**Exhibit 10**
GUARANTEE
     Sears, Roebuck and Co., a New York corporation (“Sears”), herebyirrevocably and unconditionally guarantees to the Lenders and the Agent (eachas defined below) under the 364-Day Credit Agreement dated as of February 24,2003 (as amended, extended or otherwise modified from time to time, the “CreditAgreement”) among Sears Roebuck Acceptance Corp., a Delaware corporation (the“Company”), various financial institutions that are parties thereto from timeto time (the “Lenders”) and Citibank, N.A., as agent for the Lenders (in suchcapacity, the “Agent”), that the principal of all Advances (as defined in theCredit Agreement) made under the Credit Agreement and all interest thereonshall be paid in full when due, whether at maturity, by acceleration orotherwise, subject to the terms stated below. Failing payment when due of anyamount so guaranteed, Sears shall be obligated to pay the same. In the eventof a default in the payment of principal of any Advance made under the CreditAgreement or any interest thereon, the Agent, on behalf of the Lenders, mayseek to enforce this Guarantee against Sears without first proceeding againstthe Company.
     No stockholder, officer, director or incorporator, as such, past, presentor future of Sears shall have any liability under this Guarantee by reason ofhis, her or its status as such stockholder, officer, director or incorporator.
     This Guarantee is a continuing guarantee and shall remain in full forceand effect and shall be binding upon Sears and its successors and assigns untilfull and final payment of all principal of any Advance made under the CreditAgreement and all interest thereon and shall inure to the benefit of thesuccessors and assigns of the Lenders and the Agent; provided that,notwithstanding any other provision of this Guarantee but subject to the secondparagraph following this paragraph, if at any time (a) no Default or Event ofDefault (each as defined in the Credit Agreement) exists and (b) there are noother outstanding guarantees by Sears of Debt (as defined in the CreditAgreement) of the Company, then this Guarantee shall immediately terminate andbe of no further force or effect (and the Agent shall, upon the request and atthe expense of Sears, execute and deliver such documents as Sears mayreasonably request to evidence such termination).
     Sears hereby agrees that its obligations with regard to this Guaranteeshall be unconditional, irrespective of any circumstances which might otherwiseconstitute a legal or equitable defense of a guarantor. To the extentpermitted by law, Sears hereby waives (a) any defense that may arise by reasonof the incapacity, lack of authority, death or disability of any other personor the failure of the Agent, the Lenders or the Company (each a “BenefittedParty”) to file or enforce a claim against the estate (in administration,bankruptcy or any other proceeding) of any other person, (b) notice of theexistence, creation or incurring of any new or additional indebtedness orobligation, (c) any defense based upon an election of remedies by a BenefittedParty, including but not limited to an election law which provides that theobligation of a surety must be neither larger in amount nor in other respectsmore burdensome than that of the principal, (d) any defense arising because ofa Benefitted Party’s election, in any proceeding instituted under Federalbankruptcy law, of the application of 11 U.S.C. Section 1111(b)(2) or (e) anydefense based on any borrowing or grant of a security interest under 11 U.S.C.Section 364.
 

 

     If any Lender or the Agent is required by any court or otherwise to returnto either the Company or Sears, or any custodian acting in relation to eitherthe Company or Sears, any amount paid by the Company or Sears to the Agent orsuch Lender, this Guarantee, to the extent theretofore discharged, shall bereinstated in full force and effect.
     Sears agrees that it shall not be entitled to any right of subrogation inrelation to the Lenders or the Agent in respect of any obligations guaranteedhereby until payment in full of all obligations guaranteed hereby.
     In the event of any transfer or assignment of rights by any Lender or theAgent in accordance with the terms of the Credit Agreement, the rights andprivileges herein conferred upon that party shall automatically extend to andbe vested in such transferee or assignee, all subject to the terms andconditions hereof. This is a guarantee of payment, not of collectibility.
     Sears acknowledges that it will receive direct and indirect benefits fromthe financing arrangements contemplated by the Credit Agreement. Sears herebyconfirms that it is its intention that this Guarantee not constitute afraudulent transfer or conveyance for purposes of any Federal bankruptcy law,the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act orany similar Federal, state or foreign law to the extent applicable to thisGuarantee (the “Applicable Laws”). In the event that this Guarantee wouldconstitute or result in a violation of any Applicable Law, the liability ofSears under this Guarantee shall be reduced to the maximum amount permissibleunder such Applicable Law.
     This Guarantee shall be governed in accordance with the laws of the Stateof New York.
     IN WITNESS WHEREOF, Sears has caused this Guarantee to be executed by itsduly authorized representative.     January 26, 2004 SEARS, ROEBUCK AND CO.