PRICING AGREEMENT
Exhibit 1(b)
February 7, 2003
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Barney Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
UBS Warburg LLCBanc of America Securities LLC
Deutsche Bank Securities Inc.
RBC Xxxx Xxxxxxxx Inc.
Xxxxxx Brothers Inc.
McDonald Investments Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Wachovia Securities, Inc.
Xxxxx Fargo Investment Services, LLC
As Representatives of and on behalf of
the several Underwriters named in Schedule I hereto
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx |
c/o Xxxxxxx Xxxxx Barney Inc. |
Dear Sirs:
Sears Xxxxxxx Acceptance Corp., a Delaware corporation (the "Company"), proposes subject to the terms and conditions stated herein and in the Underwriting Agreement, dated February 7, 2003 (the "Underwriting Agreement"), executed between the Company and Sears, Xxxxxxx and Co. ("Sears"), on the one hand, and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxxx Xxxxx Barney Inc., Xxxxxx Xxxxxxx & Co. Incorporated, UBS Warburg LLC, Banc of America Securities LLC, Deutsche Bank Securities Inc., RBC Xxxx Xxxxxxxx Inc., Xxxxxx Brothers Inc., McDonald Investments Inc., U.S. Bancorp Xxxxx Xxxxxxx Inc., Wachovia Securities, Inc., and Xxxxx Fargo Investment Services, LLC as representatives of and on behalf of the several Underwriters named in Schedule I hereto (the "Representatives"), on the other hand, to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Securities specified in Schedule II hereto (the "Designated Securities"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and, except where otherwise specified, as of the date of this Pricing Agreement and the Time of Delivery, except that (i) each representation and warranty with respect to the Registration Statement in Sections 2 and 3 of the Underwriting Agreement shall be deemed to be a representation and warranty as of the date of the Underwriting Agreement and the Time of Delivery, and (ii) each representation and warranty with respect to the Prospectus in Sections 2 and 3 of the Underwriting Agreement shall be deemed to be a representation and warranty as of (a) the date of the Underwriting Agreement and as of the Time of Delivery in relation to the Prospectus (as therein defined) and (b) the date of this Pricing Agreement and as of the Time of Delivery in relation to the Prospectus as amended or supplemented. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission.
The Company hereby grants the Representatives, on behalf of the Underwriters, an option to purchase up to $37,500,000 of Designated Securities (the "Option Securities"), for the sole purpose of covering overallotments in the sale of the $250,000,000 aggregate principal amount of the Designated Securities (the "Underwritten Securities"). Such option shall be exercisable in increments of $25, by delivering written notice to the Company and Sears no later than 12:00 noon, Chicago time, on March 14, 2003, specifying the aggregate principal amount of Option Securities to be purchased and the date on which such Option Securities are to be delivered, as determined by the Representatives but in no event earlier than February 12, 2003 or, unless the Representatives and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. The principal amount of Option Securities to be purchased by each Underwriter shall be the same percentage of the total principal amount of Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten securities, subject to such adjustments as the Representatives in their absolute discretion shall make to eliminate any Option Securities in a principal amount of less than $25. The purchase price to the Representatives for the Option Securities acquired upon exercise of the option shall be 96.85% of the principal amount of the Option Securities so acquired. References in the Underwriting Agreement to Time of Delivery shall be deemed to refer to each date on which Option Securities are to be purchased by the Underwriters, and references therein to Designated Securities shall be deemed to include the Option Securities.
Subject to the terms and conditions set forth in Schedule II hereto and in the Underwriting Agreement, the Underwriters agree to reimburse the Company for expenses up to an amount of $75,000.00 incident to the Company's obligations under the Underwriting Agreement and this Pricing Agreement.
If the foregoing is in accordance with your understanding, please sign and return to us two counterparts hereof, and upon acceptance hereof by you on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between the Company, Sears and each of the Underwriters. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be supplied to the Company upon request. You represent that you are authorized on behalf of yourselves and on behalf of each of the other Underwriters named in Schedule I hereto to enter into this Agreement.
Very truly yours, |
|
Sears Xxxxxxx Acceptance Corp. |
|
By: /s/ Xxxxx X. Xxxxx |
|
Sears, Xxxxxxx and Co. |
|
By: /s/ Xxxxx X. Xxxxxxx |
Accepted as of the date hereof:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx Barney Inc.
Xxxxxx Xxxxxxx & Co. Incorporated
UBS Warburg LLC
Banc of America Securities LLC
Deutsche Bank Securities Inc.
RBC Xxxx Xxxxxxxx Inc.
Xxxxxx Brothers Inc.
McDonald Investments Inc.
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Wachovia Securities, Inc.
Xxxxx Fargo Investment Services, LLC
By: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: /s/ Perry Hall
Name: Perry Hall
Title: Director
By: Xxxxxxx Xxxxx Xxxxxx Inc.
By: /s/ J. Xxxxxxx Xxxxx
Name: J. Xxxxxxx Xxxxx
Title: Managing Director
As Representatives of and on behalf of
the several Underwriters named in Schedule I hereto
SCHEDULE I
Principal amount of Designated |
|
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated |
43,875,000 |
Xxxxxxx Xxxxx Barney Inc. |
43,875,000 |
Xxxxxx Xxxxxxx & Co. Incorporated |
43,750,000 |
UBS Warburg LLC |
43,750,000 |
Banc of America Securities LLC |
7,500,000 |
Deutsche Bank Securities Inc. |
7,500,000 |
RBC Xxxx Xxxxxxxx Inc. |
7,500,000 |
Xxxxxx Brothers Inc. |
3,750,000 |
McDonald Investments Inc. |
3,750,000 |
U.S. Bancorp Xxxxx Xxxxxxx Inc. |
3,750,000 |
Wachovia Securities, Inc. |
3,750,000 |
Xxxxx Fargo Investment Services, LLC |
3,750,000 |
X.X. Xxxxxxx & Sons, Inc. |
1,500,000 |
Bank One Capital Markets, Inc. |
1,500,000 |
Bear, Xxxxxxx & Co. Inc. |
1,500,000 |
Xxxxxxx Xxxxxx & Co., Inc. |
1,500,000 |
CIBC World Markets Corp. |
1,500,000 |
Fifth Third Securities, Inc. |
1,500,000 |
Xxxxxxx, Sachs & Co. |
1,500,000 |
H&R Block Financial Advisors, Inc. |
1,500,000 |
HSBC Securities (USA) Inc. |
1,500,000 |
J.J.B. Xxxxxxxx , X.X. Xxxxx, Inc. |
1,500,000 |
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated |
1,500,000 |
NatCity Investments, Inc. |
1,500,000 |
Prudential Securities Incorporated |
1,500,000 |
Quick & Xxxxxx, Inc. |
1,500,000 |
TD Securities (USA) Inc. |
1,500,000 |
Advest, Inc. |
500,000 |
BB&T Capital Markets, A division of Xxxxx & Xxxxxxxxxxxx, Inc. |
500,000 |
Xxxxxxxx & Partners, L.P. |
500,000 |
X.X. Xxxx & Associates, Inc. |
500,000 |
X.X. Xxxxxxxx & Co. |
500,000 |
Xxxxxxxxx & Company LLC |
500,000 |
Xxxxxxxxxx & Co. Inc. |
500,000 |
Xxxxxx, Xxxxx Xxxxx Inc. |
500,000 |
Xxxxxx & Company |
500,000 |
Xxxxxx Xxxxxxxxxx Xxxxx LLC |
500,000 |
Mesirow Financial, Inc. |
500,000 |
Xxxxxx Xxxxxx & Company, Inc. |
500,000 |
Pershing Trading Company, L.P. |
500,000 |
Xxxxxx X. Xxxxxxx & Co., Inc. |
500,000 |
Xxxxxxx Xxxxx & Associates, Inc. |
500,000 |
Xxxxxx X. Xxxxx & Co. Incorporated |
500,000 |
Xxxx, Xxxx & Co., LLC |
500,000 |
Southwest Securities, Inc. |
500,000 |
Xxxxxx, Xxxxxxxx & Company, Incorporated |
500,000 |
Xxxxxxxx Capital Partners, L.P. |
500,000 |
Xxxxxxx Xxxxx & Company, L.L.C. |
500,000 |
The Xxxxxxxx Capital Group, L.P. |
500,000 |
Total |
250,000,000 |
SCHEDULE II
Title of Designated Securities:
7.40% Notes due February 1, 2043
Principal amount of Designated Securities offered:
Underwritten Securities: $250,000,000
Option Securities: Up to an additional $37,500,000
Denominations:
$25
Price to Public:
100% of the principal amount of
the Designated Securities
Purchase Price by Underwriters:
96.85% of the principal amount of the Designated Securities, plus accrued interest from February 12, 2003 to the Time of Delivery
Indenture:
Indenture, dated as of October 1, 2002, between
the Company and BNY Midwest Trust Company, as Trustee
Form of Designated Securities:
Global form only
Maturity:
February 1, 2043
Interest Rate:
7.40%
Interest Payment Dates:
February 1, May 1, August 1 and November 1
Redemption Provisions:
Incorporated by reference to the attached Form of Note
Sinking Fund Provisions:
None
Time of Delivery:
8:00 A.M., Chicago time, February 12, 2003
Funds in which payment by Underwriters to Company to be made:
Immediately available funds
Method of Payment:
Wire transfer to XX Xxxxxx Chase Bank, ABA No. 000000000, for the Account of Sears Xxxxxxx Acceptance Corp., Account No. 9102587590
Closing Location:
Hoffman Estates, Illinois
Delayed Delivery:
None
Counsel:
To the Company and Sears:
- Xxxxxx X. Xxxx, Vice President, Deputy General Counsel and Acting General Counsel, Sears, Xxxxxxx and Co.
- Mayer, Brown, Xxxx & Maw, special counsel to the Company and Sears
To the Underwriters:
- Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Other Terms:
For purposes of this Pricing Agreement only, Section 7 of the Underwriting Agreement shall be amended in the following manner. The following Section 7(c) shall be added:
"(c) To use its commercially reasonable best efforts to ensure that the Designated Securities will be listed and posted for trading on the New York Stock Exchange within thirty days of the Time of Delivery."