Exhibit 10.1

AMENDMENT TO TRANSACTION DOCUMENTS

This AMENDMENT TO TRANSACTION DOCUMENTS, dated as of August 30, 2018, (this
“Amendment”), is entered into by and among the undersigned in connection with
(i) that certain Pension Plan Protection and Forbearance Agreement, dated as of
March 18, 2016 (as amended, extended, restated, replaced, supplemented or
otherwise modified from time to time, the “PPPFA”), by and among Sears Holdings
Corporation, a Delaware corporation (the “Company”), certain Subsidiaries of the
Company party thereto (together with the Company, the “Sears Parties”) and
Pension Benefit Guaranty Corporation (“PBGC”, and collectively with the Sears
Parties, the “Parties”), (ii) the Craftsman Consent (as defined below) and
(iii) the REMIC Amendment (as defined below). Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings ascribed to such
terms in the PPPFA.

WHEREAS, pursuant to the PPPFA, the Sears Parties agreed to provide PBGC and the
Pension Plans with certain enhanced protections in exchange for PBGC’s agreement
to forbear from initiating termination proceedings with respect to the Pension
Plans pursuant to ERISA Section 4042 for the term and under the conditions
provided in the PPPFA;

WHEREAS, the Parties have entered into that certain Consent, Waiver and
Amendment, dated as of March 8, 2017 (as amended, extended, restated, replaced,
supplemented or otherwise modified from time to time, the “Craftsman Consent”),
pursuant to which, subject to the terms and conditions of the Craftsman Consent,
PBGC consented to the consummation of the Craftsman Transaction (as defined in
the Craftsman Consent) and the Parties agreed to certain amendments to the
PPPFA;

WHEREAS, pursuant to the terms of the Craftsman Consent, the Company caused
certain of its Subsidiaries to grant Residual 2019 Contribution Liens (as
defined in the Craftsman Consent) to PBGC on the real property assets set forth
on Exhibit 1 attached to the REMIC Amendment (each, a “Craftsman Mortgaged
Property” and, collectively, the “Craftsman Mortgaged Properties”) pursuant to
mortgages or deeds of trust executed by the applicable Subsidiary and PBGC and
recorded in the applicable recording office (each, as amended, extended,
restated, replaced, supplemented or otherwise modified from time to time, a
“Craftsman Mortgage” and, collectively, the “Craftsman Mortgages”);

WHEREAS, pursuant to the terms of the Craftsman Consent, the Company, PBGC, and
U.S. Bank National Association (as it may be replaced from time to time, the
“Escrow Agent”) have entered into that certain Escrow Agreement dated as of
June 29, 2017 (as defined in the Craftsman Consent, and as further amended,
extended, restated, replaced, supplemented or otherwise modified from time to
time, the “Consent Escrow Agreement”);

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WHEREAS, the Parties have entered into that certain REMIC Amendment to PPPFA,
Craftsman Consent and Other Transaction Documents, dated as of November 7, 2017
(as amended, extended, restated, replaced, supplemented or otherwise modified
from time to time, the “REMIC Amendment”), pursuant to which, subject to the
terms and conditions of the REMIC Amendment, the Parties agreed to certain
amendments to the PPPFA, the Craftsman Mortgages, the Consent Escrow Agreement
(as amended, as further amended pursuant to this Amendment, as may be further
amended, extended, restated, replaced, supplemented or otherwise modified from
time to time, the “Amended Consent Escrow Agreement”) and the other Transaction
Documents (including, without limitation, permitting the Company and its
Subsidiaries to monetize any or all of the Craftsman Mortgaged Properties so
long as all net proceeds of such monetization were promptly deposited into the
Escrow Account (as defined in the Craftsman Consent) and certain other
conditions were satisfied); and

WHEREAS, subject to the terms and conditions set forth herein, the Parties wish
to further amend the PPPFA, the Craftsman Consent, the Craftsman Mortgages, the
REMIC Amendment and the other Transaction Documents as set forth herein.

NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, it is agreed as follows:

1. Craftsman Mortgaged Properties and Exempt Transactions.

(a) Effective upon the occurrence of the Effective Date (as defined below):

(i) The Parties hereby agree that, notwithstanding anything to the contrary set
forth in the PPPFA or any other Transaction Document (including, without
limitation, the Craftsman Consent, the Craftsman Mortgages and the REMIC
Amendment), the Company shall (A) use commercially reasonable efforts (which
efforts shall not require the payment of any amounts, incurrence of any
liabilities or giving of any other consideration of any kind) to cause all
mortgagors under the Craftsman Mortgages (each mortgagor, a “Payor”, and
collectively, the “Payors”)), on or before September 30, 2018, to monetize (by
sale, financing, sale/leaseback or other transaction similar to the foregoing)
any or all of the Craftsman Mortgaged Properties, and (B) if such monetization
is consummated, cause the Payors to deposit into the Escrow Account funds in an
aggregate amount equal to $32,000,000 (the “Required Deposit”, and the date of
such deposit, the “Deposit Date”), with each Payor to deposit into the Escrow
Account its respective amount of the Required Deposit set forth on Schedule 1
hereto, with such amounts based upon the pro rata appraised values of each of
the Craftsman Mortgaged Properties. The Parties hereby further agree that
(x) upon the making of the Required Deposit, Section 3(c) of the Craftsman
Consent and Section 2(a)(i) of the REMIC Amendment shall be automatically of no
further force or effect, the Residual 2019 Contribution Liens on all Craftsman
Mortgaged Properties shall be automatically released and all Craftsman Mortgages
on all Craftsman Mortgaged Properties shall be automatically terminated and of
no further force or effect, in each case without any action by any person or
entity and (y) to the extent requested by the Company, PBGC shall take all
actions and execute and deliver all instruments, documents and agreements
reasonably necessary or reasonably desirable to evidence the release of the
Residual 2019 Contribution Liens on all Craftsman Mortgaged Properties and the
termination of all Craftsman Mortgages.

 

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(ii) The Parties hereby agree that no (A) disposition by the Company or any of
its Subsidiaries primarily of any Craftsman Mortgaged Properties or
(B) incurrence by the Company or any of its Subsidiaries of any Indebtedness
primarily secured by any Craftsman Mortgaged Properties shall, in any case set
forth in clauses (A) and (B) (any such transaction, an “Exempt Transaction”),
count against any cap calculation set forth in the definition of “Material
Transaction” (or constitute a Material Transaction); and

(iii) PBGC hereby agrees that it shall not initiate an ERISA Section 4042
involuntary termination of either Pension Plan for which the consummation of any
Exempt Transaction is a material basis.

(b) The consents set forth above shall be effective only in the specific
instances and for the specific purposes for which they are given, and such
consents shall not entitle the Company or any other Sears Party or Payor to any
other or further consent in any similar or other circumstances. The consents set
forth above shall be limited precisely as written and shall not be deemed to
(i) be a waiver or modification of any other term or condition of the PPPFA or
any other Transaction Document or (ii) prejudice any right or remedy which PBGC
may now have or may have in the future under or in connection with the PPPFA or
any other Transaction Document.

2. Contribution and Application of Funds. The Parties hereby agree as follows,
effective on the Deposit Date, and notwithstanding any provision of the PPPFA,
the Craftsman Consent, the REMIC Amendment or any other Transaction Document to
the contrary:

(a) Section 3(d) of the REMIC Amendment is amended and restated in its entirety
as follows:

“on or before December 15, 2018, unless PBGC shall have validly issued a notice
to the Escrow Agent pursuant to Section 3.2(c) of the Amended Consent Escrow
Agreement, the Escrow Agent, pursuant to the terms of the Amended Consent Escrow
Agreement and in accordance with instructions provided by the Designated
Financial Institution (as defined in the Craftsman Consent), shall contribute
all or a portion of the remaining funds in the Escrow Account (including,
without limitation, any portion of the REMIC Payment (as defined REMIC
Amendment), the cash payment made pursuant to the DPPP Purchase Agreement (as
defined in the Craftsman Consent), the Required Deposit (as defined in the
Amendment to Transaction Documents, dated as of August 30, 2018, entered into by
the Parties) and returns on investment of the foregoing) (the “Remaining
Funds”), in an amount at least equal to the lesser of (x) the entire amount of
Remaining Funds and (y) 90% of the estimated amount (as determined by the
actuary for the Pension Plans) required as of the date of such contribution to
satisfy in full all estimated Minimum Funding Obligations for all plan years of
the Pension Plans up to and including the plan year beginning December 1, 2018,
to either or both of the Pension Plans (with the timing of such contribution(s)
(subject to the limits set forth in this Section 3(d)), the allocation of such
contribution(s) between the Pension Plans, and the designation of such
contribution(s) to particular plan years to be determined by the Designated
Financial Institution acting in its sole and absolute discretion); provided
that, in the event that the applicable limit is

 

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as set forth in clause (y) above, on or before April 1, 2019, unless PBGC shall
have validly issued a notice to the Escrow Agent pursuant to Section 3.2(c) of
the Amended Consent Escrow Agreement, the Escrow Agent, pursuant to the terms of
the Amended Consent Escrow Agreement and in accordance with instructions
provided by the Designated Financial Institution, shall contribute all or a
portion of the remaining Remaining Funds in an amount at least equal to the
lesser of (x) the entire amount of the remaining Remaining Funds and (y) the
estimated amount (as determined by the actuary for the Pension Plans) required
as of the date of such contribution to satisfy in full all estimated Minimum
Funding Obligations for all plan years of the Pension Plans up to and including
the plan year beginning December 1, 2018, to either or both of the Pension Plans
(with the timing of such contribution(s) (subject to the limits set forth in
this Section 3(d)), the allocation of such contribution(s) between the Pension
Plans, and the designation of such contribution(s) to particular plan years to
be determined by the Designated Financial Institution acting in its sole and
absolute discretion);”

(b) Section 3(e) of the REMIC Amendment is amended and restated in its entirety
as follows:

“on or before December 15, 2019, unless PBGC shall have validly issued a notice
to the Escrow Agent pursuant to Section 3.2(c) of the Amended Consent Escrow
Agreement, the Escrow Agent shall, pursuant to the terms of the Amended Consent
Escrow Agreement and in accordance with instructions provided by the Designated
Financial Institution, contribute all remaining Remaining Funds in the Escrow
Account to either or both of the Pension Plans on or before December 15, 2019
(with the timing of such contribution(s) (subject to the limits set forth in
this Section 3(e)), the allocation of such contribution(s) between the Pension
Plans, and the designation of such contribution(s) to particular plan years to
be determined by the Designated Financial Institution acting in its sole and
absolute discretion);”

(c) Section 3(f) of the REMIC Amendment is deleted in its entirety.

3. Amendments to the Security Agreement. Effective upon the occurrence of the
Effective Date, the Parties hereby amend the Security Agreement (as defined in
the Craftsman Consent) as follows:

(a) Section 13 of the Security Agreement is amended and restated in its entirety
as follows:

PPPFA, Consent, etc. Notwithstanding any other provision of this Security
Agreement except Section 15, the rights of the Parties hereunder are subject to
the provisions of the Consent, including the provisions thereof pertaining to
the rights and responsibilities of Grantor and Secured Party. In the event that
any provision of this Security Agreement except Section 15 is in conflict with
the terms of the Consent, the Consent shall control.

 

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(b) Section 15 of the Security Agreement is amended and restated in its entirety
as follows:

Termination; Assignment, etc. Upon the termination of the PPPFA, the security
interest created in Section 2(a), along with the security interest created by
Section 2(c) with respect to Section 2(a), shall terminate. Upon either
(a) receipt by either of the Pension Plans of the final Quarterly Contingent
Payment or (b) such time as there no longer exists any UBL with respect to both
of the Pension Plans, this Security Agreement, the security interests created by
Section 2(b), and any security interest created by Section 2(c) with respect to
Section 2(b) shall also terminate. In either such termination event, the Secured
Party agrees to execute such releases of liens on the applicable Collateral as
Grantor may reasonably request at Grantor’s sole expense. No waiver by any Party
of any default shall be effective unless in writing nor operate as a waiver of
any other default or of the same default on a future occasion. In the event of a
sale or assignment of part or all of the Secured Obligations by the Secured
Party, Secured Party may assign or transfer its rights and interest under this
Security Agreement in whole or in part to the purchaser or purchasers of such
Secured Obligations, whereupon such purchaser or purchasers shall become vested
with all of the powers and rights of the Secured Party hereunder.

4. Amendment to Amended Consent Escrow Agreement. The Company and PBGC shall use
commercially reasonable efforts (which efforts shall not require the payment of
any amounts, incurrence of any liabilities or giving of any other consideration
of any kind) to enter into (and to cause the Escrow Agent to enter into) an
amendment to the Amended Consent Escrow Agreement making conforming changes
consistent with the terms of this Amendment and otherwise reasonably acceptable
to each of the Company and PBGC as soon as reasonably practicable following the
Effective Date.

5. Conditions Precedent. Except to any extent otherwise expressly provided
herein, this Amendment shall become effective upon the execution and delivery
hereof (or counterparts hereof) by each of the Company, the other Sears Parties,
and PBGC (such date, the “Effective Date”).

6. Intent of the Parties. For the avoidance of doubt, the parties to this
Amendment intend that funds generated from the monetization of the Craftsman
Mortgaged Properties (by sale, financing, sale/leaseback or other transaction
similar to the foregoing) and contributed to the Escrow Account or either
Pension Plan (or otherwise contributed to the Escrow Account or either Pension
Plan) in accordance with the terms of this Amendment and Schedule 1 hereto shall
be on account of and in exchange for the release of the Residual 2019
Contribution Liens.

 

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7. Miscellaneous.

(a) This Amendment shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and permitted assigns of the Parties.

(b) Nothing in this Amendment shall constitute a waiver (by laches or otherwise)
or abrogation of any Forbearance Termination Event that exists and is ongoing as
of the date hereof.

(c) This Amendment may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Amendment by fax transmission or other electronic mail
transmission (e.g., “pdf” or “tif”) shall be effective as delivery of a manually
executed counterpart of this Amendment.

(d) This Amendment shall be governed by and construed and enforced in accordance
with the laws of the State of New York (excluding any conflicts-of-law rule or
principle that might refer same to the laws of another jurisdiction). The terms
of Sections 11.02, 11.04 and 11.12 of the PPPFA are incorporated herein by
reference, with any necessary conforming change, and the Parties agree to such
terms.

(e) This Amendment shall not be altered, amended, changed or modified in any
respect or particular unless each such alteration, amendment, change or
modification is made in accordance with the terms and provisions of
Section 11.06 of the PPPFA. After giving effect to this Amendment, except as
expressly set forth herein, each Transaction Document as amended hereby shall be
and remain in full force and effect in accordance with its terms and hereby is
ratified and confirmed in all respects. The execution, delivery, and performance
of this Amendment shall not operate, except as expressly set forth herein, as a
waiver of, consent to, or a modification or amendment of, any right, power, or
remedy of PBGC under any Transaction Document or otherwise.

(f) This Amendment is a Transaction Document. The Company and each other Sears
Party hereby expressly reaffirms that, except as expressly set forth herein,
(i) it is bound by all terms of the PPPFA and the other Transaction Documents
(each as amended hereby) applicable to it and (ii) it is responsible for the
observance and full performance of its respective obligations thereunder.

 

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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed
and delivered by their duly authorized officers as of the day and year first
above written.

 

SEARS HOLDINGS CORPORATION

By:  

/s/ Robert A. Riecker

Name:   Robert A. Riecker Title:   Chief Financial Officer SEARS, ROEBUCK AND
CO.

By:  

/s/ Robert A. Riecker

Name:   Robert A. Riecker Title:   Chief Financial Officer SEARS BRANDS, L.L.C.

By:  

/s/ Robert A. Riecker

Name:   Robert A. Riecker Title:   Vice President KCD IP, LLC

By:  

/s/ Robert A. Riecker

Name:   Robert A. Riecker Title:   Vice President SEARS ROEBUCK ACCEPTANCE CORP.

By:  

/s/ Robert A. Riecker

Name:   Robert A. Riecker Title:   Chief Financial Officer

[SIGNATURE PAGE TO AMENDMENT]

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PENSION BENEFIT GUARANTY CORPORATION

By:  

/s/ Jim Donofrio

Name:   Jim Donofrio Title:   Acting Chief of Negotiations and   Restructuring

[SIGNATURE PAGE TO AMENDMENT]

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Schedule 1

 

Payor / Mortgagor

   Deposit
Amount  

Sears Roebuck & Co.

   $ 18,058,501  

Kmart Corp.

   $ 4,718,193  

Innovel Solutions, Inc.

   $ 9,223,306     

 

 

 

Total =

   $ 32,000,000