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Exhibit 10.20  

 
 

SEARS HOLDINGS CORP.    
    

3333
BEVERLY ROAD 

HOFFMAN
ESTATES, IL 60179 

April 19,
2005 

Dan
Laughlin

[address omitted] 

Dear
Dan, 

        This
letter will confirm our offer of employment as SVP/GMM, Appliances & Home Electronics, located in Hoffman Estates, Illinois, reporting to me. Your new position and
compensation will be effective as of the date of the close of the proposed Kmart/Sears merger, subject to approval by the Compensation Committee of the Sears Holdings Corporation Board of Directors. 

Your Sears Holdings Corporation Compensation  

        Your
Sears Holdings Corporation compensation package will consist of the following: 

	•
	Annual
base salary of $405,600, with increases based upon performance.

	•
	Participation
in the Sears Holdings Corporation Annual Incentive Plan. Your annual incentive opportunity at target equals 60% of base salary, or $243,360, on an annualized
basis. The detailed performance goals of your annual incentive plan will be determined following the close of the proposed Kmart / Sears merger. The annual incentive for each plan year will be payable
by April 15 of the following year, provided that you are actively employed at the payment date.

	•
	Participation
in the Sears Holdings Corporation Long Term Incentive Plan (SHC LTIP). Your target award for the 2005 through 2007 plan cycle is $2,250,000. This award is
payable at the end of the plan cycle; the actual amount of the award you receive will depend on Sears Holdings Corporation Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). The
detailed EBITDA goals will be determined following the close of the proposed Kmart / Sears merger. Additional details of the plan are included in the attached plan summary.

	•
	You
will participate in all employee benefit programs on a basis no less favorable than other executives at your level, in accordance with the applicable terms of those
programs.

	•
	You
will be asked to sign an Executive Severance / Non-Compete Agreement and an Executive Non-Disclosure and Non-Solicitation of Employees Agreement as a condition of your
employment. If you are involuntarily terminated from Sears for any reason other than cause, death, total and permanent disability, resignation, or retirement after age 65, you will receive one year of
pay continuation, equal to your base salary at the time of termination. In consideration for these severance terms, you agree not to disclose confidential information and not to solicit employees. You
would also agree not to aid, assist or render services for any 'Competitor' (as defined in the agreement) for one year following termination of employment.

	•
	The
Executive Severance/Non-Compete Agreement and Executive Non-Disclosure and Non-Solicitation of Employee Agreement that you have and Sears, Roebuck and Co. have
previously executed will remain in effect for the 24 month period following the date of a Change of Control as defined in the Executive Severance/Non-Compete Agreement. 

Your Current Sears, Roebuck and Co. Compensation  

        Upon
the close of the proposed Kmart/Sears merger, the following will occur. 

	•
	The
2005—2007 Sears, Roebuck and Co. Long Term Incentive Plan (SRC LTIP) will be cancelled as of the date of close and no awards will be paid from that plan.
Your SHC LTIP grant, described above, will replace your SRC LTIP award.

	•
	The
2005 Sears, Roebuck and Co. Annual Incentive Plan (SRC AIP) will be cancelled as of the date of close and no awards will be paid from that plan. Your participation in
the SRC AIP will be replaced with your participation in the SHC AIP plan, at the target level described above.

	•
	A
portion of your current Sears restricted shares will vest at close; the remaining shares will be converted to Sears Holdings Corp. restricted shares, with the same
restrictions as the original grant, at a ratio of one Sears Holdings Corp. share for every two Sears, Roebuck and Co. shares.

	•
	Your
Sears, Roebuck and Co. stock options will be cashed out as of the date of close. The value you will receive will be equal to the difference between the blended merger
price and the exercise price of your options.

	•
	If
you have Sears, Roebuck and Co. shares held in the Sears, Roebuck and Co. 401(k) Plan and Sears Share Units in the Supplemental 401(k) Plan, the treatment will be the
same as all other participants in the plan.

	•
	If
you have a Sears Stock Unit balance in the Sears, Roebuck and Co. Deferred Compensation Plan, the treatment will be the same as all other participants in the plan.

	•
	If
you have contributed during the first quarter of 2005 to the Associate Stock Purchase Plan, the treatment of will be the same as all other participants in the plan. 

        I'm
pleased to have you as part of the new Sears Holdings Corporation team. 

	Sincerely,	 	 
	

/s/  ROBERT LUSE      
 Robert Luse	
 	

4/19/05
 Date

	

Accepted	
 	

/s/  DANIEL F. LAUGHLIN      
 Daniel F. Laughlin	
 	

4/19/05
 Date
	cc:    Personnel File	 	 

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Exhibit 10.35  

FIRST AMENDMENT  

        FIRST AMENDMENT, dated as of November 4, 2005 (this "Amendment"), to the CREDIT AGREEMENT, dated as of
February 22, 2005 (the "Credit Agreement"), among SEARS HOLDINGS CORPORATION ("Holdings"), SEARS
ROEBUCK ACCEPTANCE CORP. ("SRAC"), KMART CORPORATION ("Kmart Corp."; together with SRAC, the
"Borrowers"), the Lenders party thereto, certain other parties, and JPMORGAN CHASE BANK, N.A., as administrative agent (the
"Agent") for the Lenders. 

W I T N E S S E T H: 

        WHEREAS,
Holdings and/or certain of its affiliates intend to enter into a series of transactions pursuant to which (i) an Affiliate of Ares Management LLC will acquire an equity
interest and an option to acquire additional equity interests in Orchard Supply Hardware Stores Corporation ("Orchard Holdco"), (ii) Orchard Holdco and/or its Subsidiaries will issue certain
debt obligations, and (iii) Sears, Roebuck and Co. will receive, directly or indirectly, a dividend from the proceeds of the sale of equity interests and the incurrence of debt described above
(collectively, the "Transactions"); 

        WHEREAS,
Orchard Holdco is a Subsidiary of Holdings and the sole member of Orchard Supply Hardware LLC (formerly, Orchard Supply Hardware Corporation) ("Orchard Opco"); 

        WHEREAS,
Orchard Opco is party as a Guarantor and Grantor to the Guarantee and Collateral Agreement; 

        WHEREAS,
Holdings and the Borrowers have requested that the Lenders agree to amend certain provisions of the Credit Agreement as described herein; and 

        WHEREAS,
the parties hereto are willing to amend such provisions on and subject to the terms and conditions herein; 

        NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

        Section
1.    Definitions.    Unless otherwise defined herein, terms defined in the Credit Agreement shall have those
meanings when used herein. 

        Section
2.    Consent to Transactions.    Notwithstanding any provision of the Credit Agreement or any of the other
Loan Documents, the Lenders hereby consent to, and waive any default that would otherwise arise out of, the consummation of the Transactions. 

        Section
3.    Consent to Release.    The Lenders hereby consent to, and direct the Agent to effectuate, the release of
Orchard Opco from its guarantee under the Guarantee and Collateral Agreement and from any other obligations of Orchard Opco under the Loan Documents and the release by the Agent of any Collateral
pledged by Orchard Opco as security for the obligations under the Loan Documents. The Lenders acknowledge and agree that, from and after the date this First Amendment shall take effect, Orchard Opco
shall cease to be a Loan Party. 

        Section
4.    Amendment to Definitions.    

        (a)   The
definition of "Consolidated" in Section 1.01 of the Credit Agreement is hereby amended and restated in its entirety as follows: 

        "Consolidated" refers to the consolidation of accounts of Holdings and its Subsidiaries, excluding Sears Canada and Orchard Supply
Hardware, in acc ordance with GAAP and as presented on a GAAP basis. It is understood that, for the purposes of any calculation pursuant to this Agreement relating to financial matters with respect to
Holdings, each provision of Section 7.01(k) shall be deemed to have been complied with, whether or not compliance with such provision is required. 

        (b)   The
definition of "Subsidiary" contained in Section 1.01 of the Credit Agreement is hereby amended by adding the following proviso to the end thereof prior to the
period: 

;
provided, that Unrestricted Subsidiaries shall be deemed not to constitute "Subsidiaries" for the purposes of this Agreement (other than the definitions of "Orchard Supply Hardware" and
"Unrestricted Subsidiary" and the first and second usage of the term "Subsidiary" in Section 7.01(k)) 

        Section
5.    New Definitions.    The following new definitions are hereby added to Section 1.01 of the Credit
Agreement in the appropriate alphabetical order: 

        "First Amendment" means the First Amendment to this Agreement, dated as of November 4, 2005. 

        "First Amendment Effective Date" means the date upon which the First Amendment shall take effect in accordance with its terms. "Orchard
Supply Hardware" means the collective reference to (i) OSH, (ii) any Subsidiary of OSH, (iii) any entity which may hereafter own 100% of the equity interests of OSH and the equity
interests of which are owned in part by Ares Management LLC (or an Affiliate thereof) and in part by Holdings or a Subsidiary of Holdings and (iv) any Subsidiary of the entity referred
to in clause (iii). 

        "OSH" means Orchard Supply Hardware Stores Corporation, a Delaware corporation. 

        "Unrestricted Subsidiary" means OSH and any other Person that qualifies under the definition of Orchard Supply Hardware, provided, that,
in each case, (i) at no time shall any creditor of any such Person have any claim (whether pursuant to a guarantee or otherwise) against Holdings or any of its other Subsidiaries (other than
another Unrestricted Subsidiary) in respect of any Debt or other obligation (except for obligations arising by operation of law, including joint and several liabilities for taxes, ERISA and similar
items) of any such Person, other than (a) claims arising or relating to the period or transactions effected prior to the First Amendment Effective Date and (b) claims of trade vendors
incurred in the ordinary course; (ii) neither Holdings nor any of its Subsidiaries (other than another Unrestricted Subsidiary) shall become a general partner of any such Person;
(iii) no default with respect to any Debt of any such Person (including any right which the holders thereof may have to take enforcement action against any such Person) shall permit, solely as
a result of such Debt being in default or accelerated (upon notice, lapse of time or both), any holder of any Debt of Holdings or its other Subsidiaries (other than another Unrestricted Subsidiary) to
declare a default on such other Debt or cause the payment thereof to be accelerated or payable prior to its final scheduled maturity; and (iv) no such Person shall own any equity interests of,
or own or hold any Lien on any property of, any other Subsidiary of Holdings (other than another Unrestricted Subsidiary). 

        Section
6.    Section 6.02(h).    Section 6.02(h) of the Credit Agreement is hereby amended by adding the words
"or Orchard Supply Hardware" after the words "Sears Canada". 

        Section
7.    New Event of Default.    The following new paragraph (k) is hereby added to Section 7.01
of the Credit Agreement immediately after paragraph (j): 

        "(k)    (i) Orchard
Supply Hardware shall cease to qualify as an "Unrestricted Subsidiary" and shall qualify as a Subsidiary or (ii) at any time after the date
that is 120 days after the First Amendment Effective Date (unless no Person that qualifies under the definition of Orchard Supply Hardware is a Subsidiary of Holdings), Holdings or any of its
Subsidiaries, on the one hand, and Orchard Supply Hardware, on the other hand, shall (w) fail to maintain books separate from those of the other, (x) fail to maintain bank accounts
separate from those of the other, (y) commingle a material portion of their assets with those of the other or (z) in the case of Holdings or any of its Subsidiaries, make or agree to
make any payment to a creditor of any Unrestricted Subsidiary in its capacity as such, other than as contemplated by the definition of "Unrestricted Subsidiary";" 

        Section
8.    Representations and Warranties.    Each of Holdings and each Borrower represents and warrants that the
representations and warranties contained in Section 5.01 of the Credit Agreement (except the representations set forth in subsections (g), (h) and (i) thereof), after giving effect to
this Amendment, are true and correct in all material respects, except where such representations and warranties 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 represents and warrants that, after giving effect to this Amendment and the Borrowing Base recalculation
referred to in Section 6(c) below, no Default or Event of Default has occurred and is continuing. 

        Section
9.    Effectiveness.    This Amendment shall be effective on and as of the date on which (a) this
Amendment shall have been executed and delivered by the Borrowers and Holdings, (b) the Agent shall have received executed letters with respect to this Amendment in substantially the form
attached hereto as Exhibit A (a "Lender Consent Letter") from the Required Lenders and (c) the Agent shall have received a Borrowing Base Certificate with calculations giving effect to
this Amendment. 

        Section
10.    Continuing Effect of Loan Documents.    This Amendment shall not constitute a waiver, amendment or
modification of any other provision of the Loan Documents not expressly referred to herein and shall not be construed as a waiver or consent to any further or future action on the part of the Loan
Parties. Except as expressly amended or modified herein, the provisions of the Loan Documents are and shall remain in full force and effect. 

        Section
11.    Counterparts; Binding Effect.    (a) This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same
instrument. 

        (b)   The
execution and delivery of a Lender Consent Letter with respect to this Amendment by any Lender shall be binding upon each of its successors and assigns and binding
in respect of all of its Commitments and Extensions of Credit, including any Commitments or Extensions of Credit acquired subsequent to its execution and delivery hereof and prior to the effectiveness
hereof. 

        Section
12.    Payment of Expenses.    The Borrowers agree to pay or reimburse the Agent for all of its reasonable
out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of this Amendment and any other documents prepared in connection herewith, and the consummation
and administration of the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Agent. 

        Section
13.    GOVERNING LAW.    THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  

[Rest of page left intentionally blank] 

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

	

 	
 	

SEARS HOLDINGS CORPORATION
	

 	
 	

By:	
 	

/s/  ALLEN R. RAVAS      
 Name: Allen R. Ravas

Title: Senior Vice President, Finance & Treasurer
	

 	
 	

SEARS ROEBUCK ACCEPTANCE CORP.
	

 	
 	

By:	
 	

/s/  GEORGE F. SLOOK      
 Name: George F. Slook

Title: Vice President, Finance
	

 	
 	

MART CORPORATION
	

 	
 	

By:	
 	

/s/  ALLEN R. RAVAS      
 Name: Allen R. Ravas

Title: Vice President, Treasurer
	

 	
 	

JPMORGAN CHASE BANK, N.A., as Agent
	

 	
 	

By:	
 	

/s/  TERI STREUSAND      
 Name: Teri Streusand

Title: Vice President

EXHIBIT A  

 
 

LENDER CONSENT LETTER
  SEARS HOLDINGS CORPORATION CREDIT AGREEMENT
  DATED AS OF FEBRUARY 22, 2005    
    

	To:	JPMorgan Chase Bank, N.A., as Agent

270 Park Avenue

New York, New York 10017

Ladies and Gentlemen: 

        Reference
is made to the Credit Agreement, dated as of February 22, 2005 (the "Credit Agreement"), among SEARS HOLDINGS CORPORATION
("Holdings"), SEARS ROEBUCK ACCEPTANCE CORP. ("SRAC"), KMART CORPORATION ("Kmart
Corp."; together with SRAC, the "Borrowers"), the Lenders party thereto, certain other parties, and JPMORGAN CHASE BANK, N.A.,
as administrative agent for the Lenders. 

        Holdings
and the Borrowers have requested certain amendments to the Credit Agreement on the terms and conditions described in the First Amendment to the Credit Agreement in the form
attached hereto as Exhibit A (the "First Amendment"). 

        Pursuant
to Section 9.01 of the Credit Agreement, the undersigned Lender hereby agrees to all of the terms and conditions of the First Amendment. 

	

 	

Very truly yours,
	
	 	 
	 	
 (NAME OF LENDER)
	
	 	 
	

 	

By:	

	 	Name:

Title

Dated as of November 4, 2005 

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LENDER CONSENT LETTER SEARS HOLDINGS CORPORATION CREDIT AGREEMENT DATED AS OF FEBRUARY 22, 2005

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