SEARS HOLDINGS CORP (Form: 8-K, Received: 02/13/2018 16:13:55)

SEARS HOLDINGS CORPORATION

Dated: February 13, 2018

/s/ Robert A. Riecker

Robert A. Riecker

Chief Financial Officer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 7, 2018

SEARS HOLDINGS CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

000-51217, 001-36693

20-1920798

(Commission

File Number)

(I.R.S. Employer

Identification No.)

3333 Beverly Road

Hoffman Estates, Illinois 60179

(Address Of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, Including Area Code: (847) 286-2500

(Former Name or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐	Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry Into a Material Definitive Agreement

Amendment to Credit Agreement

On February 7, 2018, Sears Holdings Corporation (the “Company”) and Sears Roebuck Acceptance Corp. and Kmart Corporation (collectively, the “Borrowers”) entered into a fourth amendment (the “Credit Agreement Amendment”) to the Third Amended and Restated Credit Agreement, dated as of July 21, 2015 (as in effect prior to the Credit Agreement Amendment, the “Credit Agreement”), with the lenders party thereto, the issuing lenders party thereto, Bank of America, N.A., as administrative agent and co-collateral agent, and Wells Fargo Bank, National Association, as co-collateral agent.

The Credit Agreement Amendment, among other things, increased the size of the general debt basket to $1.25 billion.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Credit Agreement Amendment, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.

Amendment to Second Lien Credit Agreement

On February 7, 2018, the Company, the Borrowers and certain other subsidiaries of the Company entered into a third amendment (the “Second Lien Amendment”) to the Second Lien Credit Agreement, dated as of September 1, 2016 (as in effect prior to the Second Lien Amendment, the “Second Lien Credit Agreement”), with the lenders party thereto and JPP, LLC, as administrative agent and collateral administrator.

The Second Lien Amendment, among other things, increased the maximum aggregate principal of the uncommitted line of credit facility established under the Second Lien Credit Agreement to $600 million, extended the maximum duration of line of credit loans to 270 days and increased the size of the general debt basket to $1.25 billion.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Second Lien Amendment, a copy of which is filed herewith as Exhibit 10.2 and is incorporated by reference herein.

Amendment to Term Loan Credit Agreement

On February 7, 2018, the Company, the Borrowers and certain other subsidiaries of the Company entered into a third amendment (the “Term Loan Amendment”) to the Term Loan Credit Agreement, dated as of January 4, 2018 (as in effect prior to the Term Loan Amendment, the “Term Loan Credit Agreement”), with the lenders party thereto and JPP, LLC, as administrative agent and collateral administrator.

The Term Loan Amendment, among other things, increased the size of the general debt basket to $1.25 billion.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Term Loan Amendment, a copy of which is filed herewith as Exhibit 10.3 and is incorporated by reference herein.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The disclosure required by this item is included in Item 1.01 and is incorporated herein by reference.

Private Securities Litigation Reform Act of 1995 –

A Caution Concerning Forward-Looking Statements

This Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions that these forward-looking statements are subject to risks, uncertainties and assumptions, many of which are beyond its control, that may cause actual results to differ materially from those indicated in the forward-looking statements for a number of reasons, including, without limitation, risks and uncertainties relating to the Credit Agreement Amendment, the Second Lien Amendment and the Term Loan Amendment. Additional information concerning other factors is contained in the Company’s most recent annual report on Form 10-K and subsequent filings with the SEC. The Company intends these forward-looking statements to speak only as of the time made and, except as required by law, does not undertake to update or revise them as more information becomes available.

Item 9.01

Financial Statements and Exhibits

(d) Exhibits

Exhibit 10.1 Fourth Amendment to Third Amended and Restated Credit Agreement, dated as of February 7, 2018, among Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation, as borrowers, the lenders party thereto, the issuing lenders party thereto, Bank of America, N.A., as administrative agent and collateral agent, and Wells Fargo Bank, National Association, as co-collateral agent.

Exhibit 10.2 Third Amendment to Second Lien Credit Agreement, dated as of February 7, 2018, among Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation, as borrowers, the subsidiaries of Sears Holdings Corporation party thereto, the lenders party thereto, and JPP, LLC, as administrative and collateral administrator.

Exhibit 10.3 Third Amendment to Term Loan Credit Agreement, dated as of February 7, 2018, among Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation, as borrowers, the subsidiaries of Sears Holdings Corporation party thereto, the lenders party thereto, and JPP, LLC, as administrative and collateral administrator.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 10.1

EXECUTION VERSION

FOURTH AMENDMENT TO

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

FOURTH AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “ Amendment ”), dated as of February 7, 2018, between:

SEARS HOLDINGS CORPORATION, a Delaware corporation (“ Holdings ”),

SEARS ROEBUCK ACCEPTANCE CORP., a Delaware corporation, and KMART CORPORATION, a Michigan corporation (the “ Borrowers ”),

the Lenders party hereto,

the Issuing Lenders,

the Co-Collateral Agents, and

BANK OF AMERICA, N.A., as Administrative Agent (the “ Agent ”),

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H :

WHEREAS, Holdings, the Borrowers, the Lenders party thereto, the Co-Collateral Agents party thereto, and the Agent, among others, are party to that certain Third Amended and Restated Credit Agreement, dated as of July 21, 2015, as amended pursuant to that certain First Amendment to Third Amended and Restated Credit Agreement, dated as of April 8, 2016, that certain Second Amendment to Third Amended and Restated Credit Agreement, dated as of February 10, 2017, and that certain Third Amendment to Third Amended and Restated Credit Agreement, dated as of December 12, 2017 (the “ Existing Credit Agreement ”; the Existing Credit Agreement as amended hereby, the “ Amended Credit Agreement ”);

WHEREAS, Holdings, the Borrowers, the Lenders party hereto, the Issuing Lenders, the Co-Collateral Agents, and the Agent have agreed to amend the Existing Credit Agreement on the terms and subject to the conditions set forth below.

NOW THEREFORE, in consideration of the mutual promises and agreements herein contained, the parties hereto hereby agree as follows:

1.	Incorporation of Terms. All capitalized terms not otherwise defined herein shall have the same meaning as in the Existing Credit Agreement.

2.	Representations and Warranties .

Each Borrower hereby represents and warrants that:

no Default or Event of Default exists under the Existing Credit Agreement or under any other Loan Document as of the date hereof; and

ii.

all representations and warranties contained in the Amended Credit Agreement and the other Loan Documents are true and correct in all material respects as of the date hereof, except to the extent that (A) such representations or warranties are qualified by a materiality standard, in which case they are true and correct in all respects, and (B) such representations or warranties expressly relate to an earlier date (in which case such representations and warranties are true and correct in all material respects as of such earlier date).

Each of Holdings and each Borrower hereby represents and warrants that:

such Loan Party (A) is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and (B) is in compliance with all Requirements of Law except to the extent that the failure to comply therewith could not, in the aggregate, reasonably be expected to have a Material Adverse Effect;

ii.

the execution and delivery by such Loan Party of this Amendment and the performance by such Loan Party of its obligations under this Amendment and the Amended Credit Agreement, and the consummation of the transactions contemplated by this Amendment and the Amended Credit Agreement, are within such Loan Party’s powers, have been duly authorized by all necessary organizational action, and do not contravene (A) the charter or by-laws or other organizational or governing documents of such Loan Party or (B) law or any contractual restriction binding on or affecting such Loan Party, except, for purposes of this clause (B), to the extent such contravention would not reasonably be expected to have a Material Adverse Effect;

iii.

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 such Loan Party of this Amendment or the Amended Credit Agreement that has not already been obtained if the failure to obtain such authorization, approval or other action could reasonably be expected to result in a Material Adverse Effect; and

iv.

this Amendment has been duly executed and delivered by such Loan Party. This Amendment and the Amended Credit Agreement constitute, and will constitute upon execution of this Amendment, the legal, valid and binding obligation of such Loan Party enforceable against such Loan Party in accordance with its respective terms subject to the effect of any applicable bankruptcy, insolvency, reorganization or moratorium or similar laws affecting the rights of creditors generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

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Release by Borrowers . Each Borrower hereby acknowledges and agrees that it has no actual knowledge of any defenses or claims against any Lender, any Issuing Lender, the Agent, the Co-Collateral Agents, any of their Affiliates, or any of their respective officers, directors, employees, attorneys, representatives, predecessors, successors, or assigns with respect to the Obligations, and that if such Borrower now has, or ever did have, any defenses or claims with respect to the Obligations against any Lender, any Issuing Lender, the Agent, the Co-Collateral Agents or any of their respective officers, directors, employees, attorneys, representatives, predecessors, successors, or assigns, whether known or unknown, at law or in equity, from the beginning of the world through this date and through the time of effectiveness of this Amendment, all of them are hereby expressly WAIVED , and each Borrower hereby RELEASES each Lender, each Issuing Lender, the Agent, the Co-Collateral Agents and their respective officers, directors, employees, attorneys, representatives, predecessors, successors, and assigns from any liability therefor.

4.	Amendments to Existing Credit Agreement . Each of the parties hereto agrees that, effective as of the Amendment Effective Date (as defined below), the Existing Credit Agreement shall be amended as follows:

The definition of “Debt Maturity Reserve” set forth in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:

““ Debt Maturity Reserve ” means an Availability Reserve (i) if (x) the Term Loan, the Senior Unsecured Notes, the Existing Second Lien Notes or any other Debt (other than the April 2016 Mortgage Debt) with a principal balance in excess of $50,000,000 (excluding Debt consisting of Short Term commercial paper or other Short Term Debt with an aggregate principal balance of $750,000,000 or less (whether incurred pursuant to clause (h) of the definition of Permitted Debt or that otherwise qualifies as Permitted Debt)), or, (y) solely to the extent that the Extended Termination Date of the Extended Revolving Commitments is further extended in accordance with the terms of Section 2.18 hereof to a date that is beyond the 2016 Term Loan Termination Date (as the 2016 Term Loan Termination Date may be extended in accordance with the terms of Section 2.18 hereof), the 2016 Term Loan, in each case remains outstanding on any date that is 91 days (or, solely in the case of the Existing Second Lien Notes outstanding on the Fourth Amendment Effective Date (without regard to any notes issued in exchange or replacement therefor, or in lieu thereof), 30 days) or fewer prior to the maturity date of such Debt (any such date under this clause (i), the “date of determination”), then an amount equal to the outstanding principal balance of such Debt, provided that such Debt Maturity Reserve shall be eliminated when such Debt is satisfied (including, if otherwise permissible hereunder, with the

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proceeds of an Advance in an amount up to the amount of the applicable Debt Maturity Reserve), refinanced, or the maturity thereof extended so as to be in excess of 91 days (or, solely in the case of the Existing Second Lien Notes outstanding on the Fourth Amendment Effective Date (without regard to any notes issued in exchange or replacement therefor, or in lieu thereof), 30 days) after such date of determination, (ii) if the April 2016 Mortgage Debt remains outstanding on any date that is 45 days or fewer prior to the maturity date of such Debt (any such date under this clause (ii), the “date of determination”), then an amount equal to the outstanding principal balance of such Debt, provided that such Debt Maturity Reserve shall be eliminated when such Debt is satisfied (including, if otherwise permissible hereunder, with the proceeds of an Advance in an amount up to the amount of the applicable Debt Maturity Reserve), refinanced, or the maturity thereof extended so as to be in excess of 45 days after such date of determination, and (iii) if any Debt consisting of Short Term commercial paper or other Short Term Debt (whether incurred pursuant to clause (h) of the definition of Permitted Debt or that otherwise qualifies as Permitted Debt) remains outstanding on any date that is 30 days or fewer prior to both (A) the maturity date of such Debt and (B) the latest Extended Termination Date (any such date under this clause (iii), the “date of determination”), then an amount equal to the outstanding principal balance of such Debt, provided that such Debt Maturity Reserve shall be eliminated when such Debt is satisfied (including, if otherwise permissible hereunder, with the proceeds of an Advance in an amount up to the amount of the applicable Debt Maturity Reserve), refinanced, or the maturity thereof extended so as to be in excess of 30 days after the date of determination or the latest Extended Termination Date is extended (if applicable), in any case so that the foregoing conditions are no longer satisfied.”.

Clause (h) of the definition of “Permitted Debt” set forth in Section 1.01 of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:

“(h) Other Debt in an amount not to exceed $1,250,000,000 in the aggregate outstanding at any time; provided that not more than $750,000,000 of such Debt shall consist of Short Term Debt (including, without limitation, Short Term commercial paper);”.

Section 1.01 of the Existing Credit Agreement is hereby amended by adding the following definition in alphabetical order:

“ Fourth Amendment Effective Date ” means the “Amendment Effective Date” as defined in the Fourth Amendment to Third Amended and Restated Credit Agreement, dated as of February 7, 2018, among Holdings, the Borrowers, the Lenders party thereto, the Issuing Lenders, the Co-Collateral Agents and the Agent.

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Section 2.04(d) of the Existing Credit Agreement is hereby amended by deleting the reference to the phrase “Section 2.08(a) or 2.08(c)” therein and replacing it with the phrase “Section 2.08(a) or 2.08(d)”.

Section 2.13 of the Existing Credit Agreement is hereby amended by deleting the reference to the phrase “or 2.08(c)(i)” immediately after the phrase “Sections 2.08(a)(i), 2.08(b)(i)” and replacing it with the phrase “, 2.08(c)(i) or 2.08(d)(i)”.

The first proviso to Section 3.01(a) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:

“ provided that no Issuing Lender shall have any obligation to issue any Letter of Credit if (i) after giving effect to such issuance, the L/C Obligations would exceed the L/C Commitment or (ii) the face amount of the requested Letter of Credit, when aggregated with all other then outstanding Extensions of Credit (excluding FILO Extensions of Credit), shall exceed the Line Cap at such time;”.

Section 3.04 of the Existing Credit Agreement is hereby amended by (i) deleting the reference to “Section 2.08(c)(i)” in Section 3.04(b) and replacing it with a reference to “Section 2.08(d)(i)” and (ii) deleting the reference to “Section 2.08(c)” in Section 3.04(c) and replacing it with a reference to “Section 2.08(d)”.

Section 3.05 of the Existing Credit Agreement is hereby amended by deleting clauses (x) and (y) therefrom and replacing them with the following:

“(x) until the Business Day next succeeding the date of the relevant notice, Section 2.08(a)(i) or Section 2.08(d)(i), as applicable, with respect to the portions of the applicable draft attributable to 2015 Non-Extending Lenders and 2015 Extending Lenders, respectively, and (y) thereafter, Section 2.08(e)”.

Section 6.01(j)(iii) of the Existing Credit Agreement is hereby amended by adding the following proviso to the end thereof:

“provided, further, that during the period commencing on December 15 of each year through and including January 15 of the immediately succeeding year, notwithstanding anything to the contrary in any Loan Document, if any Short Term Debt matures or is otherwise prepaid or repaid during such period (unless (x) such Short Term Debt is prepaid or repaid with the proceeds of Permitted Debt other than Revolving Advances or (y) pursuant to a cashless settlement mechanism, such Short Term Debt is exchanged, continued or rolled over in connection with any refinancing, extension, loan modification or similar transaction permitted by this Agreement; provided , that, if after giving effect to such transactions, the Debt described in clauses (x) and (y) has a maturity date (or is otherwise prepaid or repaid) on or prior to January 15 of such succeeding year,

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then such Debt shall be subject to the terms of this proviso at such time), then on the Business Day immediately prior to the date of each such maturity or payment (each, a “Specified Reporting Date”), the Borrowers shall deliver to the Agent a roll forward of the Loan Parties’ Eligible Inventory together with an updated Borrowing Base Certificate, in each case as of such Specified Reporting Date;”

Section 6.02(j)(iii)(C) of the Existing Credit Agreement is hereby amended and restated in its entirety as follows:

“(C) Other prepayments of Debt (without utilizing proceeds of Advances) so long as at the time of any such prepayment and immediately after giving pro forma effect thereto, no Default or Event of Default shall have occurred and be continuing. Further, if Holdings, the Borrowers or any of their Subsidiaries shall prepay any Debt (including Debt owed by a Loan Party to a Subsidiary that is not a Loan Party, but excluding other Debt owed to Holdings or any of its Subsidiaries) without utilizing proceeds of Advances pursuant to this clause (C) on any date (each, a “Prepayment Date”) then the Borrowers shall not permit Capped Excess Availability to be less than 12.5% of the Line Cap at any time from the Prepayment Date until one year following the Prepayment Date; provided this sentence shall not apply to (x) prepayments of Debt (A) with the proceeds of the incurrence of Permitted Debt as long as the maturity of such Permitted Debt (i) with respect to Permitted Debt prepaying Debt having a maturity of one year or less, is at least sixty (60) days later than the maturity of the Debt so refinanced, or (ii) with respect to all other Debt, is later than the maturity of the Debt so refinanced and the latest Extended Termination Date, or (B) after giving effect to all repayments of the Obligations required pursuant to Section 2.11(d) , with the proceeds from the issuance of equity interests in a Group Member (other than to another Group Member), or (C) in a principal amount not to exceed $25,000,000 in the aggregate in any fiscal year and (y) solely for the 60 day period commencing with the date that is 60 days prior to the maturity date (as in effect on the Fourth Amendment Effective Date) of the Existing Second Lien Notes outstanding on the Fourth Amendment Effective Date (without regard to any notes issued in exchange or replacement therefor, or in lieu thereof), prepay the Existing Second Lien Notes (without utilizing proceeds of Advances) in an aggregate principal amount not to exceed $150,000,000 during the term of this Agreement, commencing with the Fourth Amendment Effective Date.”

Section 6.02(j) of the Existing Credit Agreement is hereby amended by adding the following sentence at the end thereof:

“The consummation of a cashless offer to exchange outstanding Permitted Debt for new Permitted Debt shall not be prohibited by this Section 6.02(j) so long as (x) other than with respect to the maturity date of such new Permitted Debt (which shall be governed by clause (y)), the terms of such new Permitted Debt would not be prohibited under Section 6.02(m) if such exchange had been

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structured as an amendment to documentation governing existing Debt as opposed to an exchange offer, and (y) the maturity date of such new Permitted Debt is no earlier than the earlier of (1) the maturity date of the Debt being exchanged and (2) the date that is one year after the latest Extended Termination Date. For the avoidance of doubt, the last sentence of Section 6.02(j)(iii)(C) shall not apply to any such exchange.”

5.	Conditions to Effectiveness . This Amendment shall become effective on the date (the “ Amendment Effective Date ”) that each of the following conditions precedent has been fulfilled as reasonably determined by the Agent:

This Amendment shall have been duly executed and delivered by Holdings, the Borrowers, Lenders constituting the Required Lenders, each Issuing Lender, each Co-Collateral Agent, and the Agent, and the Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.

Each of the conditions precedent set forth in Section 4.02 of the Amended Credit Agreement shall have been satisfied.

All action on the part of Holdings and the Borrowers necessary for the valid execution, delivery and performance by the Borrowers of this Amendment shall have been duly taken. The Agent shall have received a legal opinion with respect to enforceability and no conflicts with specified material Debt from Wachtell, Lipton, Rosen & Katz, legal counsel to the Loan Parties, and board resolutions and secretary’s certificates of the Borrowers consistent with those delivered on the Effective Date.

Since January 30, 2017, there shall not have been any event or effect that has had or would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect, as limited to clause (c) of the definition of “Material Adverse Effect” in the Existing Credit Agreement.

After giving effect to this Amendment and the transactions contemplated hereunder, no Default or Event of Default shall have occurred and be continuing under the Amended Credit Agreement.

The Borrowers shall have paid all fees, expenses and other amounts due and owing to the Agent, the Issuing Lenders, the Co-Collateral Agents and the Lenders that have executed this Amendment.

To the extent requested by a Lender, the Agent shall have received all documentation and other information with respect to the Loan Parties required by regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including without limitation the USA PATRIOT Act.

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Each Loan Party shall have duly executed and delivered to the Agent a reaffirmation (in form and substance satisfactory to the Agent) of its obligations (including guarantees) and liens under the Loan Documents.

6.	Binding Effect . The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto, the Lenders and their respective successors and assigns.

7.	Expenses . The Borrowers shall reimburse the Agent and the Co-Collateral Agents for all reasonable and documented out-of-pocket expenses incurred in connection herewith, including, without limitation, reasonable attorneys’ fees.

Multiple Counterparts . This Amendment may be executed in multiple counterparts, each of which shall constitute an original and together which shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or in electronic (i.e. “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

9.	Governing Law . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

10.

FATCA . For purposes of determining withholding taxes imposed under FATCA, the Loan Parties, the Agent and the Co-Collateral Agents shall treat (and the Lenders hereby authorize the Agent and the Co-Collateral Agents to treat) the Amended Credit Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

11.

Effect of Amendment . The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Agents or the Lenders under the Existing Credit Agreement, nor constitute a waiver of any provision of the Existing Credit Agreement. Except as provided herein and in the Amended Credit Agreement, all of the terms and conditions of the Existing Credit Agreement (including the Exhibits thereto) and the other Loan Documents shall remain in full force and effect, and each Borrower hereby reaffirms its obligations (including obligations under any guarantee) and liens granted thereunder. This Amendment is not intended by the parties to be, and shall not be construed to be, a novation of the Existing Credit Agreement or an accord and satisfaction in regard thereto. Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be valid under applicable Requirements of Law. If any provision is found to be invalid under applicable Requirements of Law, it shall be ineffective only to the extent

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of such invalidity and the remaining provisions of this Amendment shall remain in full force and effect. This Amendment shall constitute a Loan Document for all purposes of the Amended Credit Agreement.

[remainder of page intentionally left blank]

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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by each of the parties hereto as of the date first above written.


HOLDINGS:

SEARS HOLDINGS CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

BORROWERS :

SEARS ROEBUCK ACCEPTANCE CORP.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President, Finance

KMART CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

[Signature page to Fourth Amendment to Credit Agreement]


BANK OF AMERICA, N.A., as Agent, a Co-Collateral Agent, an Issuing Lender and as a Lender

By:		/s/ Brian Lindblom
		Name: Brian Lindblom
		Title: Director

[Signature page to Fourth Amendment to Credit Agreement]


WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Co-Collateral Agent, an Issuing Lender and as a Lender

By:		/s/ Joseph Burt
		Name: Joseph Burt
		Title: Director

[Signature page to Fourth Amendment to Credit Agreement]


Citibank, N.A., as a Revolving Lender

By:		/s/ David L. Smith
		Name: David L. Smith
		Title: Vice President and Director

[Signature page to Fourth Amendment to Credit Agreement]


Citizens Business Capital , a division of Asset Finance, Inc., as a Revolving Lender

By:		/s/ Christine Scott
		Name: Christine Scott
		Title: SVP

[Signature page to Fourth Amendment to Credit Agreement]


UPS Capital Corporation, as a Revolving Lender

By:		/s/ Robert C. Dugger
		Name: Robert C. Dugger
		Title: Senior Portfolio Manager

[Signature page to Fourth Amendment to Credit Agreement]


ALLY BANK , as a Revolving Lender

By:		/s/ Steven J. Brown
		Name: Steven J. Brown
		Title: Authorized Signatory

[Signature page to Fourth Amendment to Credit Agreement]


PNC BANK, NATIONAL ASSOCIATION, as a Revolving Lender

By:		/s/ Michael Byrne
		Name: Michael Byrne
		Title: Assistant Vice President

[Signature page to Fourth Amendment to Credit Agreement]


TD Bank, N. A., as a Revolving Lender

By:		/s/ Jeffrey Saperstein
		Name: Jeffrey Saperstein
		Title: Vice President

[Signature page to the Fourth Amendment to the Credit Agreement]

Consents from Term Lenders

are available with the Agent

Exhibit 10.2

EXECUTION VERSION

THIRD AMENDMENT TO

SECOND LIEN CREDIT AGREEMENT

THIRD AMENDMENT TO SECOND LIEN CREDIT AGREEMENT (this “ Amendment ”) dated as of February 7, 2018 among

SEARS HOLDINGS CORPORATION, a Delaware corporation (“ Holdings ”),

SEARS ROEBUCK ACCEPTANCE CORP., a Delaware corporation, and KMART CORPORATION, a Michigan corporation (the “ Borrowers ”),

the Guarantors party to the Amended Second Lien Credit Agreement (as defined below) (the “ Guarantors ”),

the Lenders party to the Amended Second Lien Credit Agreement, and

JPP, LLC, as Administrative Agent and collateral administrator (the “ Agent ”),

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H :

WHEREAS, Holdings, the Borrowers, the Lenders party thereto, Guarantors party thereto and the Agent are party to that certain Second Lien Credit Agreement (as amended by that certain First Amendment to Second Lien Credit Agreement, dated as of July 7, 2017, that certain Second Amendment to Second Lien Credit Agreement, dated as of January 9, 2018, and as further amended, amended and restated, supplemented or otherwise modified prior to the date hereof, the “ Existing Second Lien Credit Agreement ”; the Existing Second Lien Credit Agreement as amended hereby, the “ Amended Second Lien Credit Agreement ”); and

WHEREAS, Holdings, the Borrowers, the Guarantors, certain of the Lenders and the Agent have agreed to amend the Existing Second Lien Credit Agreement.

NOW THEREFORE, in consideration of the mutual promises and agreements herein contained, the parties hereto hereby agree as follows:

1.	Incorporation of Terms. All capitalized terms not otherwise defined herein shall have the same meaning as in the Amended Second Lien Credit Agreement.

2.	Representations and Warranties . By execution of this Amendment, each Loan Party certifies that:

no Default or Event of Default has occurred and is continuing under the Amended Second Lien Credit Agreement or under any other Loan Document;

all representations and warranties contained in the Amended Second Lien Credit Agreement and the other Loan Documents are true and correct in all material respects as of the date hereof, except to the extent that (A) such representations or warranties are qualified by a materiality standard (in which case such representations or warranties are true and correct in all respects), (B) such representations or warranties expressly relate to an earlier date (in which case such representations or warranties are true and correct in all material respects as of such earlier date); (C) such representations or warranties relate to Section 5.01(f) of the Amended Second Lien Credit Agreement (in which case such representations or warranties are limited to clause (c) of the definition of “Material Adverse Effect” in the Amended Second Lien Credit Agreement);

the execution, delivery and performance by each Loan Party party hereto and thereto of this Amendment and the other documents executed in connection herewith, and the consummation of the transactions contemplated hereby or thereby, are within such Loan Party’s powers, have been duly authorized by all necessary organizational action, and do not contravene (A) the charter or by-laws or other organizational or governing documents of such Loan Party or (B) law or any contractual restriction binding on or affecting any Loan Party, except, for purposes of this clause (B), to the extent such contravention would not reasonably be expected to have a Material Adverse Effect;

this Amendment has been duly executed and delivered by each Loan Party party hereto, constitutes the legal, valid and binding obligation of each Loan Party party hereto enforceable against such Loan Party in accordance with its terms subject to the effect of any applicable bankruptcy, insolvency, reorganization or moratorium or similar laws affecting the rights of creditors generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity); and

the execution, delivery and performance by each Loan Party of this Amendment and the other documents executed in connection herewith, and the consummation of the transactions contemplated hereby or thereby, will not conflict with, constitute a default under or violate any of the terms, conditions or provisions of (i) the Indenture for the Existing Second Lien Notes, (ii) the Security Agreement, (iii) the Existing Intercreditor Agreement, (iv) the First Lien Credit Agreement, (v) the Letter of Credit Reimbursement Agreement, dated as of December 28, 2016, by and among Holdings, the Borrowers, certain financial institutions and Citibank, N.A. as administrative agent and issuing bank, as amended, modified, supplemented or restated and in effect from time to time, (vi) that certain Second Amended and Restated Loan Agreement, dated as of October 18, 2017, by and

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among JPP, LLC, JPP II, LLC, Sears, Roebuck and Co, Kmart Corporation and the other borrower parties thereto, as amended, modified, supplemented or restated and in effect from time to time, (vii) that certain Amended and Restated Loan Agreement, dated as of May 22, 2017, by and among JPP, LLC, JPP II, LLC, Cascade Investment, L.L.C., Sears, Roebuck and Co, Kmart Corporation and the other borrower parties thereto, as amended, modified, supplemented or restated and in effect from time to time, (viii) that certain Receivables and Participation Purchase Agreement, dated as of June 15, 2017, by and among Kmart Operations LLC, Sears Operations LLC, Holdings, JPP, LLC and JPP II, LLC, as amended, modified, supplemented or restated and in effect from time to time and (ix) that certain Term Loan Credit Agreement, dated as of January 4, 2018, among Holdings, the Borrowers, the guarantors party thereto from time to time, the lenders party thereto from time to time and JPP, LLC, as administrative agent and collateral administrator, as amended, modified, supplemented or restated and in effect from time to time.

Release by Loan Parties . Each Loan Party hereby acknowledges and agrees that it has no actual knowledge of any defenses or claims against any Lender, the Agent, or any of their respective Affiliates, or any of their respective officers, directors, employees, attorneys, representatives, predecessors, successors, or assigns with respect to the Obligations, and that if such Loan Party now has, or ever did have, any defenses or claims with respect to the Obligations against any Lender, the Agent , or any of their respective Affiliates or any of their respective officers, directors, employees, attorneys, representatives, predecessors, successors, or assigns, whether known or unknown, at law or in equity, from the beginning of the world through this date and through the time of effectiveness of this Amendment, all of them are hereby expressly WAIVED , and each Loan Party hereby RELEASES each Lender, the Agent and each of their respective Affiliates and their respective officers, directors, employees, attorneys, representatives, predecessors, successors, and assigns from any liability therefor.

4.	Amendments to Existing Second Lien Credit Agreement .

Section 1.01 of the Existing Second Lien Credit Agreement is hereby amended by deleting clause (h) of the definition of “Permitted Debt” set forth therein and replacing it in its entirety with the following:

“(h) other Debt in an amount not to exceed $1,250,000,000 in the aggregate outstanding at any time;”

Section 1.01 of the Existing Second Lien Credit Agreement is hereby amended by adding the following definition in alphabetical order:

“ Third Amendment Effective Date ” means the “Amendment Effective Date” as defined in the Third Amendment to Second Lien Credit Agreement, dated as of February 7, 2018, among Holdings, the Borrowers, the Guarantors party thereto, the Lenders party thereto and the Agent.

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Section 2.02(c) of the Existing Second Lien Credit Agreement is hereby amended by deleting the phrase “179 days” and replacing it with “270 days”.

Section 2.02 of the Existing Second Lien Credit Agreement is hereby amended by deleting the proviso at the end of Section 2.02 and replacing it in its entirety with the following:

“provided, the aggregate principal amount of all Line of Credit Loans outstanding hereunder, after giving effect to any Line of Credit Loan proposed to be made pursuant to this Section 2.02, shall not exceed $600,000,000.”

Section 6.02(j)(iii)(C) of the Existing Second Lien Credit Agreement is hereby amended and restated in its entirety as follows:

“(C) Other prepayments of Debt so long as at the time of any such prepayment and immediately after giving pro forma effect thereto, no Default or Event of Default shall have occurred and be continuing. Further, if Holdings, the Borrowers or any of their Subsidiaries shall prepay any Debt (including Debt owed by a Loan Party to a Subsidiary that is not a Loan Party, but excluding other Debt owed to Holdings or any of its Subsidiaries and excluding Priority Obligations) on any date (each, a “Prepayment Date”) then the Borrowers shall not permit Capped Excess Availability to be less than 12.5% of the Line Cap (or such lesser amount as may be permitted under the First Lien Credit Agreement) at any time from the Prepayment Date until one year following the Prepayment Date; provided this sentence shall not apply to (x) prepayments of Debt (for the avoidance of doubt, other than intercompany Debt) (A) with the proceeds of the incurrence of Permitted Debt as long as the maturity of such Permitted Debt (i) with respect to Permitted Debt prepaying Debt having a maturity of one year or less, is at least sixty (60) days later than the maturity of the Debt so refinanced, or (ii) with respect to all other Debt, is later than the maturity of the Debt so refinanced and the latest Termination Date, or (B) with the proceeds from the issuance of equity interests in a Group Member (other than to another Group Member), or (C) in a principal amount not to exceed $25,000,000 in the aggregate in any fiscal year and (y) solely for the 60 day period commencing with the date that is 60 days prior to the maturity date (as in effect on the Third Amendment Effective Date) of the Existing Second Lien Notes outstanding on the Third Amendment Effective Date (without regard to any notes issued in exchange or replacement therefor, or in lieu thereof), prepay the Existing Second Lien Notes in an aggregate principal amount not to exceed $150,000,000 during the term of this Agreement, commencing with the Third Amendment Effective Date.”

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Section 6.02(j) of the Existing Second Lien Credit Agreement is hereby amended by adding the following sentence at the end thereof:

“The consummation of a cashless offer to exchange outstanding Permitted Debt for new Permitted Debt shall not be prohibited by this Section 6.02(j) so long as the maturity date of such new Permitted Debt is no earlier than the earlier of (1) the maturity date of the Debt being exchanged and (2) the date that is one year after the latest Termination Date. For the avoidance of doubt, the last sentence of Section 6.02(j)(iii)(C) shall not apply to any such exchange.”

Footnote 21 to Exhibit L to the Existing Second Lien Credit Agreement is hereby amended by deleting the phrase “179 days” and replacing it with “270 days”.

Except as provided herein, all of the terms and conditions of the Existing Second Lien Credit Agreement shall remain in full force and effect.

5.	Conditions to Effectiveness . This Amendment shall become effective on the date (the “ Amendment Effective Date ”) that each of the following conditions precedent has been fulfilled as determined by the Agent:

This Amendment shall have been duly executed and delivered by Holdings, the Borrowers, the Required Lenders and the Agent, and the Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.

All action on the part of Holdings and the Borrowers necessary for the valid execution, delivery and performance by Holdings and the Borrowers of this Amendment shall have been duly taken. The Agent shall have received corporate resolutions of Holdings authorizing the entrance of Holdings and the Borrowers into this Amendment.

After giving effect to this Amendment, Capped Excess Availability shall not be less than $150,000,000.

The Borrowers shall have paid all fees, expenses and other amounts due and owing to the Agent and the Lenders that have executed this Amendment.

6.	Binding Effect . The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto, the Lenders and their respective successors and assigns.

7.	Expenses . The Borrowers shall reimburse the Agent for all reasonable and documented out-of-pocket expenses incurred in connection herewith, including, without limitation, reasonable attorneys’ fees.

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Multiple Counterparts . This Amendment may be executed in multiple counterparts, each of which shall constitute an original and together which shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e. “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

Acknowledgement and Reaffirmation . This Amendment shall amend the Existing Second Lien Credit Agreement, but is not intended to, and shall not, constitute a novation thereof or in any way impair or otherwise affect the rights or obligations of the parties thereunder (including with respect to loans and representations and warranties made thereunder) except as such rights or obligations are amended or modified hereby. The Existing Second Lien Credit Agreement as amended hereby shall be deemed to be a continuing agreement among the parties, and all documents, instruments and agreements delivered, as well as all Liens created, pursuant to or in connection with the Existing Second Lien Credit Agreement (as amended) shall remain in full force and effect, each in accordance with its terms (as amended). Each Loan Party (a) acknowledges and consents to all of the terms and conditions of this Amendment, (b) affirms as of the date hereof the covenants and agreements contained in this Amendment and each Loan Document to which it is a party, including in each case such covenants and agreements as in effect immediately after giving effect to this Amendment and the transactions contemplated hereby, (c) agrees that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge such Loan Party’s obligations under the Loan Documents, (d) affirms that each of the Liens granted in or pursuant to the Loan Documents are valid and secure the Secured Obligations (as defined under the Security Agreement), including those Obligations arising under the Amended Second Lien Credit Agreement and (e) agrees that neither this Amendment nor any other document executed in connection herewith shall in no manner impair or otherwise adversely affect any of the Liens granted in or pursuant to the Loan Documents. Each Guarantor hereby confirms that its guarantee under the Amended Second Lien Credit Agreement remains unaltered and in full force and effect and hereby reaffirms, ratifies and confirms the terms and conditions of such guarantee.

10.

Liens Unimpaired . Neither the modification of the Amended Second Lien Credit Agreement effected pursuant to this Amendment nor the execution, delivery, performance or effectiveness of this Amendment: (a) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or (b) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

11.

Severability . If any provision of this Amendment is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

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12.	Governing Law . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

[Remainder of page intentionally left blank; Signature pages follow.]

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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by each of the parties hereto as of the date first above written.


SEARS HOLDINGS CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer


SEARS ROEBUCK ACCEPTANCE CORP.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President, Finance


KMART CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

[Signature page to Third Amendment to Second Lien Credit Agreement]


A&E FACTORY SERVICE, LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

A&E HOME DELIVERY, LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

A&E LAWN & GARDEN, LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

A&E SIGNATURE SERVICE, LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

CALIFORNIA BUILDER APPLIANCES, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

FLORIDA BUILDER APPLIANCES, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

[Signature page to Third Amendment to Second Lien Credit Agreement]



KLC, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

KMART HOLDING CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

KMART OF MICHIGAN, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

KMART OF WASHINGTON LLC
By: Kmart Corporation, as Sole Member

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

KMART OPERATIONS LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

KMART STORES OF ILLINOIS LLC
By: Kmart Corporation, as Sole Member

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

[Signature page to Third Amendment to Second Lien Credit Agreement]


KMART STORES OF TEXAS LLC
By: Kmart Corporation, as Sole Member

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

KMART.COM LLC
By: BlueLight.com, Inc., as Sole Member

By:		/s/ Lawrence J. Meerschaert
Name:		Lawrence J. Meerschaert
Title:		Vice President of BlueLight.com, Inc., the Sole Member of Kmart.com LLC

MYGOFER LLC
By: Kmart Corporation, as Sole Member

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

PRIVATE BRANDS, LTD.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

SEARS BRANDS MANAGEMENT CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

[Signature page to Third Amendment to Second Lien Credit Agreement]


SEARS HOLDINGS MANAGEMENT CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		President

SEARS HOME IMPROVEMENT PRODUCTS, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		President

SEARS OPERATIONS LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

SEARS PROTECTION COMPANY

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

SEARS PROTECTION COMPANY (FLORIDA), L.L.C.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

SEARS, ROEBUCK AND CO.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

[Signature page to Third Amendment to Second Lien Credit Agreement]


SEARS, ROEBUCK DE PUERTO RICO, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

SOE, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

STARWEST, LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

[Signature page to Third Amendment to Second Lien Credit Agreement]


JPP, LLC, as Agent and as a Lender

By:		/s/ Edward S. Lampert
Name:		Edward S. Lampert
Title:		Member

[Signature page to Third Amendment to Second Lien Credit Agreement]


JPP II, LLC, as a Lender

By: RBS Partners, L.P., as Manager

By: ESL Investments, Inc., as General Partner

By:		/s/ Edward S. Lampert
		Name: Edward S. Lampert
		Title: Chairman and Chief Executive Officer

[Signature page to Third Amendment to Second Lien Credit Agreement]

Exhibit 10.3

EXECUTION VERSION

THIRD AMENDMENT TO

TERM LOAN CREDIT AGREEMENT

THIRD AMENDMENT TO TERM LOAN CREDIT AGREEMENT (this “ Amendment ”) dated as of February 7, 2018, among

SEARS HOLDINGS CORPORATION, a Delaware corporation (“ Holdings ”),

SEARS ROEBUCK ACCEPTANCE CORP., a Delaware corporation, and KMART CORPORATION, a Michigan corporation (the “ Borrowers ”),

the Guarantors party to the Credit Agreement (as defined below) (the “ Guarantors ”),

the Lenders party to the Credit Agreement (the “ Lenders ”), and

JPP, LLC, as Administrative Agent and collateral administrator (the “ Agent ”),

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H :

WHEREAS, Holdings, the Borrowers, the Lenders, the Guarantors and the Agent are party to that certain Term Loan Credit Agreement, dated as of January 4, 2018 (as amended by that certain Term Increase Amendment No. 1 to the Term Loan Credit Agreement, dated as of January 19, 2018, and as amended by that certain Amendment to Term Loan Credit Agreement, dated as of January 29, 2018, the “ Credit Agreement ”);

WHEREAS, pursuant to the Credit Agreement, the Lenders have made certain loans and other extensions of credit to the Borrowers;

WHEREAS, the Borrowers have requested the Credit Agreement be amended as set forth in this Amendment; and

WHEREAS, each party that executes this Amendment has agreed to the terms of this Amendment;

NOW THEREFORE, in consideration of the mutual promises and agreements herein contained, the parties hereto hereby agree as follows:

1.	Amendments to Credit Agreement . Each of the parties hereto agrees that, as of the Amendment Effective Date, the Credit Agreement is hereby amended as follows:

The definition of “Permitted Short Term Debt Amount” set forth in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows:

““ Permitted Short Term Debt Amount ” means the maximum aggregate principal amount of “Debt” (as defined in the ABL Credit Agreement) that can be incurred pursuant to clause (h) of “Permitted Debt” (as defined in the ABL Credit Agreement).”

Section 6.02(j) of the Credit Agreement is hereby amended by adding the following sentence at the end thereof:

2.	Incorporation of Terms. All capitalized terms not otherwise defined herein shall have the same meaning as in the Credit Agreement.

Release by Loan Parties . Each Loan Party hereby acknowledges and agrees that it has no actual knowledge of any defenses or claims against any Lender, the Agent, or any of their respective Affiliates or any of their respective officers, directors, employees, attorneys, representatives, predecessors, successors, or assigns with respect to the Obligations, and that if such Loan Party now has, or ever did have, any defenses or claims with respect to the Obligations against any Lender, the Agent, or any of their respective Affiliates or any of their respective officers, directors, employees, attorneys, representatives, predecessors, successors, or assigns, whether known or unknown, at law or in equity, from the beginning of the world through this date and through the time of effectiveness of this Amendment, all of them are hereby expressly WAIVED , and each Loan Party hereby RELEASES each Lender, the Agent and each of their respective Affiliates and their respective officers, directors, employees, attorneys, representatives, predecessors, successors, and assigns from any liability therefor.

4.	Conditions to Effectiveness . This Amendment shall become effective on the date (the “ Amendment Effective Date ”) that each of the following conditions precedent has been fulfilled as determined by the Lenders, such date being February [•], 2018:

This Amendment shall have been duly executed and delivered by Holdings, the Borrowers, the Guarantors, each of the Lenders and the Agent, and the Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.

5.	Representations and Warranties . By execution of this Amendment, each Loan Party certifies that:

no Default or Event of Default exists under the Credit Agreement or under any other Loan Document as of the date hereof;

all representations and warranties contained in the Credit Agreement, after the effectiveness of the Amendment, and the other Loan Documents are true and correct in all material respects as of the date hereof, immediately prior and immediately after giving effect the amendments pursuant to Section 1 hereof,

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except to the extent that (i) such representations or warranties are qualified by a materiality standard, in which case they are true and correct in all respects, and (ii) such representations or warranties expressly relate to an earlier date (in which case such representations and warranties are true and correct in all material respects as of such earlier date, except to the extent that such representations or warranties are qualified by a materiality standard, in which case they are true and correct in all respects as of such earlier date);

the execution, delivery and performance by each Loan Party of this Amendment and the other documents executed in connection herewith, and the consummation of the transactions contemplated hereby or thereby, are within such Loan Party’s powers, have been duly authorized by all necessary organizational action, and (i) will not result in a breach of any of the terms and provisions of, or constitute a default under the Material Documents, and (ii) do not contravene (A) the charter or by-laws or other organizational or governing documents of such Loan Party or (B) law or any contractual restriction binding on or affecting any Loan Party, except, for purposes of this clause (ii)(B), to the extent such contravention would not reasonably be expected to have a Material Adverse Effect;

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 of this Amendment and the other documents executed in connection herewith, and the consummation of the transactions contemplated hereby or thereby that has not already been obtained if the failure to obtain such authorization, approval or other action could reasonably be expected to result in a Material Adverse Effect or as contemplated by the Post-Closing Undertakings schedule to the Amended Term Loan Credit Agreement or Schedule – Exhibit E – Section 1.14(ii) of the Amendment Effective Date Certificate; and

Acknowledgement and Reaffirmation . This Amendment shall amend the Credit Agreement, but is not intended to, and shall not, constitute a novation thereof or in any way impair or otherwise affect the rights or obligations of the parties thereunder (including with respect to loans and representations and warranties made thereunder) except as such rights or obligations are amended or modified hereby. The Credit Agreement as amended hereby shall be deemed to be a continuing agreement among the parties, and all documents, instruments and agreements delivered, as well as all Liens created, pursuant to or in

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connection with the Credit Agreement (as amended) shall remain in full force and effect, each in accordance with its terms (as amended). Each Loan Party (a) acknowledges and consents to all of the terms and conditions of this Amendment, (b) affirms as of the date hereof the covenants and agreements contained in this Amendment and each Loan Document to which it is a party, including in each case such covenants and agreements as in effect immediately after giving effect to this Amendment and the transactions contemplated hereby, (c) agrees that this Amendment and all documents executed in connection herewith do no operate to reduce or discharge such Loan Party’s obligations under the Loan Documents, (d) affirms that each of the Liens granted in or pursuant to the Loan Documents are valid and secure the Secured Obligations (as defined under the Security Agreement) and (e) agrees that neither this Amendment nor any other document executed in connection herewith shall in no manner impair or otherwise adversely affect any of the Liens granted in or pursuant to the Loan Documents. Each Guarantor hereby confirms that its guarantee under the Credit Agreement remains unaltered and in full force and effect and hereby reaffirms, ratifies and confirms the terms and conditions of such guarantee. Agent hereby acknowledges and agrees that its obligations under each of (a) the Acknowledgement of License Agreement, dated as of the Effective Date, between the Agent the ABL Agent and (b) the Acknowledgement of License Agreement, dated as of the Effective Date, between the Agent and the administrative and collateral agent under the Existing Second Lien Credit Agreement (the “ 2L Agent ”) remain in full force and effect.

Liens Unimpaired . Neither the modification of the Credit Agreement effected pursuant to this Amendment nor the execution, delivery, performance or effectiveness of this Amendment: (a) impairs the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all Obligations, whether heretofore or hereafter incurred; or (b) requires that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens other than as contemplated by the Post-Closing Undertakings schedule to the Credit Agreement.

8.	Binding Effect . The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

9.	Expenses . The Borrowers shall reimburse each of the Agent and the Lenders party hereto for all reasonable and documented out-of-pocket expenses incurred in connection herewith, including, without limitation, reasonable attorneys’ fees.

10.

Multiple Counterparts . This Amendment may be executed in multiple counterparts, each of which shall constitute an original and together which shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e. “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

11.

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12.

Entire Agreement . This Amendment, the Credit Agreement and the other Loan Documents constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof and supersede all other prior agreements and understandings, both written and verbal, among the parties hereto with respect to the subject matter hereof. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of any party under, the Credit Agreement, nor alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect. It is understood and agreed that each reference in each Loan Document to the Credit Agreement, whether direct or indirect, shall hereafter be deemed to be a reference to the Credit Agreement as amended hereby and that this Amendment is a Loan Document.

13.	Governing Law . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

[Remainder of page intentionally left blank; Signature pages follow.]

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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by each of the parties hereto as of the date first above written.


SEARS HOLDINGS CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

KMART CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

SEARS ROEBUCK ACCEPTANCE CORP.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President, Finance

SEARS, ROEBUCK AND CO.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

STI MERCHANDISING, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		President

SEARS BRANDS, L.L.C.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

[Signature page to Amendment to Term Loan Credit Agreement]


A&E FACTORY SERVICE, LLC
A&E HOME DELIVERY, LLC A&E LAWN & GARDEN, LLC

A&E SIGNATURE SERVICE, LLC
KMART OF MICHIGAN, INC.
KLC, INC.
PRIVATE BRANDS, LTD.
SEARS BRANDS MANAGEMENT CORPORATION
SEARS PROTECTION COMPANY
SEARS PROTECTION COMPANY (FLORIDA), L.L.C.
SEARS, ROEBUCK DE PUERTO RICO, INC.
SOE, INC.
STARWEST, LLC

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

SEARS HOME IMPROVEMENT PRODUCTS, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		President

KMART HOLDING CORPORATION
KMART OPERATIONS LLC
SEARS OPERATIONS LLC
CALIFORNIA BUILDER APPLIANCES, INC.
FLORIDA BUILDER APPLIANCES, INC.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

[Signature page to Amendment to Term Loan Credit Agreement]


KMART OF WASHINGTON LLC
KMART STORES OF ILLINOIS LLC KMART STORES OF TEXAS LLC

MYGOFER LLC

By: Kmart Corporation, as Sole Member

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Chief Financial Officer

SEARS DEVELOPMENT CO.

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

KMART.COM LLC
By: BlueLight.com, Inc., as Sole Member

By:		/s/ Lawrence J. Meerschaert
Name:		Lawrence J. Meerschaert
Title:		Vice President of BlueLight.com, Inc., the Sole Member of Kmart.com LLC

SEARS HOLDINGS MANAGEMENT CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		President

SEARS BRANDS BUSINESS UNIT CORPORATION

By:		/s/ Robert A. Riecker
Name:		Robert A. Riecker
Title:		Vice President

[Signature page to Amendment to Term Loan Credit Agreement]


JPP, LLC, as Agent and as a Lender
By:		/s/ Edward S. Lampert
Name:		Edward S. Lampert
Title:		Member

JPP II, LLC, as a Lender

By: RBS Partners, L.P., as Manager

By: ESL Investments, Inc., as General Partner

By:		/s/ Edward S. Lampert
Name:		Edward S. Lampert
Title:		Chairman and Chief Executive Officer

[Signature page to Amendment to Term Loan Credit Agreement]


CRS MASTER FUND, L.P.
CYRUS SPECIAL STRATEGIES MASTER FUND, LP
CYRUS SELECT OPPORTUNITIES MASTER FUND, LTD.
CYRUS OPPORTUNITIES MASTER FUND II, LTD.
CANARY SC MASTER FUND, L.P.
CRESCENT 1, L.P.
CYRUS 1740 MASTER FUND, LP, each as a Lender

By:		Cyrus Capital Partners, L.P., as Investment Manager

By:		/s/ Jennifer M. Pulick
		Name: Jennifer M. Pulick
		Title: Authorized Signatory

[Signature page to Amendment to Term Loan Credit Agreement]