    governmental proceedings against SRAC that purport to affect the legality,
    validity, binding effect or enforceability of the Credit Agreement or any of
    the Notes or the consummation of the transactions contemplated thereby.


In rendering my opinion, I have assumed that
each party to the Credit Agreement (other than SRAC) has the requisite corporate
power and authority to execute and deliver the Credit Agreement and to perform
its obligations under the Credit Agreement, that the Credit Agreement has been
duly authorized, executed and delivered by the parties thereto (other than SRAC)
and that the signatures (other than those on behalf of SRAC) on all documents
examined by me are genuine, assumptions which I have not independently verified.

This opinion is furnished by
me as counsel for SRAC to each of you and is solely for your benefit and is not
to be otherwise used, circulated or relied upon without my express written
consent. Notwithstanding the foregoing, a copy of this opinion letter may be
delivered by any of you to any Person that becomes a Lender in accordance with
the provisions of the Credit Agreement. Any such Lender may rely on the opinion
expressed above as if this opinion letter were addressed and delivered to such
Lender on the date hereof.

Very
                        truly yours,

                    
                  
                
              
            
          
        
      
    
  





 

EXHIBIT D-2 - FORM OF

OPINION OF COUNSEL

FOR THE BORROWER


 

February 24, 2003

To each of the Lender parties

to the 364 Day Credit Agreement

dated as of February 24, 2003 among

Sears Roebuck Acceptance Corp.,

said Lenders and Citibank, N.A.,

as Agent for said Lenders

and to Citibank, N.A., as Agent

Re: Sears
        Roebuck Acceptance Corp.

        
      
    
  

Ladies and Gentlemen:

We have acted as special counsel
to Sears Roebuck Acceptance Corp., a Delaware corporation (the "Company"),
in connection with the preparation, execution and delivery of the 364 Day Credit
Agreement dated as of February 24, 2003 (the "Credit Agreement"),
among the Company the Lenders parties thereto, Bank One, N.A., as syndication
agent, Baclays 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 Agent for said Lenders
and certain other agreements, instruments and documents related to the Credit
Agreement. This opinion is being delivered pursuant to Section 3.01(h)(iv) of
the Credit Agreement. Terms used herein and defined in the Credit Agreement, but
not otherwise defined herein, shall have the same meanings herein as ascribed
thereto in the Credit Agreement.

In rendering the opinions set
forth herein, we have examined such certificates of public officials,
certificates of officers of the Company and copies certified to our satisfaction
of corporate documents and records of the Company, and have made such other
investigations, as we have deemed relevant and necessary as a basis for such
opinions. As to questions of fact material to the opinions set forth herein, we
have relied, to the extent we have deemed reliance appropriate, without
independent investigation, upon said certificates of public officials and of
officers of the Company and representations and warranties of the Company in the
Transaction Agreements (hereinafter defined).

In rendering the opinions set forth herein, we
have examined and relied on originals or copies of the following:


	
      the Credit
      Agreement;

	
      documents
      furnished pursuant to Article III of the Credit Agreement, and

	
      other documents
      as we have deemed necessary or appropriate as a basis for the opinions set
      forth below herein.




The Credit Agreement and the
Notes shall hereinafter be referred to collectively as the "Transaction
Agreements." "Applicable Laws" shall mean those laws,
rules and regulations of the State of New York, the General Corporation Law of
the State of Delaware, as amended, and the laws, rules and regulations of the
United States of America. "Governmental Approval" means any
consent, approval, license, authorization or validation of, or filing, recording
or registration with, any Governmental Agency pursuant to an Applicable Law.

Based upon the foregoing and
subject to the limitations, qualifications, exceptions and assumptions set forth
herein, we are of the opinion that:


    (1)    The Credit
  Agreement is, and after giving effect to the initial Borrowing, the Notes will
  be  

             legal, valid and
  binding obligations enforceable against the Company in accordance with their
  respective

             terms under
  Applicable Laws.



Our opinions are subject to the
following assumptions and qualifications:


	
      Members of our
      firm are admitted to the bar of the State of New York. We express no
      opinion as to the laws of any jurisdiction other than (i) the laws of the
      State of New York, (ii) the General Corporation Law of the State of
      Delaware, as amended and (iii) laws of the United States of America. In
      addition, we express no opinion herein concerning any statutes,
      ordinances, administrative decisions, rules or regulations of any county,
      town, municipality or special political subdivision (whether created or
      enabled through legislative action at the federal, state or regional
      level).

	
      We have assumed
      the accuracy and completeness of all documents and records that we have
      reviewed; the legal capacity of natural persons; the authenticity of all
      records, documents and instruments submitted to us as originals; the
      conformity to original records, documents and instruments of all records,
      documents and instruments submitted to us as certified or photostatic
      copies; and the authenticity of the originals of such copies. We have
      assumed the genuineness of all signatures (other than those of the
      Company).

	
      We have assumed
      each of the Transaction Agreements constitute the legal, valid and binding
      obligation of each party other than the Company (the "Other
      Parties") to each Transaction Agreement, enforceable against such
      Other Parties in accordance with its terms, each of the Other Parties has
      complied with all legal requirements that are applicable to it that (i)
      affect the transactions described in the Transaction Agreements or are
      necessary to make the Transaction Agreements enforceable against it, or
      (ii) pertain to its status as such status relates to its rights to enforce
      the Transaction Agreements against the Company.

	
      We have assumed
      that (i) the Company is duly organized, validly existing and in good
      standing under the laws of the State of Delaware and each other
      jurisdiction where the nature of its business or properties requires its
      qualification to do business, (ii) the execution, delivery and performance
      of the Transaction Agreements are within the Company's corporate powers
      and have been duly authorized by all necessary corporate action and (iii)
      all Governmental Approvals have been obtained.

	
      We have assumed
      that: (i) the conduct of the parties to the Transaction Agreements
      complies with any requirement of good faith, fair dealing and
      conscionability; (ii) there has not been any mutual mistake of fact or
      misunderstanding, fraud, duress or undue influence; and (iii) all
      statutes, judicial and administrative decisions, and rules and regulations
      of governmental agencies applicable to our opinions are generally
      available to lawyers practicing in New York and are in a format that makes
      legal research feasible assuming the use of research technology generally
      available to and utilized by large, national law firms headquartered in
      New York, New York.

	
      Our opinions are
      subject to the effect of (i) laws relating to bankruptcy, reorganization,
      insolvency, receivership, moratorium, fraudulent conveyance, or other
      similar laws now or hereafter in effect relating to or limiting creditors
      rights generally, (ii) the application of general principles of equity
      (regardless of whether such enforceability is considered in a proceeding
      in equity or at law), and (iii) the availability of specific performance,
      injunctive relief, or any other equitable remedy being subject to the
      discretion of a court of competent jurisdiction.

	
      We express no
      opinion as to Section (i) 2.13 of the Credit Agreement insofar as it
      provides that any Lender purchasing a participation from another Lender
      pursuant thereto may exercise setoff or similar rights with respect to
      such participation and (ii) the effect of the law of any jurisdiction
      other than the State of New York wherein any Lender may be located or
      wherein enforcement of the Credit Agreement or the Notes may be sought
      that limits the rates of interest legally chargeable or collectible.

	
      No opinion is
      given with respect to the effect of any (i) federal or state securities
      laws or regulations, (ii) antitrust or unfair competition laws or
      regulations, (iii) pension or employment benefit laws or regulations or
      (iv) construction, environmental, subdivision, zoning, health, safety or
      land use laws or regulations.




This opinion is being furnished
to you as of the date hereof and we assume no obligation to advise you of
changes that may hereafter be brought to our attention. This opinion is being
furnished only to you in connection with the Transaction Agreements and is
solely for your benefit and is not to be used, circulated, quoted or otherwise
referred to for any other purpose or relied upon by any other person or entity
for any purpose without our prior written consent; provided, that each
assignee of a Lender under the Credit Agreement pursuant to

Section 8.07 thereof may
rely on this opinion with the same effect as if it were originally addressed to
such assignee as of the date hereof.


  
    
      
        
          
            Very truly yours,

            KATTEN MUCHIN ZAVIS ROSENMAN

          

        

      

    

  






 

EXHIBIT E - TERMS OF

SUBORDINATION

TERMS OF SUBORDINATION*


SECTION 1. Subordination to
Superior Debt. The Borrower and the lender of the SRAC Subordinated Debt
(the "Lender") agree for the benefit of the holders of the
Superior Debt that the SRAC Subordinated Debt shall, to the extent hereinafter
set forth, be subordinate and junior in right of payment to all Superior Debt of
the Borrower.

SECTION 2. Borrower Not to
Make Payments hereunder in Certain Circumstances. (a) Upon the maturity of
all or any part of the Superior Debt by lapse of time, acceleration or
otherwise, such Superior Debt shall first be paid in full, or such payment shall
be duly provided for in cash or in a manner satisfactory to the holders of such
Superior Debt, before any payment by the Borrower or any Subsidiary is made on
account of the principal of or premium, if any, or interest on the notes issued
hereunder (the "SRAC Subordinated Notes") or to acquire any of
the SRAC Subordinated Notes or on account of any sinking fund for the SRAC
Subordinated Notes.

(b) In the event and during
  the continuation of any Default (as such term is defined in the Credit
  Agreement, provided that any such event or condition that would become an
  Event of Default only upon both the giving of notice of such event or
  condition by the Agent to the Borrower and the lapse of time shall constitute
  such an event or condition for purposes of this Agreement only if the Agent
  shall have given such notice to the Borrower) with respect to any Superior
  Debt (each such Event of Default or any such event or condition that, with the
  giving of notice or the lapse of time, or both, being referred to in this
  Agreement as a "Superior Debt Default"), (i) no payment shall
  be made by the Borrower or any Subsidiary on or with respect to the principal
  of, or, premium, if any, or interest on, the SRAC Subordinated Notes or to
  acquire any SRAC Subordinated Notes or on account of any sinking fund for the
  SRAC Subordinated Notes unless and until such Superior Debt Default shall have
  been remedied, nor shall any such payment be made if after giving effect, as
  if paid, to such payment, any Superior Debt Default would exist and (ii) no
  holder of SRAC Subordinated Notes shall demand, accept or receive, any direct
  or indirect payment (in cash or property or by setoff, exercise of contractual
  or statutory rights or otherwise) of or on account of any SRAC Subordinated
  Notes, notwithstanding the terms of the SRAC Subordinated Notes or of any
  agreement or instrument which governs the SRAC Subordinated Notes, and no such
  payment shall be due.

  (c) Unless and until all
  principal of, premium, if any, and interest on, and all other obligations of
  the Borrower under, the Superior Debt shall have been paid in full, no holder
  of SRAC Subordinated Notes will commence or maintain any action, suit or any
  other legal or equitable proceeding against the Borrower, or join with any
  creditor in any such proceeding, under any insolvency, bankruptcy,
  receivership, liquidation, reorganization or other similar law, unless the
  holders of Superior Debt shall also join in bringing such proceeding, provided
  that this Section 2(c) shall not prohibit a holder of SRAC Subordinated Notes
  from filing a proof of claim or otherwise participating in any such proceeding
  not commenced by it.


SECTION 3. SRAC Subordinated
Notes Subordinated to Prior Payment of all Superior Debt on Dissolution,
Liquidation or Reorganization of Borrower. In the event of any insolvency or
bankruptcy proceedings, and any receivership, liquidation, reorganization or
other similar proceedings in connection therewith, relative to the Borrower or
to its creditors, in their capacity as creditors of the Borrower, or to
substantially all of its property, and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of the Borrower, whether
or not involving insolvency or bankruptcy, then:

(a) the holders of all
  Superior Debt shall first be entitled to receive payment in full of the
  principal thereof, premium, if any, interest and all other amounts payable
  thereon (accruing before and after the commencement of the proceedings) before
  the holders of the SRAC Subordinated Notes are entitled to receive any payment
  on account of the principal of, premium, if any, or interest on the SRAC
  Subordinated Notes; and

  (b) all SRAC Subordinated
  Notes shall forthwith (notwithstanding the terms of Section 2) become due and
  payable and any payment or distribution of assets of the Borrower of any kind
  or character, whether in cash, property or securities to which the holders of
  the SRAC Subordinated Notes would be entitled, but for the provisions of these
  Terms of Subordination, shall be paid or distributed by the liquidating
  trustee or agent or other person making such payment or distribution, whether
  a trustee in bankruptcy, a receiver or liquidating trustee or other trustee or
  agent, directly to the Agent or any other representative on behalf of the
  holders of Superior Debt, to the extent necessary to make payment in full of
  all principal, premium, if any, interest and all other amounts payable on all
  Superior Debt remaining unpaid, after giving effect to any concurrent payment
  or distribution to the holders of the Superior Debt.


SECTION 4. Rights of Holders
of Superior Debt; Subrogation. (a) Should any payment or distribution or
security or the proceeds of any thereof be collected or received by any holder
of SRAC Subordinated Notes in respect of the SRAC Subordinated Notes, and such
collection or receipt is prohibited hereunder prior to the payment in full of
the Superior Debt, such holder will forthwith deliver the same to the Agent for
the equal and ratable benefit of the holders of the Superior Debt in precisely
the form received (except for the endorsement or the assignment of or by such
holder where necessary) for application to payment of all Superior Debt in full,
after giving effect to any concurrent payment or distribution to the holders of
Superior Debt and, until so delivered, the same shall be held in trust by such
holder as the property of the holders of the Superior Debt.

(b) All payments and
  distributions received by the Agent in respect of the SRAC Subordinated Notes,
  to the extent received in or converted into cash, may be applied by the Agent
  first to the payment of any and all reasonable out-of-pocket expenses
  (including attorney's fees and legal expenses) paid or incurred by the Agent
  or such representative in enforcing the provisions hereof or in endeavoring to
  collect or realize upon the SRAC Subordinated Notes or any security therefor,
  and any balance thereof shall, solely as between any holder of the SRAC
  Subordinated Notes, on the one hand, and the holders of the Superior Debt, on
  the other hand, be applied by the Agent in such order of application as the
  Agent may from time to time select, toward the payment of the Superior Debt
  remaining unpaid.

  (c) No holder of SRAC
  Subordinated Notes shall be subrogated to the rights of the holders of the
  Superior Debt to receive payments or distributions of assets of the Borrower
  until all amounts payable with respect to the Superior Debt shall be paid in
  full; and, for the purposes of such subrogation, no payments or distributions
  to the holders of the Superior Debt of any cash, property or securities to
  which any holder of SRAC Subordinated Notes would be entitled except for these
  provisions shall, as between the Borrower, its creditors other than the
  holders of the Superior Debt, and such holders of SRAC Subordinated Notes, be
  deemed to be a payment by the Borrower to or on account of the Superior Debt.
  The provisions of this Agreement are and are intended solely for the purpose
  of defining the relative rights of holders of SRAC Subordinated Notes, on the
  one hand, and the holders of the Superior Debt, on the other hand.

  (d) Subject to the payment in
  full of all Superior Debt, the holders of the SRAC Subordinated Notes shall be
  subrogated (equally and ratably with the holders of all subordinated
  indebtedness of the Borrower which, by its terms, is not superior in right of
  payment to the SRAC Subordinated Notes, and ranks on a parity with the SRAC
  Subordinated Notes) to the rights of the holders of Superior Debt to receive
  payments or distributions of cash, property or securities of the Borrower
  applicable to the Superior Debt until all amounts owing on the SRAC
  Subordinated Notes shall be paid in full. For purposes of such subrogation, no
  payments or distributions to the holders of the SRAC Subordinated Notes of
  cash, property, securities or other assets by virtue of the subrogation herein
  provided which otherwise would have been made to the holders of the Superior
  Debt shall, as between the Borrower, its creditors other than the holders of
  Superior Debt and the holders of the SRAC Subordinated Notes, be deemed to be
  a payment to or on account of the SRAC Subordinated Notes. The holders of SRAC
  Subordinated Notes agree that, in the event that all or any part of any
  payment made on account of the Superior Debt is recovered from the holders of
  Superior Debt as a preference, fraudulent transfer or similar payment under
  any bankruptcy, insolvency or similar law, any payment or distribution
  received by the holders of SRAC Subordinated Notes on account of the SRAC
  Subordinated Notes at any time after the date of the payment so recovered,
  whether pursuant to the right of subrogation provided for in this Section 4(d)
  or otherwise, shall be deemed to have been received by such holders of SRAC
  Subordinated Notes in trust as the property of the holders of the Superior
  Debt and such holders shall forthwith deliver the same to the Agent for the
  equal and ratable benefit of the holders of the Superior Debt for application
  to payment of all Superior Debt in full.


SECTION 5. Renewals,
Extensions and Increases of Superior Debt. Each holder of SRAC Subordinated
Notes by his acceptance thereof thereby waives any and all notice of renewal,
extension, accrual or increase in the amount of any of the Superior Debt,
present or future, and agrees and consents that without notice to or assent by
any holder or holders of the SRAC Subordinated Notes:

(i) the obligation and
    liabilities of the Borrower or any other party or parties for or upon the
    Superior Debt (or any promissory note, security document or guaranty
    evidencing or securing the same) may, from time to time, in whole or in
    part, be renewed, extended, increased, modified, amended, accelerated,
    compromised, supplemented, terminated, sold, exchanged, waived or released;

    (ii) the Agent or any other
    representative acting on behalf of the holders of the Superior Debt and the
    holders of the Superior Debt may exercise or refrain from exercising any
    right, remedy or power granted by or in connection with any agreements
    relating to the Superior Debt; and

    (iii) any balance or
    balances of funds with any holders of the Superior Debt at any time standing
    to the credit of the Borrower may, from time to time, in whole or in part,
    be surrendered or released;

  

all as the Agent or any other
representative or representatives acting on behalf of the holders of the
Superior Debt and the holders of the Superior Debt may deem advisable and all
without impairing, abridging, diminishing, releasing or affecting the
subordination of the SRAC Subordinated Notes to the Superior Debt provided for
herein.

SECTION 6. Obligation of
Borrower Unconditional. Nothing contained in these Terms of Subordination or
in the SRAC Subordinated Notes is intended to or shall impair, as between the
Borrower, its creditors other than the holders of the Superior Debt, and the
holders of the SRAC Subordinated Notes, the obligation of the Borrower, which is
absolute and unconditional, to pay to the holders of the SRAC Subordinated Notes
the principal of, premium, if any, and interest on the SRAC Subordinated Notes,
as and when the same shall become due and payable (except as provided in Section
2), by lapse of time, acceleration or otherwise, in accordance with their terms,
or is intended to or shall affect the relative rights of the holders of the SRAC
Subordinated Notes and other creditors of the Borrower other than the holders of
the Superior Debt, nor shall anything herein or therein prevent the trustee or
the holder of any SRAC Subordinated Notes (i) from taking all appropriate
actions to preserve its rights under the SRAC Subordinated Notes not
inconsistent with the rights of the holders of the Superior Debt under these
Terms of Subordination, or (ii) from exercising all remedies otherwise permitted
by applicable law upon default under the SRAC Subordinated Notes, subject to the
rights, if any, of the holders of the Superior Debt under Section 2 of these
Terms of Subordination and in respect of cash, property or securities of the
Borrower otherwise payable or delivered to such holders of SRAC Subordinated
Notes upon the exercise of any such remedy.

SECTION 7. Miscellaneous.
Each holder of SRAC Subordinated Notes by its acceptance thereof thereby
acknowledges and agrees that the holders of the Superior Debt have relied upon
and will continue to rely upon the subordination provided for herein in entering
into the agreements relating to Superior Debt and in extending credit to the
Borrower pursuant thereto.

(b) No present or future
  holder of Superior Debt shall be prejudiced in his right to enforce the
  subordination contained herein in accordance with the terms hereof by any act
  or failure to act on the part of the Borrower or any holder of the SRAC
  Subordinated Notes. The subordination provisions contained herein are for the
  benefit of the holders of the Superior Debt from time to time and, so long as
  Superior Debt is outstanding under any agreement, may not be rescinded,
  cancelled or modified in any way without the prior written consent thereto of
  all holders of Superior Debt.

  (c) The subordination
  provisions hereof shall be binding upon any holder of the SRAC Subordinated
  Notes and upon the heirs, legal representatives, successors and assigns of any
  holder of the SRAC Subordinated Notes; and, to the extent that any holder of
  the SRAC Subordinated Notes is either a partnership or a corporation, all
  references herein to any holder of the SRAC Subordinated Notes shall be deemed
  to include any successor or successors, whether immediate or remote, to such
  partnership or corporation.

  (d) These Terms of
  Subordination shall be construed in accordance with and governed by the laws
  of the State of New York.




 

EXECUTION COPY

U.S. $3,500,000,000


364-DAY CREDIT AGREEMENT


Dated as of February 24, 2003

Among


SEARS ROEBUCK ACCEPTANCE CORP.

as
Borrower


and


THE INITIAL LENDERS NAMED HEREIN

as
Initial Lenders


and


BANK ONE, NA

as
Syndication Agent


and


BARCLAYS BANK PLC


and


BANK OF AMERICA, N.A.

as
Documentation Agents


and


SALOMON SMITH BARNEY INC.


and


BANC ONE CAPITAL MARKETS, INC.

as
Joint Lead Arrangers and Joint Bookrunners


and


CITIBANK, N.A.

as Administrative Agent




 

TABLE OF CONTENTS


 



	
      ARTICLE I
	
	 	 	
	 	
      SECTION 1.01. Certain Defined Terms
	1
	 	
      SECTION 1.02. Computation of Time Periods
	10
	 	
      SECTION 1.03. Accounting Terms
	10
	
      ARTICLE II
	
	 	
      SECTION 2.01. The Advances
	11
	 	
      SECTION 2.02. Making the Advances
	11
	 	
      SECTION 2.03. Fees
	12
	 	
      SECTION 2.04. Termination or Reduction of
      the Commitments
	12
	 	
      SECTION 2.05. Repayment of Advances
	12
	 	
      SECTION 2.06. Interest on Advances
	12
	 	
      SECTION 2.07. Interest Rate Determination
	13
	 	
      SECTION 2.08. Optional Conversion of
      Advances
	14
	 	
      SECTION 2.09. Prepayments of Advances
	14
	 	
      SECTION 2.10. Increased Costs
	14
	 	
      SECTION 2.11. Illegality
	14
	 	
      SECTION 2.12. Payments and Computations
	15
	 	
      SECTION 2.13. Taxes
	15
	 	
      SECTION 2.14. Sharing of Payments, Etc.
	17
	 	
      SECTION 2.15. Use of Proceeds
	17
	 	
      SECTION 2.16. Increase in the Aggregate
      Commitments
	17
	 	
      SECTION 2.17. Extension of Termination
      Date
	18
	
      ARTICLE III
	
	 	
      SECTION 3.01. Conditions Precedent to
      Effectiveness of Section 2.01
	20
	 	
      SECTION 3.02. Conditions Precedent to Each
      Borrowing and Extension Date.
	21
	 	
      SECTION 3.03. Determinations Under Section
      3.01
	22
	
      ARTICLE IV
	
	 	
      SECTION 4.01. Representations and
      Warranties of the Borrower
	22
	
      ARTICLE V
	
	 	
      SECTION 5.01. Affirmative Covenants
	23
	 	
      SECTION 5.02. Negative Covenants
	25
	 	
      SECTION 5.03. Financial Covenants
	26
	
      ARTICLE VI
	
	 	
      SECTION 6.01. Events of Default
	27
	
      ARTICLE VII
	
	 	
      SECTION 7.01. Authorization and Action
	29
	 	
      SECTION 7.02. Agent's Reliance, Etc.
	29
	 	
      SECTION 7.03. Citibank and Affiliates
	29
	 	
      SECTION 7.04. Lender Credit Decision
	30
	 	
      SECTION 7.05. Indemnification
	30
	 	
      SECTION 7.06. Successor Agent
	30
	 	
      SECTION 7.07. Other Agents
	30
	
      ARTICLE VIII
	
	 	
      SECTION 8.01. Amendments, Etc.
	31
	 	
      SECTION 8.02. Notices, Etc.
	31
	 	
      SECTION 8.03. No Waiver; Remedies
	32
	 	
      SECTION 8.04. Costs and Expenses
	32
	 	
      SECTION 8.05. Right of Set-off
	33
	 	
      SECTION 8.06. Binding Effect
	33
	 	
      SECTION 8.07. Assignments and
      Participations
	33
	 	
      SECTION 8.08. Confidentiality
	35
	 	
      SECTION 8.09. Governing Law
	35
	 	
      SECTION 8.10. Execution in Counterparts
	35
	 	
      SECTION 8.11. Jurisdiction, Etc.
	36
	 	
      SECTION 8.12. Waiver of Jury Trial
	36



 


 


Schedules


Schedule I - List of Applicable
Lending Offices

Schedule 3.01(b) - Disclosed
Litigation

Schedule 5.02(a) - Existing
Liens


Exhibits


	
      Exhibit A
	
      -
	
      Form of Note

	
      Exhibit B
	
      -
	
      Form of Notice of Borrowing

	
      Exhibit C
	
      -
	
      Form of Assignment and Acceptance

	
      Exhibit D-1
	
      -
	
      Form of Opinion of Counsel for the
      Borrower (Sears Law Department)

	
      Exhibit D-2
	
      -
	
      Form of Opinion of Counsel for the
      Borrower (Katten Muchin Zavis Rosenman)

	
      Exhibit E
	
      -
	
      Terms of Subordination