THE USE OF “[***]” IN THIS EXHIBIT INDICATES THAT A CONFIDENTIAL PORTION HAS
BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Exhibit 10.2

Amendment No. 4 to Merchandising Agreement

This Amendment No. 4 to Merchandising Agreement (this “Amendment”) is between
(1) Sears, Roebuck and Co., a New York corporation (“SRC”), Kmart Corporation, a
Michigan corporation (together with SRC, “Seller”), and Sears Holdings
Corporation, a Delaware corporation (“SHC”), and (2) Sears Hometown and Outlet
Stores, Inc., a Delaware corporation (“SHO”), Sears Authorized Hometown Stores,
LLC, a Delaware limited liability company (“SAHS”), and Sears Outlet Stores,
L.L.C., a Delaware limited liability company (together with SHO and SAHS,
“Buyer”). This Amendment amends the Merchandising Agreement between Seller and
Buyer dated August 8, 2012, as amended (as amended, the “Merchandising
Agreement”), is signed as of the dates listed below and is retro-active to
January 31, 2016 (the “Amendment Effective Date”).

Preliminary Statements

1. Effective, May 4, 2015 Buyer delivered a notice seeking to terminate
Section 10 (Product Warranties And Returns) and Section 11 (Product Servicing)
of the Merchandising Agreement (the “SHO Termination Notice”); however Seller
believes that since that date Buyer has continued to receive the benefits under
such provision and Seller believes that Buyer has, since that date, unilaterally
reduced the amount Buyer has been paying Seller for the Seller Warranty on
No-Vendor-Warranty Products that are Outlet Products to the rate of [***]%
multiplied by “DOS Cost” (as that term is defined in the Merchandising
Agreement). Buyer believes that it has been, and is, entitled to pay at the
[***]% rate. Seller believes that it has been, and is, entitled to be paid at a
rate of [***]% as set forth in the Merchandising Agreement. The difference
between the amount that Buyer has paid to Seller at the rate of [***]% and the
amount that Seller believes it has been entitled to be paid at the rate of
[***]% is the “Warranty-Charge Difference.”

2. Buyer has prior to the Amendment Effective Date, claimed that Buyer and/or
its Affiliates were improperly charged for repairs of Products under the
Merchandising Agreement and/or the Services Agreement by SHMC and its
Affiliates, including, without limitation, claims that Buyer and/or its
Affiliates were improperly charged for Store Stock repairs, claims that SHMC
and/or its Affiliates provided insufficient information for such repairs, claims
that Outlet Products were subject to a SHMC or its Affiliates warranty prior to
their sale to consumer, claims that Buyer and its Affiliates should not have
been charged for repairs and attempted repairs of products under warranty,
claims that certain repairs where charged to Buyer and/or its Affiliates in
error, claims that SHMC and/or its Affiliates applied the incorrect rate, claims
that Buyer and/or its Affiliates should not have been charged for “no trouble
found” charges, and claims that SHMC and/or its Affiliates should have provided
replacement products for junked products (collectively, the “SHO Repair
Claims”).

3. In 2014 Seller invoiced Buyer for $858,000 for IT Services that Seller
believes were owed. Buyer believes these amounts were in excess of agreed-upon
amounts. In September 2014 Buyer withheld this amount from the weekly invoice
paid to Seller in Seller’s fiscal week 32.

4. In 2014 Seller invoiced Buyer $343,000 for service order transfer items that
Seller believes were owed. Buyer believes these amounts were in excess of
agreed-upon amounts. In September 2014 Buyer withheld this amount from weekly
invoices paid to Seller in Seller’s fiscal week 32.

5. The Warranty-Charge Difference and the amounts described above in paragraphs
2, 3 and 4 together are referred to as the “Disputed Amounts.”

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The use of “[***]” in this Exhibit indicates that a confidential portion has
been omitted pursuant to a request for confidential treatment. The omitted
material has been filed separately with the Securities and Exchange Commission.

Terms and Conditions

NOW, THEREFORE, in consideration of the above premises and the mutual covenants
and other good and valuable consideration contained herein, the parties agree as
follows:

A) Revocation of Termination and Amendments. Effective as of Amendment Effective
Date, the parties agree as follows:

1) Revocation. Retroactive to the date of the SHO Termination Notice, Buyer
revokes the SHO Termination Notice. The Parties agree that the SHO Termination
Notice is therefore null and void ab initio and the Seller Warranty is not
subject to renegotiation until the 4th anniversary of the Merchandising
Agreement.

2) Warranty-Charge Difference. Beginning on the Amendment Effective Date, Buyer
shall re-commence paying Seller for the Seller Warranty on No-Vendor Warranty
Products that are Outlet Products (delivered to Buyer on and after January 31,
2016) in accordance with the provisions of the Merchandising Agreement (e.g., at
the rate of [***]% multiplied by the DOS Cost as specified in Appendix 4(b)(i)
of the Merchandising Agreement).

3) SHO Payment and Seller Waiver. Buyer agrees to immediately pay Seller
$600,000 (the “Buyer Payment”). Conditioned upon the Buyer Payment Seller
forever waives all of its rights to, and releases Buyer from all obligations to
pay (to the extent that Buyer has not paid such amounts), the Disputed Amounts.

4) Buyer Waiver. Buyer forever waives all of its rights to, and releases Seller
from all of the SHO Repair Claims.

B) SHC’S Sole Obligation. Sears Holding Corporation (“SHC”) is signing this
Amendment pursuant to Section 21 (SHC’S Sole Obligation) of the Merchandising
Agreement. SHC’s signature does not expand its obligations under the
Merchandising Agreement.

C) Merchandising Agreement Continues. Except as expressly amended herein, the
Merchandising Agreement shall continue in full force and effect in accordance
with its terms, without any waiver, amendment or other modification of any
provision thereof, including the parties’ choice of Illinois law (pursuant to
Section 22.(s) of the Merchandising Agreement), which also applies to this
Amendment.

Signature Page Follows

 

2

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SEARS, ROEBUCK AND CO.

KMART CORPORATION

   

SEARS HOMETOWN AND OUTLET

STORES, INC.

By: Sears Holdings Management Corporation, their agent     By:  

/s/ RYAN D. ROBINSON

 

By:

 

 

/s/ ROBERT A. RIECKER

    Senior Vice President, Chief Administrative Officer and Chief Financial
Officer

VP Controller

Date: May 10, 2016

    Date: May 11, 2016 SEARS HOLDINGS CORPORATION     SEARS AUTHORIZED HOMETOWN
STORES, LLC By:  

/s/ ROBERT A. RIECKER

    By:  

/s/ CHARLES J. HANSEN

VP Controller

Date: May 10, 2016

   

Vice President

Date: May 11, 2016

    SEARS OUTLET STORES, L.L.C.       By:  

/s/ CHARLES J. HANSEN

     

Vice President

Date: May 11, 2016