<SEC-DOCUMENT>0001310067-16-000069.txt : 20160526 <SEC-HEADER>0001310067-16-000069.hdr.sgml : 20160526 <ACCEPTANCE-DATETIME>20160526061007 ACCESSION NUMBER: 0001310067-16-000069 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20151031 FILED AS OF DATE: 20160526 DATE AS OF CHANGE: 20160526 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEARS HOLDINGS CORP CENTRAL INDEX KEY: 0001310067 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-DEPARTMENT STORES [5311] IRS NUMBER: 201920798 STATE OF INCORPORATION: DE FISCAL YEAR END: 0201 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-36693 FILM NUMBER: 161676176 BUSINESS ADDRESS: STREET 1: 3333 BEVERLY ROAD CITY: HOFFMAN ESTATES STATE: IL ZIP: 60179 BUSINESS PHONE: 847-286-2500 MAIL ADDRESS: STREET 1: 3333 BEVERLY ROAD CITY: HOFFMAN ESTATES STATE: IL ZIP: 60179 FORMER COMPANY: FORMER CONFORMED NAME: Sears Holdings CORP DATE OF NAME CHANGE: 20041129 </SEC-HEADER> <DOCUMENT> <TYPE>10-Q/A <SEQUENCE>1 <FILENAME>shldq32015a.htm <DESCRIPTION>AMENDMENT NO. 1 TO FORM 10-Q <TEXT> <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <!-- Document created using Wdesk 1 --> <!-- Copyright 2016 Workiva --> <title>Document</title> </head> <body style="font-family:Times New Roman;font-size:10pt;"> <div><a name="s828F22CA903D76A626380B96965B9305"></a></div><div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:96.29629629629629%;border-collapse:collapse;text-align:left;"><tr><td colspan="1"></td></tr><tr><td style="width:100%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;"><div style="overflow:hidden;height:5px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr></table></div></div><div style="line-height:120%;padding-top:6px;text-align:center;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">U</font><font style="font-family:inherit;font-size:14pt;font-weight:bold;">NITED</font><font style="font-family:inherit;font-size:18pt;font-weight:bold;"> S</font><font style="font-family:inherit;font-size:14pt;font-weight:bold;">TATES</font></div><div style="line-height:120%;text-align:center;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">S</font><font style="font-family:inherit;font-size:14pt;font-weight:bold;">ECURITIES</font><font style="font-family:inherit;font-size:18pt;font-weight:bold;"> A</font><font style="font-family:inherit;font-size:14pt;font-weight:bold;">ND</font><font style="font-family:inherit;font-size:18pt;font-weight:bold;"> E</font><font style="font-family:inherit;font-size:14pt;font-weight:bold;">XCHANGE</font><font style="font-family:inherit;font-size:18pt;font-weight:bold;"> C</font><font style="font-family:inherit;font-size:14pt;font-weight:bold;">OMMISSION</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">W</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">ASHINGTON</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;">, D.C. 20549</font></div><div style="line-height:120%;padding-top:6px;text-align:center;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">Amendment No. 1 </font></div><div style="line-height:120%;padding-top:6px;text-align:center;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">to</font></div><div style="line-height:120%;padding-top:6px;text-align:center;font-size:18pt;"><font style="font-family:inherit;font-size:18pt;font-weight:bold;">FORM 10-Q</font></div><table cellpadding="0" cellspacing="0" style="padding-top:6px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:144%;font-size:12pt;padding-left:12px;"><font style="font-family:Wingdings;font-size:12pt;">x</font></div></td><td style="vertical-align:top;"><div style="line-height:144%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 31, 2015 </font></div></td></tr></table><div style="line-height:144%;padding-top:6px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">O</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">R</font></div><table cellpadding="0" cellspacing="0" style="padding-top:6px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:48px;"></td><td></td></tr><tr><td style="vertical-align:top"><div style="line-height:144%;font-size:12pt;padding-left:12px;"><font style="font-family:Wingdings;font-size:12pt;">o</font></div></td><td style="vertical-align:top;"><div style="line-height:144%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></div></td></tr></table><div style="line-height:120%;padding-top:4px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Commission file number 000-51217, 001-36693</font></div><div style="line-height:120%;padding-top:4px;text-align:center;font-size:24pt;"><font style="font-family:inherit;font-size:24pt;font-weight:bold;">SEARS HOLDINGS CORPORATION</font></div><div style="line-height:144%;text-align:center;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(Exact name of registrant as specified in its charter)</font></div><div style="line-height:120%;padding-bottom:9px;text-align:left;font-size:9pt;"><font style="font-family:inherit;font-size:9pt;"><br></font></div><div style="line-height:120%;padding-left:4px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:95.06172839506173%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:50%;"></td><td style="width:50%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:10px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;padding-top:2px;text-align:center;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">D</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">ELAWARE</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">20-1920798</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(State of Incorporation)</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(I.R.S. Employer Identification No.)</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:13px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:13px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;padding-top:2px;text-align:center;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">3333 B</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">EVERLY</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> R</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">OAD</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">, H</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">OFFMAN</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;"> E</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">STATES</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">, I</font><font style="font-family:inherit;font-size:8pt;font-weight:bold;">LLINOIS</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">60179</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(Address of principal executive offices)</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">(Zip Code)</font></div></td></tr></table></div></div><div style="line-height:144%;padding-top:10px;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Registrant's Telephone Number, Including Area Code: (847) 286-2500</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:10pt;">Yes  </font><font style="font-family:Wingdings;font-size:12pt;">x</font><font style="font-family:inherit;font-size:10pt;">               No    </font><font style="font-family:Wingdings;font-size:12pt;">¨</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:10pt;">Yes    </font><font style="font-family:Wingdings;font-size:12pt;">x</font><font style="font-family:inherit;font-size:10pt;">          No    </font><font style="font-family:Wingdings;font-size:12pt;">¨</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:10pt;">Large accelerated filer   </font><font style="font-family:Wingdings;font-size:12pt;">x</font><font style="font-family:inherit;font-size:10pt;">  Accelerated filer    </font><font style="font-family:Wingdings;font-size:12pt;">¨</font><font style="font-family:inherit;font-size:10pt;">   Non-accelerated filer    </font><font style="font-family:Wingdings;font-size:12pt;">¨</font><font style="font-family:inherit;font-size:10pt;">   Smaller reporting company    </font><font style="font-family:Wingdings;font-size:12pt;">¨</font></div><div style="line-height:120%;padding-top:6px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:10pt;">Yes    </font><font style="font-family:Wingdings;font-size:12pt;">¨</font><font style="font-family:inherit;font-size:10pt;">            No    </font><font style="font-family:Wingdings;font-size:12pt;">x</font></div><div style="line-height:120%;padding-top:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">As of November 27, 2015, the registrant had 106,689,188 common shares, $0.01 par value, outstanding.</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:96.29629629629629%;border-collapse:collapse;text-align:left;"><tr><td colspan="1"></td></tr><tr><td style="width:100%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-top:1px solid #000000;"><div style="overflow:hidden;height:5px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:9.5pt;"><font style="font-family:inherit;font-size:9.5pt;"><br></font></div><div><br></div><hr style="page-break-after:always"><div><a name="s041282D2F467C95CC4DA0B96968CBFC4"></a></div><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Explanatory Note</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">This Amendment No. 1 to Form 10-Q (this “Amended Filing”) amends the Quarterly Report on Form 10-Q of Sears Holdings Corporation (the “Company”) for the third fiscal quarter ended October 31, 2015, which was originally filed on December 3, 2015 (the “Original Filing”). The Company is filing this Amended Filing solely for the purpose of refiling Exhibit 10.1 thereto to include certain portions of Exhibit 10.1 for which the Company previously requested confidential treatment. </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">This Amended Filing does not modify or update any part of or information set forth in the Original Filing other than Exhibit 10.1, and this Amended Filing continues to speak as of the date of the Original Filing.</font></div><div><br></div><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2</font></div></div><hr style="page-break-after:always"><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:144%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:left;font-size:9.5pt;"><font style="font-family:inherit;font-size:9.5pt;font-weight:bold;">PART II. OTHER INFORMATION</font></div><div style="line-height:144%;text-align:left;font-size:9.5pt;"><font style="font-family:inherit;font-size:9.5pt;"><br></font></div><div style="line-height:144%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">ITEM 6. EXHIBITS</font></div><div style="line-height:144%;text-align:left;font-size:9.5pt;"><font style="font-family:inherit;font-size:9.5pt;"><br></font></div><div style="line-height:120%;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;background-color:#ffffff;">(a) Exhibits.</font></div><div style="line-height:120%;padding-top:6px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;background-color:#ffffff;">An Exhibit Index has been filed as part of this Report on Page E-1.</font></div><div style="line-height:144%;text-align:left;font-size:9.5pt;"><font style="font-family:inherit;font-size:9.5pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:9.5pt;"><font style="font-family:inherit;font-size:9.5pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">3</font></div></div><hr style="page-break-after:always"><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">SIGNATURES</font></div><div style="line-height:120%;padding-bottom:9px;padding-top:12px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">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 thereunto duly authorized.  </font></div><div style="line-height:120%;padding-left:4px;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:99.35897435897436%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td style="width:56%;"></td><td style="width:8%;"></td><td style="width:36%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td colspan="2" style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;padding-top:2px;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">S</font><font style="font-family:inherit;font-size:9pt;">EARS</font><font style="font-family:inherit;font-size:10pt;"> H</font><font style="font-family:inherit;font-size:9pt;">OLDINGS</font><font style="font-family:inherit;font-size:10pt;"> C</font><font style="font-family:inherit;font-size:9pt;">ORPORATION</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Date: May 26, 2016</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">By:</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;padding-top:2px;text-align:center;padding-left:4px;font-size:10pt;"><font style="font-family:inherit;font-size:9pt;">/s/</font><font style="font-family:inherit;font-size:10pt;">    R</font><font style="font-family:inherit;font-size:9pt;">OBERT</font><font style="font-family:inherit;font-size:10pt;"> A. R</font><font style="font-family:inherit;font-size:9pt;">IECKER</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">Name:</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">Robert A. Riecker</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">Title:</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-top:2px;text-align:center;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;">Vice President, Controller and Chief</font></div><div style="padding-bottom:2px;text-align:center;padding-left:4px;font-size:8pt;"><font style="font-family:inherit;font-size:8pt;font-weight:bold;"> Accounting Officer</font></div></td></tr></table></div></div><div style="line-height:144%;padding-top:4px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:left;font-size:1pt;"><font style="font-family:inherit;font-size:1pt;"><br></font></div><div style="line-height:144%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div style="text-align:center;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">4</font></div></div><hr style="page-break-after:always"><div><a name="sF08E18E80081464D4AB70B9696B40BC3"></a></div><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:144%;padding-bottom:4px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">SEARS HOLDINGS CORPORATION</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">EXHIBIT INDEX</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="3"></td></tr><tr><td style="width:10%;"></td><td style="width:1%;"></td><td style="width:89%;"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Exhibit</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:center;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Description</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">3.1</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K, dated March 24, 2005, filed on March 24, 2005 (File No. 000-51217)).</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">3.2</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Amended and Restated By-Laws (incorporated by reference to Exhibit 3.2 to Registrant's Current Report on Form 8-K, dated January 22, 2014, filed on January 24, 2014 (File No. 000-51217)).</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">*10.1</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Summary of Proposed Terms Regarding the Pension Plan Protection and Forbearance Agreement Between PBGC and Sears, dated September 4, 2015, by and between Sears Holdings Corporation and the Pension Benefit Guaranty Corporation.</font><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">(1)</sup></font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:14px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:14px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:14px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">*31.1</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">*31.2</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">**32.1</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">**32.2</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</font></div></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:right;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">**101</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The following financial information from the Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2015, formatted in XBRL (eXtensible Business Reporting Language) and furnished electronically herewith: (i) the Condensed Consolidated Statements of Operations (Unaudited) for the 13 and 39 Weeks Ended October 31, 2015 and November 1, 2014; (ii) the Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the 13 and 39 Weeks Ended October 31, 2015 and November 1, 2014; (iii) the Condensed Consolidated Balance Sheets (Unaudited) as of October 31, 2015, November 1, 2014 and January 31, 2015; (iv) the Condensed Consolidated Statements of Cash Flows (Unaudited) for the 39 Weeks Ended October 31, 2015 and November 1, 2014; (v) the Condensed Consolidated Statements of Equity (Unaudited) for the 39 Weeks Ended October 31, 2015 and November 1, 2014; and (vi) the Notes to the Condensed Consolidated Financial Statements (Unaudited).</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">__________________</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:5%;"></td><td style="width:95%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">*</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Filed herewith.</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">**</font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Previously filed.</font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">(1)</sup> </font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Portions of Exhibit 10.1 have been omitted pursuant to a request for confidential treatment.The omitted material has been filed separately with the Securities and Exchange Commission.</font></div><div style="text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td></tr></table></div></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> <br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">E-1</font></div></div> </body> </html> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-10.1 <SEQUENCE>2 <FILENAME>shldex101q32015a.htm <DESCRIPTION>SUMMARY OF PROPOSED TERMS BETWEEN PBGC AND SEARS <TEXT> <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <!-- Document created using Wdesk 1 --> <!-- Copyright 2016 Workiva --> <title>Exhibit</title> </head> <body style="font-family:Times New Roman;font-size:10pt;"> <div><a name="s8A1DFB326E4C54CCAD2CBF16F972F04B"></a></div><div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Portions of this document have been redacted pursuant to a Request for Confidential Treatment filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. Redacted portions are indicated with the notation “[**]”.</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Exhibit 10.1</font></div><div style="line-height:120%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">EXECUTION VERSION</font></div><div style="line-height:120%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:right;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></div><div><br></div><div style="line-height:120%;padding-bottom:16px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">Summary of Proposed Terms Regarding the Pension Plan Protection and Forbearance Agreement Between PBGC and Sears</font></div><div style="line-height:120%;padding-bottom:16px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-style:italic;font-weight:bold;">The terms set forth in this Summary of Proposed Terms are being provided as part of a comprehensive compromise, each element of which is consideration for the other elements. This Summary of Proposed Terms is proffered in the nature of a comprehensive settlement proposal in furtherance of settlement discussions, and is entitled to the protections of Federal Rule of Evidence 408 and any other applicable statutes or doctrines protecting the use or disclosure of confidential information and information exchanged in the context of settlement discussions. The transactions described herein are subject in all respects to, among other things, negotiation of definitive documentation, all of which documentation shall be in form and substance satisfactory to each of the Company and PBGC (each as defined below), and obtaining of all necessary corporate and other approvals by the Company and PBGC. Prior to satisfaction of all such conditions, nothing in this Summary of Proposed Terms shall be binding on any party; provided however, that notwithstanding anything herein to the contrary, the provisions set forth in the section entitled “Binding Term Sheet Provisions” shall be binding upon the Company and PBGC according to the terms thereof upon mutual execution and delivery of the signature pages hereto.</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td colspan="2" style="vertical-align:top;border-bottom:1px solid #000000;background-color:#e6e6e6;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">I.</font><font style="font-family:inherit;font-size:10pt;"> <br></font><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">RELEVANT ENTITIES</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #00000a;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-top:1px solid #00000a;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">The Company and Its Subsidiaries</font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Company:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Sears Holdings Corporation, a Delaware corporation (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Company</font><font style="font-family:inherit;font-size:12pt;">”).</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Pension Plan:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Sears Holdings Pension Plan, as amended and restated effective January 1, 2014 (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Pension Plan</font><font style="font-family:inherit;font-size:12pt;">”) </font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Real Estate Subsidiaries:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">SRC Depositor Corporation, a Delaware corporation (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Depositor</font><font style="font-family:inherit;font-size:12pt;">”).</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The following indirect wholly-owned subsidiaries of the Company are collectively referred to as the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">RE Subsidiaries</font><font style="font-family:inherit;font-size:12pt;">”:</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">SRC O.P. Corporation, a Delaware corporation, which holds title to the Maryland properties and is the owner participant (beneficiary) of SRC Facilities Statutory Trust</font></div></td></tr></table></div></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><hr style="page-break-after:always"><div><a name="sDF7EA280F67C5D0BA9FE759C2F619C6E"></a></div><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">     No. 2003-A;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">SRC Real Estate (TX), LP, a Delaware limited partnership, which holds title to the Texas properties; and</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">SRC Facilities Statutory Trust No. 2003-A, a Delaware statutory trust, which holds title to the remaining properties and directly and indirectly owns all interests in SRC Real Estate (TX), LP.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Attached as </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 1</font><font style="font-family:inherit;font-size:12pt;"> hereto is an ownership chart relating to the Depositor and the RE Subsidiaries.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Intellectual Property Subsidiary:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">KCD IP, LLC, a Delaware limited liability company (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Subsidiary</font><font style="font-family:inherit;font-size:12pt;">”), which holds certain trademarks, intellectual property licenses (including, without limitation, those related to Kenmore, Craftsman and Diehard) and various ancillary agreements (collectively, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Assets</font><font style="font-family:inherit;font-size:12pt;">”).</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Other Company Subsidiaries:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Attached as </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 2</font><font style="font-family:inherit;font-size:12pt;"> hereto is a list of all of the direct or indirect subsidiaries of the Company (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Other Company Subsidiaries</font><font style="font-family:inherit;font-size:12pt;">” and the entirety of which, whether or not included on such list, and with the RE Subsidiaries, IP Subsidiary, Depositor and Company, collectively, “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Sears</font><font style="font-family:inherit;font-size:12pt;">”).</font><font style="font-family:inherit;font-size:12pt;"><sup style="vertical-align:top;line-height:120%;font-size:8pt">1</sup></font><font style="font-family:inherit;font-size:12pt;font-weight:bold;">  </font><font style="font-family:inherit;font-size:12pt;">A “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">subsidiary</font><font style="font-family:inherit;font-size:12pt;">” of the Company shall mean any entity that is in the Company’s “controlled group” as defined in Section 4001(a)(14) of the Employee Retirement Security Act of 1974 (as amended from time to time, together with any final regulations promulgated thereunder, “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">ERISA</font><font style="font-family:inherit;font-size:12pt;">”).</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #00000a;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">PBGC</font></div></td><td style="vertical-align:middle;border-bottom:1px solid #00000a;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Pension Benefit Guaranty Corporation as established by ERISA (“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">PBGC</font><font style="font-family:inherit;font-size:12pt;">”). </font></div></td></tr><tr><td colspan="2" style="vertical-align:top;border-bottom:1px solid #00000a;background-color:#e6e6e6;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;"><div style="padding-bottom:8px;padding-top:8px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">II.</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;"> </font><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;"><br>CURRENT CAPITAL STRUCTURE</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #00000a;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">REMIC Securitization</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #00000a;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #00000a;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Company shall represent, warrant and covenant, </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">inter</font><font style="font-family:inherit;font-size:12pt;"> </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">alia</font><font style="font-family:inherit;font-size:12pt;">,</font><font style="font-family:inherit;font-size:12pt;font-style:italic;"> </font><font style="font-family:inherit;font-size:12pt;">that:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">1. The Depositor has made loans (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Mortgage Loans</font><font style="font-family:inherit;font-size:12pt;">”) to the RE Subsidiaries secured by, </font><font style="font-family:inherit;font-size:12pt;font-style:italic;">inter alia</font><font style="font-family:inherit;font-size:12pt;">, mortgages on, and assignments of leases pertaining to, the properties held by the RE Subsidiaries.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2. The Depositor’s interests in the Mortgage Loans have been assigned to Wells Fargo Bank Minnesota, N.A., now known</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">                                                          </font></div><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">1</sup></font><font style="font-family:inherit;font-size:10pt;"> All such entities are acknowledged by the Company to be in the Company's "controlled group" as defined in ERISA Section 4001(a)(14).</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">as Wells Fargo Bank, N.A., as trustee for SRC Commercial Mortgage Trust 2003-1 (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">REMIC Issuer</font><font style="font-family:inherit;font-size:12pt;">”), which has in turn issued SRC Commercial Mortgage Trust 2003-1 Mortgage Pass-Through Certificates in the aggregate face amount of $1,312,416,000 (as amended, supplemented or otherwise modified, but only to the extent such amendments, supplements or other modifications (i) occur on or prior to the date of the Closing (and are disclosed to PBGC as set forth herein) or (ii) are permitted by the REMIC Amendment Covenant, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">REMIC Certificates</font><font style="font-family:inherit;font-size:12pt;">”) backed by the pool of Mortgage Loans pursuant to a Pooling and Servicing Agreement, dated as of November 24, 2003 (as amended, supplemented or otherwise modified, but only to the extent such amendments, supplements or other modifications (i) occur on or prior to the date of the Closing (and are disclosed to PBGC as set forth herein) or (ii) are permitted by the REMIC Amendment Covenant, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Pooling and Servicing Agreement</font><font style="font-family:inherit;font-size:12pt;">”). The REMIC Certificates, the agreements underlying the Mortgage Loans, the Master Lease (defined below), the Pooling and Servicing Agreement, and the agreements and other documents related thereto (each, as amended, supplemented or otherwise modified, but only to the extent such amendments, supplements or other modifications (i) occur on or prior to the date of the Closing (and are disclosed to PBGC as set forth herein) or (ii) are permitted by the REMIC Amendment Covenant) shall be referred to herein as the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">REMIC Transactional Documents</font><font style="font-family:inherit;font-size:12pt;">”.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">3. The regular interest REMIC Certificates are held by certain Other Company Subsidiaries (identified in </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 3</font><font style="font-family:inherit;font-size:12pt;"> attached hereto). The residual interest REMIC Certificate (which is a non‑economic residual interest) is held by the Depositor.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">4. Sears will continue to pay all rents as and when due (subject to any applicable grace periods) with respect to the real estate assets and mortgage loans related to the REMIC Certificates.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">5. The properties held by the RE Subsidiaries are subject to a master lease with Sears, Roebuck and Co. (as amended, supplemented or otherwise modified, but only to the extent such amendments, supplements or other modifications (i) occur on or prior to the date of the Closing (and are disclosed to PBGC as set forth herein) or (ii) are permitted by the REMIC Amendment Covenant, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Master Lease</font><font style="font-family:inherit;font-size:12pt;">”).</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">6. As of the Closing: (i) all of the RE Subsidiaries and the Depositor are in material compliance with their respective organizational documents; and (ii) to the Company’s knowledge, none of the parties to the REMIC Transactional Documents are in default thereunder nor does an event of default exist thereunder.</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">3</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Company shall promptly inform PBGC prior to Closing of any defaults or default waivers under the REMIC Transactional Documents or any material non-compliance with the organizational documents of any of the RE Subsidiaries or the Depositor. PBGC acknowledges that to its knowledge none of the parties to the REMIC Transactional Documents is in default thereunder and no event of default exists thereunder. PBGC agrees that if the Closing occurs it shall not assert that anything disclosed to it by the Company in connection with, or during the course of, the negotiation and entry into this term sheet or the definitive documentation prior to the date of Closing constitutes a breach of the representations set forth in this paragraph 6.</font></div><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">7. Prior to the Closing, the Company shall provide to PBGC a list of all of the sales, substitutions or transfers out of the REMIC structure of any Designated Assets (as defined below) from and after October 1, 2014 until the Closing.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #00000a;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">IP Securitization</font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Company shall further represent, warrant and covenant, </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">inter alia</font><font style="font-family:inherit;font-size:12pt;">, that:</font></div><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">1. The IP Subsidiary has issued KCD IP, LLC Asset-Backed Notes in the aggregate face amount of $1,800,000,000 (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Notes</font><font style="font-family:inherit;font-size:12pt;">” and the indenture governing such IP Notes, as amended, supplemented or otherwise modified, but only to the extent such amendments, supplements or other modifications (i) occur on or prior to the date of the Closing (and are disclosed to PBGC as set forth herein) or (ii) are permitted by the Indenture Amendment Covenant), the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Notes Indenture</font><font style="font-family:inherit;font-size:12pt;">”) secured by liens (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Note Liens</font><font style="font-family:inherit;font-size:12pt;">”) on the IP Assets. </font></div><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2. All IP Notes are held by Sears Reinsurance Company Ltd. (“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Sears Re</font><font style="font-family:inherit;font-size:12pt;">”), a Bermuda Class 3 insurer and a subsidiary of the Company.</font></div><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">3. Sears shall continue to pay all royalties as and when due (subject to any applicable grace periods) with respect to the IP Assets and the IP Notes.</font></div><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">4. As of the Closing: (i) the IP Subsidiary is in material compliance with its organizational documents, and (ii) to the Company’s knowledge, none of the parties to the IP Notes or the IP Notes Indenture are in default thereunder nor does an event of default exist thereunder. The Company shall promptly inform PBGC prior to Closing of any defaults or default waivers under the IP Notes or IP Notes Indenture or any material non-compliance with the organizational documents of the IP Subsidiary. PBGC acknowledges that, to its knowledge none of the parties to the IP Notes or the IP Notes Indenture is in default thereunder and no event of default exists thereunder. PBGC</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">4</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">agrees that if the Closing occurs it shall not assert that anything disclosed to it by the Company in connection with, or during the course of, the negotiation and entry into this term sheet or the definitive documentation prior to the date of Closing constitutes a breach of the representations set forth in this paragraph 4.</font></div><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">5. Prior to the Closing, the Company shall provide to PBGC a list of all of the sales, substitutions or transfers out of the IP Subsidiary of any Designated Assets from and after October 1, 2014 until the Closing.</font></div></td></tr><tr><td colspan="2" style="vertical-align:top;background-color:#e6e6e6;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">III.</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;"> </font><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;"><br>TRANSACTIONS</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #00000a;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Maintenance of REMIC Structure / REMIC Certificate Transfer</font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Ownership of the regular interest REMIC Certificates shall be transferred to the Depositor, with physical possession to be held by the Custodian (defined below) on behalf of PBGC. The existing REMIC securitization structure shall otherwise be left in place.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">RE Subsidiary Bankruptcy-Remoteness</font></div></td><td style="vertical-align:middle;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Company shall represent, warrant and covenant</font><font style="font-family:inherit;font-size:12pt;font-style:italic;"> </font><font style="font-family:inherit;font-size:12pt;">that:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(i) the organizational documents of the RE Subsidiaries provide that:</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">Bankruptcy filing is permissible only with the unanimous consent of the directors of SRC O.P. Corporation, including the consent of the independent director (as defined in such organizational documents) thereof; and</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">At least one director of SRC O.P. Corporation shall be an individual who is fully independent of the Company; and</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">Depositor and RE Subsidiaries have been and shall continue to be operated as special purpose entities consistent with the special purpose vehicle provisions of such organizational documents (including, without limitation, provisions intended to ensure and preserve the bankruptcy-remoteness of such entities) and the prior opinions provided by REMIC counsel. REMIC counsel shall provide a bring-down opinion, in substantially the form attached hereto as </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 4</font><font style="font-family:inherit;font-size:12pt;">, that the execution, delivery and performance of the definitive documentation and the consummation of the transactions contemplated thereunder do not cause REMIC counsel to alter or withdraw the bankruptcy opinion issued in connection with the REMIC transaction (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">RE Bring-Down Opinion</font><font style="font-family:inherit;font-size:12pt;">” and, together with the IP Bring-Down Opinion (defined below), the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Bring-Down Opinions</font><font style="font-family:inherit;font-size:12pt;">”). Sears shall cooperate with REMIC counsel in providing such</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">5</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">      authorizations, confirmations, certifications and other informational diligence requests as REMIC counsel shall reasonably require in order to prepare and issue the Bring-Down Opinion.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(ii) the organizational documents of the Depositor provide the same protection as set forth above pertaining to SRC O.P. Corporation with an independent director for the Depositor.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Upon the date of the Closing, concurrently with the receipt of the regular interest REMIC Certificates by the Depositor, the Company will cause the following to occur:</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">Sections 6, 9(j) and 9(t) of the Certificate of Incorporation of SRC O.P. Corporation and Section 9(j) and 9(t) of the Certificate of Incorporation of the Depositor will be amended to permit the continuing existence of PBGC UBL Claims (as defined below); Section 7 of the Certificate of Incorporation for SRC O.P. Corporation will be amended to add to the references to “the Initial Lender” a reference to PBGC and add to the references to “the Loan” a reference to PBGC’s forbearance described below and the period thereof; any comparable provisions of Section 7 of the Certificate of Incorporation for the Depositor will be correspondingly amended.</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">The organizational documents of each of SRC O.P. Corporation and the Depositor, will be amended to provide that: (i) the Independent Director of SRC O.P. Corporation (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">SRC O.P. Independent Director</font><font style="font-family:inherit;font-size:12pt;">”) shall be</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;"> </font><font style="font-family:inherit;font-size:12pt;">as set forth on </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 5</font><font style="font-family:inherit;font-size:12pt;">; (ii) the Independent Director of Depositor (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Depositor Independent Director</font><font style="font-family:inherit;font-size:12pt;">” and, together with the SRC O.P. Independent Director, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Independent Directors</font><font style="font-family:inherit;font-size:12pt;">”) shall be as set forth on </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 5</font><font style="font-family:inherit;font-size:12pt;">; (iii) any subsequent amendment to the organizational documents of SRC O.P. or the Depositor, in each case that is materially adverse to the interests of PBGC (it being understood that any amendment to the sections of those organizational documents to be mutually agreed by PBGC and the Company as part of the definitive documentation, or any addition of new sections or amendments (including deletions) which may, in the reasonable judgment of the SRC O.P. Independent Director or the Depositor Independent Director (as applicable), impair the bankruptcy-remoteness of SRC O.P. Corporation or Depositor in any material respect, shall be deemed to be materially adverse to the interests of PBGC),</font><font style="font-family:inherit;font-size:12pt;"><sup style="vertical-align:top;line-height:120%;font-size:8pt">2</sup></font><font style="font-family:inherit;font-size:12pt;"> will require</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">                                                         </font></div><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">2</sup></font><font style="font-family:inherit;font-size:10pt;"> As part of definitive documentation, PBGC and the Company to agree on particular sections of specified organizational documents that cannot be amended without consent of PBGC notwithstanding the overall standard of</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">6</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">      the prior, written approval of the SRC O.P. Independent Director or the Depositor Independent Director (as applicable); and (iv) any existing Independent Director may be removed, and any successor Independent Director may be appointed, solely to the extent that the existing Independent Director is promptly replaced by a successor Independent Director set forth on </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 5</font><font style="font-family:inherit;font-size:12pt;"> hereto or otherwise expressly approved in writing by PBGC; </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;"> that any Independent Director shall be entitled to vote solely on: (A) the commencement of a Voluntary Bankruptcy Event or a Transfer, Pledge or Distribution (each as defined below) of all or substantially all of the assets of the entity as to which such person is an Independent Director; (B) any amendment to the organizational documents of the entity as to which such person is an Independent Director; or (C) any action which, in the Independent Director’s reasonable judgment (x) may impair the special purpose nature or the bankruptcy-remoteness of any of the Depositor or the RE Subsidiaries (as applicable) in any material respect or (y) would otherwise be in violation of any provisions set forth in this term sheet or the definitive documentation.</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">The organizational documents of the Depositor and the other RE Subsidiaries will be amended to take into account the transactions contemplated herein and afford PBGC similar protections to those set forth above.</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">All Independent Directors contemplated herein shall (i) receive coverage from the applicable Directors’ and Officers’ liability policies of insurance and (ii) shall be paid and receive all other benefits at the same level and amount as the other directors of such entity, and at the sole expense of entity for whom such Independent Director serves. The details of the current director insurance and compensation packages are as set forth at </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 5</font><font style="font-family:inherit;font-size:12pt;">.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">RE Subsidiary Negative Covenants</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Neither the RE Subsidiaries nor the Depositor may: (i) incur any indebtedness and/or guarantees thereof; (ii) sell, transfer or otherwise dispose of (“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Transfer</font><font style="font-family:inherit;font-size:12pt;">”) any of the Designated Assets (as defined below), (iii) fund any dividend, equity repurchase, intercompany loan or capital contribution (“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Distribute</font><font style="font-family:inherit;font-size:12pt;">”) with the Designated Assets, (iv) pledge, hypothecate, or grant a lien, security interest or other financial encumbrance (or permit to exist any such liens, security interests or financial encumbrances) in</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">                                                          </font></div><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">adversity; it being further understood that any amendment to the organizational documents that may impair the special purpose nature or bankruptcy-remoteness of the RE Subsidiaries or the Depositor shall be considered materially adverse to PBGC.</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">7</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Pledge</font><font style="font-family:inherit;font-size:12pt;">”) any of the Designated Assets (as defined below); (v) amend in any manner materially adverse to the interests of PBGC (A) the organizational documents of the Depositor or RE Subsidiaries or (B) the REMIC Transactional Documents (it being understood that a reasonable extension of the expiry of the Master Lease (including any renewal of the Master Lease in accordance with its terms) shall not be materially adverse to the interests of PBGC) (this </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">clause (v)</font><font style="font-family:inherit;font-size:12pt;">, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">REMIC Amendment Covenant</font><font style="font-family:inherit;font-size:12pt;">”); (vi) institute, or consent to the institution of (including, without limitation, by failing to timely defend against), bankruptcy or insolvency proceedings in respect to the Depositor or the RE Subsidiaries, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, or seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Depositor or RE Subsidiaries or any substantial part of its or their assets, or make any assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any corporate action in furtherance of any such action; (vii) (A) merge, dissolve, liquidate or consolidate with or into any other entity or engage in any other business combination with any other entity or (B) form any subsidiaries; or (viii) take any action in violation of the organizational documents of the Depositor or any RE Subsidiary, as applicable.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">As used throughout, the phrase “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">ordinary course of business</font><font style="font-family:inherit;font-size:12pt;">” shall mean the usual transactions, customs and practices of the Company or its relevant subsidiary, as applicable, of a kind, amount, and nature as common before the date of the Closing. </font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Notwithstanding the above restrictions (except as noted below), the RE Subsidiaries and the Depositor may:</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-style:italic;font-weight:bold;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">So long as a Springing Lien Event (as defined below) has not occurred, upon 30 days advance written notice to PBGC, remove up to 10 properties in aggregate from the RE Subsidiaries; </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;">, </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">however</font><font style="font-family:inherit;font-size:12pt;">, that the aggregate value (determined solely by reference to appraisals effective as of the date of the Closing provided by Sears at its sole expense) of all properties so removed pursuant to this basket may not exceed $75 million; </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;"> </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">further</font><font style="font-family:inherit;font-size:12pt;"> that, during the remainder of the calendar year in which the Closing occurs and the immediately following calendar year, the RE Subsidiaries may not remove more than 5 properties per calendar year (or portion thereof) and the aggregate value (determined solely by reference to appraisals effective as of the date of the Closing) of all properties removed during either of such calendar years</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">8</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">     (or portion thereof) may not exceed $25 million; </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;"> </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">further</font><font style="font-family:inherit;font-size:12pt;"> that, during each subsequent calendar year, the RE Subsidiaries may not remove more than 5 properties per calendar year and the aggregate value (determined solely by reference to appraisals effective as of the date of the Closing) of all properties removed during any such calendar year may not exceed $35 million (together, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">RE Subsidiaries Permitted Transfers</font><font style="font-family:inherit;font-size:12pt;">”); </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;"> that, notwithstanding anything herein to the contrary, no sales by the RE Subsidiaries or Depositor of real properties that are Designated Assets (as distinguished from, and not including, movement of parts, subleases, substitutions of real properties, outlots, Pledges or other transactions) may occur unless such sales are either (i) RE Subsidiaries Permitted Transfers, or (ii) expressly permitted in the third bullet point of this section at subsections 2.(v) or 2.(z);</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">Permit (i) the RE Subsidiaries to remain parties to (and the properties held by the RE Subsidiaries to remain subject to) the Master Lease and (ii) the RE Subsidiaries and the Depositor to remain parties to (and the properties held by such entities to remain subject to) the other REMIC Transactional Documents; for the avoidance of doubt, in the event that any action or matter is expressly prohibited (or limited) in the definitive documentation, but may otherwise be permitted (or otherwise less restricted) under the REMIC Transactional Documents, the definitive documentation will control;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">So long as a Springing Lien Event has not occurred, in the case of the RE Subsidiaries: (1) take any action required by the Master Lease, (2) undertake or permit (t) movement of parts between properties, making of improvements to properties, and installation of trade fixtures in accordance with Section 9 of the Master Lease, (u) subleases of properties subject to the Master Lease in accordance with Section 13(a) of the Master Lease, (v) terminations of the Master Lease with respect to specific properties in accordance with Section 14(a) of the Master Lease; provided that the aggregate value of properties sold pursuant to this clause (v), together with the aggregate value of properties sold pursuant to clause (z) below, shall not exceed $25 million in any calendar year (provided that any unused portion thereof with respect to any calendar year may be carried forward to any subsequent calendar year), (w) substitutions of properties subject to the Master Lease in accordance with Sections 11(a) and/or 14(d) of the Master Lease, (x) transactions involving outlots</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">9</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">     pursuant to Section 14(e) of the Master Lease, (y) transactions involving easements pursuant to Section 14(f) of the Master Lease, and (z) sales of properties pursuant to Section 16 of the Master Lease; provided that the aggregate value of properties sold pursuant to this clause (z), together with the aggregate value of properties sold pursuant to clause (v) above, shall not exceed $25 million in any calendar year (provided that any unused portion thereof with respect to any calendar year may be carried forward to any subsequent calendar year); provided further that any substitution of any real property owned by any RE Subsidiary pursuant to this clause (2) (or otherwise, if any) shall be permitted only to the extent such real property is substituted for other real properties of equal or greater value (determined solely by reference to appraisals effective on or about the date of each such substitution) which become collateral for Mortgage Loans which back the REMIC Certificates, at the Company’s sole cost, and (3) except as expressly limited in the definitive documentation, permit Sears, Roebuck and Co. to exercise any of its other rights under the Master Lease;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">(i) Pay third-party servicer and trustee fees in relation to the REMIC Certificates, and (ii) pay principal and interest on the REMIC Certificates in accordance with the Pooling and Servicing Agreement;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">So long as a Springing Lien Event has not occurred, Transfer or Distribute cash or cash equivalents (but not real property constituting Designated Assets) to the Company or any of its subsidiaries but only in a manner generally consistent with the regular cash flow circulation processes employed by Sears in the ordinary course of business; and</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">(1) Incur (A) ordinary course or involuntary liens and encumbrances (including, without limitation (i) liens securing real estate taxes, which shall be timely extinguished in the ordinary course of business, (ii) zoning restrictions, and (iii) easements), (B) liens arising under the REMIC Transactional Documents and (C) liens and encumbrances permitted by the REMIC Transactional Documents and (2) permit to exist any liens and encumbrances existing at the date of the Closing (“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">REMIC Existing Liens</font><font style="font-family:inherit;font-size:12pt;">”). In the event that the Company, the Depositor or any of the RE Subsidiaries (or any of the Company’s other subsidiaries) is required to (or otherwise) deliver(s) a schedule of liens and encumbrances pertaining to any property owned by the</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">10</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;text-align:left;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">    Depositor or any of the RE Subsidiaries to any third party, it shall deliver such schedule (including updates) to PBGC promptly following delivery to the applicable third party.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">RE Subsidiary Additional Covenants</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Sears shall not cause or allow, and there shall not be, (i) any direct or indirect Transfer or Distribution or (ii) any Pledge, in each case of the equity or other ownership interests of any RE Subsidiary or the Depositor to any person other than the Company or any of its subsidiaries; provided that Sears shall not cause or allow, and there shall not be, any Transfer, Distribution or Pledge of the equity or other ownership interests of any RE Subsidiary or the Depositor unless (x) such interests are (or will be) owned by the Company or a subsidiary of the Company organized under the laws of (and domiciled in) the United States of America, any state thereof or the District of Columbia and (y) upon giving effect to such Transfer, Distribution or Pledge, the RE Subsidiaries and the Depositor will remain members of the Company’s “controlled group” as defined in ERISA Section 4001(a)(14). The RE Subsidiaries and the Depositor shall at all times remain liable for their respective obligations to PBGC irrespective of whether any direct or indirect Transfer, Pledge or Distribution of the equity or other ownership interests in any RE Subsidiary or the Depositor occurs.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">IP Subsidiary Organizational Changes and Bankruptcy Remoteness</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Company shall represent, warrant and covenant</font><font style="font-family:inherit;font-size:12pt;font-style:italic;"> </font><font style="font-family:inherit;font-size:12pt;">that the organizational documents of the IP Subsidiary provide that:</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">Bankruptcy filing is permissible only with the unanimous consent of the managers of IP Subsidiary; and</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">At least one manager of IP Subsidiary shall be an individual who is fully independent of the Company; and</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">The IP Subsidiary has been and shall continue to be operated as a special purpose entity consistent with the special purpose vehicle provisions of such organizational documents (including, without limitation, provisions intended to ensure and preserve the bankruptcy-remoteness of such entity) and the prior opinions provided by IP Subsidiary counsel. IP Subsidiary counsel shall provide a bring-down opinion, in substantially the form attached hereto as </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 4</font><font style="font-family:inherit;font-size:12pt;">, that the execution, delivery and performance of the definitive documentation and the consummation of the transactions contemplated thereunder do not cause IP Subsidiary counsel to alter or withdraw the bankruptcy opinion issued in connection with the IP Notes transaction (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Bring-Down Opinion</font><font style="font-family:inherit;font-size:12pt;">”). Sears shall cooperate with IP Subsidiary counsel in providing such authorizations, confirmations,</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">11</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:48px;text-indent:-24px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">      certifications and other informational diligence requests as IP Subsidiary counsel shall reasonably require in order to prepare and issue the IP Bring-Down Opinion.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Upon the date of the Closing: (i) Sears Brands, LLC, the sole member of the IP Subsidiary (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Member</font><font style="font-family:inherit;font-size:12pt;">”), shall appoint</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;"> </font><font style="font-family:inherit;font-size:12pt;">that entity as identified on </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 5</font><font style="font-family:inherit;font-size:12pt;"> as a manager of the IP Subsidiary in accordance with the terms of the IP Subsidiary’s existing organizational documents (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Independent Manager</font><font style="font-family:inherit;font-size:12pt;">”); (ii) the Board of Managers shall cause an Issuer Order (as defined in the IP Notes Indenture) to be given to the Trustee (as defined in the IP Notes Indenture), instructing the Trustee to refrain from consenting to or entering into any subsequent amendments to the IP Notes Indenture without the IP Independent Manager’s prior, express written consent (unless refraining from such amendments would materially impair the value of the IP Notes) and further stating that such Issuer Order may not be revoked by any subsequent Issuer Order unless such subsequent Issuer Order is signed by the Independent Manager (it being understood that the IP Notes Indenture does not, in every instance, obligate the Trustee to adhere to the terms of any Issuer Order); and (iii) each of the Company and the Member shall individually covenant and a gree that it will not seek to remove the existing IP Independent Manager or appoint any successor IP Independent Manager unless the existing Independent IP Independent Manager is promptly replaced by a successor IP Independent Manager set forth on </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 5</font><font style="font-family:inherit;font-size:12pt;"> hereto or otherwise expressly approved in writing by PBGC; </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;"> that any IP Independent Manager shall agree with the Company to vote solely on: (A) the commencement of a Voluntary Bankruptcy Event or a Transfer, Pledge or Distribution of all or substantially all of the assets of the IP Subsidiary; (B) any amendment to the organizational documents of the IP Subsidiary; or (C) any action which, in the Independent Manager’s reasonable judgment: (x) may impair the bankruptcy-remoteness of the IP Subsidiary in any material respect; or (y) would otherwise be in violation of any provisions set forth in this term sheet or the definitive documentation.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">All Independent Managers contemplated herein shall: (i) receive coverage from the applicable Directors’ and Officers’ liability policies of insurance; and (ii) shall be paid and receive all other benefits at the same level and amount as the other managers of such entity, and at the sole expense of the IP Subsidiary. The details of the current manager insurance and compensation packages are as set forth at </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 5</font><font style="font-family:inherit;font-size:12pt;">.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">IP Subsidiary Negative Covenants</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Company shall not permit the IP Subsidiary to, and (as an independent covenant and solely to the extent that such agreement by the IP Subsidiary does not impair the rights of the</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">12</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">holder of the IP Notes thereunder or materially impair the marketability of the IP Notes) the IP Subsidiary shall not:</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">Transfer or Distribute any Designated Assets; </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;"> that the IP Subsidiary shall be permitted to: (i) make payments in respect of the IP Notes or as required by the IP Notes Indenture; (ii) Transfer or Distribute the IP Assets to the extent that such Transfer or Distribution (1) is permitted by the IP Notes Indenture and is otherwise undertaken for fair market value and in the ordinary course of business, or (2) is a Transfer or Distribution following the occurrence of a default under the IP Notes Indenture, with the net proceeds thereof being first applied to the IP Notes and after payment in full of such IP Notes and the other obligations under the IP Notes Indenture, such remaining proceeds (being Designated Assets) subject to the Springing Lien and thereafter to be applied to the PBGC UBL Claims (defined below) (or, in the event that the PBGC UBL Claims are then contingent, unliquidated and/or unmatured, transferred within 5 business days to and held by PBGC or its designated agent for the benefit of PBGC in express trust or escrow (as applicable) until such time as the PBGC UBL Claims are fully liquidated and after application, such amount (if any) in excess of that required to pay the PBGC UBL Claims in full (provided such PBGC UBL Claims have not become unenforceable by reason of a lapse of time) shall be remitted to the Company or its appropriate subsidiary as directed by the Company); and (iii) so long as a Springing Lien Event has not occurred, Transfer or Distribute cash or cash equivalents (even if constituting Designated Assets of the IP Subsidiary) to the Company or any of its subsidiaries in a manner generally consistent with the regular cash flow circulation processes employed by Sears in the ordinary course of business, including without limitation by (1) maintaining loans (as lender) from the initial proceeds from the issuance of the IP Notes, (2) making loans (as lender) to any affiliate out of payments from the licenses constituting IP Assets, (3) canceling, amending, modifying or refinancing any such loans or (4) making distribution of amounts received by the IP Subsidiary under the waterfall provisions of the IP Notes Indenture;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">amend in any manner materially adverse to the interests of PBGC (i) the organizational documents of the IP Subsidiary (it being understood that any amendment to the sections of those organizational documents to be agreed by</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">13</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">     PBGC and the Company as part of the definitive documentation shall be deemed to be materially adverse to the interests of PBGC)</font><font style="font-family:inherit;font-size:12pt;"><sup style="vertical-align:top;line-height:120%;font-size:8pt">3</sup></font><font style="font-family:inherit;font-size:12pt;"> or (ii) the IP Notes Indenture (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Indenture Amendment Covenant</font><font style="font-family:inherit;font-size:12pt;">”);</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">Pledge any Designated Assets other than (i) liens securing the IP Notes, (ii) liens granted to licensees and qualified sub-licensees under the applicable licenses and sublicenses in the ordinary course of business, (iii) licenses or sublicenses of IP Assets on arms’-length terms and otherwise in the ordinary course of business (provided that long-term licenses or sub-licenses providing only upfront (as opposed to regular and periodic) royalty payments shall not be permitted unless the IP Subsidiary (x) promptly reports such transaction(s) to PBGC, and (y) retains (and does not Distribute, Transfer or, unless otherwise permitted by this paragraph, Pledge (except as required by the IP Notes Indenture)) the proceeds of such upfront royalty payments), (iv) any rights granted pursuant to Section 1.12 of the IP Notes Indenture (to the extent as described in footnote 4), (v) ordinary course or involuntary liens and encumbrances, (vi) liens and other encumbrances existing at the date of Closing (“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Existing Liens</font><font style="font-family:inherit;font-size:12pt;">”); (vii) Permitted Liens (as defined in the IP Notes Indenture) and (viii) continuations or substitutions of the foregoing with substantially equivalent liens or encumbrances. In the event the Company or the IP Subsidiary (or any other subsidiary of the Company) is required to (or otherwise) deliver(s) a schedule of liens and encumbrances pertaining to any property owned by the IP Subsidiary to any third party, it shall deliver such schedule (including updates) to PBGC promptly following delivery to the applicable third-party;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">institute or consent to the institution of (including, without limitation, by failing to timely defend against) bankruptcy or insolvency proceedings in respect to the IP Subsidiary, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to bankruptcy or insolvency, or seek orconsent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the IP Subsidiary or any substantial part of its assets, or make any</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">                                                         </font></div><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">3</sup></font><font style="font-family:inherit;font-size:10pt;"> As part of definitive documentation, PBGC and the Company to agree on particular sections of specified organizational documents that cannot be amended without consent of PBGC notwithstanding the overall standard of adversity; it being further understood that any amendment to the organizational documents that may impair the special purpose vehicle status and bankruptcy-remoteness of the relevant IP Subsidiary shall be considered materially adverse to PBGC.</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">14</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">     assignment for the benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or take any corporate action in furtherance of such action;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">except for (i) the IP Notes, (ii) other liabilities arising under the IP Notes Indenture and the Transaction Documents (as defined in the IP Notes Indenture), each as in effect on the date of the Closing and (iii) liabilities of the IP Subsidiary incurred in the ordinary course of business (and then, only to the extent permitted under the IP Notes Indenture), incur, assume or guaranty any indebtedness;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">make any expenditure (by long-term or operating lease or otherwise) for any capital assets (either realty or personalty);</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">(A) merge, dissolve, liquidate or consolidate with or into any other entity or engage in any other business combination with any other entity or (B) form any subsidiaries; or</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">take any action in violation of the organizational documents of the IP Subsidiary.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Sears shall not cause or allow, and there shall not be, (i) any direct or indirect Transfer or Distribution or (ii) any Pledge, in each case of any equity interests in the IP Subsidiary to any person other than the Company or any of its subsidiaries (other than any liens required under the Company’s existing revolving credit facility)</font><font style="font-family:inherit;font-size:12pt;"><sup style="vertical-align:top;line-height:120%;font-size:8pt">4</sup></font><font style="font-family:inherit;font-size:12pt;">; provided that Sears shall not cause or allow, and there shall not be, any Transfer, Distribution or Pledge of the equity or other ownership interests of the IP Subsidiary (other than pursuant to any liens required under the Company’s existing revolving credit facility) unless (x) such interests are (or will be) owned by the Company or a subsidiary of the Company organized under the laws of (and domiciled in) the United States of America, any state thereof or the District of Columbia and (y) upon giving effect to such Transfer, Distribution or Pledge, the IP Subsidiary will remain a member of the Company’s “controlled group” as defined in ERISA Section 4001(a)(14). The Company, through its corporate ownership structure, shall instruct and direct the Board of Sears RE that Sears Re shall not enter into or agree to any amendment to (or waiver under) the IP Notes Indenture which would reasonably be anticipated to materially adversely impact the interests of PBGC.</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">                                                         </font></div><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">4</sup></font><font style="font-family:inherit;font-size:10pt;"> Definitive documentation shall reflect that the noted parenthetical above and as used throughout this term-sheet refers solely to the rights of the lender(s) under the revolving credit facility to be afforded a limited license of the brand names and marks in the event the lender(s) conduct a liquidation of their inventory-based collateral.</font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">15</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Enforcement</font></div></td><td style="vertical-align:middle;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">In addition to any and all other remedies that the parties to the definitive documentation may have, the parties shall each be entitled to specific performance as a remedy for breach of the covenants set forth in this term sheet and the definitive documentation, and PBGC, the Company and all subsidiaries of the Company shall be deemed to have consented to specific performance in respect of any such violation.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Any transactions or other actions in violation of the covenants set forth in this term sheet and the definitive documentation shall be, </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">ab</font><font style="font-family:inherit;font-size:12pt;"> </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">initio</font><font style="font-family:inherit;font-size:12pt;">, null, void and of no force or effect.</font></div><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">If the Company or any of its subsidiaries takes or attempts to take any action which: (i)(x) is or would be in breach of the definitive documentation, and (y) the Company does not within 10 business days following delivery of notice of such breach by PBGC to the Company either cure such breach or provide written notice to PBGC that it will not take such action, (ii) reduces or, if consummated, would reasonably be expected to reduce the aggregate value of the Designated Assets held by the Depositor, the RE Subsidiaries and the IP Subsidiary that may be realized by PBGC (whether as a result of a prohibited Transfer, Distribution or Pledge of any Designated Asset, reduction in the value of any Designated Asset or impairment of the bankruptcy remoteness or special purpose nature of any of the Depositor, the RE Subsidiaries or the IP Subsidiary, or otherwise) by at least $50 million, and (iii) is enjoined by a permanent injunction (after notice to and an opportunity to be heard by the Company) set forth in a final and non-appealable order of a court of competent jurisdiction (or determined by a final and non-appealable order of such court to constitute a breach of the definitive documentation), then the Company shall within 5 business days of entry of such final and non-appealable order (a “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Final Injunction Order</font><font style="font-family:inherit;font-size:12pt;">”) make a contribution to the Pension Plan (an “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Excess Contribution</font><font style="font-family:inherit;font-size:12pt;">”) in an amount equal to $100 million which shall be in addition to the minimum required contribution determined under 26 U.S.C. § 430 for the plan year for which the Excess Contribution is made.  For the avoidance of doubt, nothing set forth in this paragraph, including, without limitation, the payment of the Excess Contribution, will (1) relieve the Company or any of its subsidiaries from, or otherwise mitigate, its obligation to fully comply with the Final Injunction Order (including, without limitation, any obligation to pay damages to PBGC or the Pension Plan), (2) constitute a waiver by PBGC, or cure of, any breach under the definitive documentation, or (3) in any way impair, waive or abrogate any of PBGC’s remedies under the definitive documentation (including, without limitation, the right to declare a Forbearance Termination Event) or under applicable law, other</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">16</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">than the occurrence of a Springing Lien Event arising from the requirement to make such Excess Contribution.  The Company shall not at any time elect under 26 U.S.C § 430(f)(6)(B) to create or to increase any prefunding balance (as defined in 26 U.S.C § 430(f)(6)) of the Pension Plan by using (a) all or any part of any Excess Contribution, or (b) all or any portion of any excess described in 26 U.S.C. § 430(f)(6)(B) that is directly or indirectly attributable to any Excess Contribution.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">PBGC Commitment</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #00000a;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;"><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Unless after the date of the Closing (i) a Forbearance Termination Event occurs that is continuing at the time of PBGC’s issuance of a notice of determination under ERISA Section 4042(a) that it is instituting proceedings to terminate the Pension Plan, or (ii) the Company or any of its subsidiaries enters into an agreement providing for a Material Transaction, PBGC shall forbear from initiating any involuntary termination of the Pension Plan (except an involuntary termination that is based solely on PBGC’s determination (in accordance with then-applicable legal standards) that the Pension Plan “does not have assets available to pay benefits which are currently due under the terms of the plan” within the meaning of ERISA Section 4042(a) and that PBGC is therefore required to initiate pursuant to ERISA Section 4042(a)).</font></div><div style="padding-bottom:6px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"> <br>A “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Forbearance Termination Event</font><font style="font-family:inherit;font-size:12pt;">” shall mean:</font></div><div style="padding-bottom:16px;padding-left:72px;text-indent:-48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(i)</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">the occurrence of any Springing Lien Event; </font></div><div style="padding-bottom:16px;padding-left:72px;text-indent:-48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(ii)</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">an event of default under any third-party debt issued by the Company or any Material Subsidiary (as defined below) with an aggregate outstanding principal in excess of $350 million, which event of default (x) results in the acceleration of the maturity date of such debt and such debt remains outstanding for a period of 5 days following such acceleration; or (y) arises from non-payment upon the expiry of such debt’s term;</font></div><div style="padding-bottom:16px;padding-left:72px;text-indent:-48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(iii)</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">both (A) the Company’s Market Capitalization (as defined below) is less than $1.0 billion on a fully diluted basis, determined at market close, and (B) either (1) the UBL (as defined below) of the Pension Plan exceeds $625 million; or (2) both (x) the Pension Plan is less than 80% funded on a termination basis and (y) the UBL of the Pension Plan is greater than $250 million; or</font></div><div style="padding-bottom:16px;padding-left:72px;text-indent:-48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(iv)</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">any breach by the Company or any of its subsidiaries of any applicable representation, warranty, covenant, undertaking or agreement set forth herein or in the definitive documentation applicable to such entity, in each case subject to materiality thresholds and grace periods (if any) to be agreed.</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">17</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:6px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">PBGC will provide the Company with the UBL Documentation (as defined below) at the time PBGC makes any determination that a Forbearance Termination Event has occurred under clause (iii), above.</font></div><div style="padding-bottom:6px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">A “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Material Transaction</font><font style="font-family:inherit;font-size:12pt;">” shall mean any:</font></div><div style="padding-bottom:13px;padding-left:60px;text-indent:-36px;font-size:12pt;"><font style="font-family:inherit;font-size:11pt;">(i)</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">(A) so long as the Company’s Market Capitalization is at least $1.5 billion, asset dispositions (other than dispositions of equity interests of subsidiaries, which are addressed in section (ii) below) on terms that are not either (i) fair and reasonable or (ii) the result of an arm’s length transaction; and (B) if the Company’s Market Capitalization is less than $1.5 billion, asset dispositions (other than dispositions of equity interests of subsidiaries which are addressed in section (ii) below) that are not both (i) on terms that are either (x) fair and reasonable or (y) the result of an arm’s length transaction, and (ii) having a total value not in excess of $600 million, as calculated from and after the most recent date on which the Company’s Market Capitalization fell below such threshold and excluding transactions required under agreements entered into prior to such date.</font></div><div style="padding-bottom:13px;padding-left:60px;text-indent:-36px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(ii)    disposition of equity or other ownership interests of any subsidiary (including without limitation by means of a rights offering) with total value in excess of $500 million;</font></div><div style="padding-bottom:13px;padding-left:60px;text-indent:-36px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(iii)    spinoffs, dividends or share repurchases with a total value in excess of $250 million; or </font></div><div style="padding-left:60px;text-indent:-36px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(iv)    new financing to or sale-leaseback by (for the avoidance of doubt, including, without limitation, any sale-leaseback of real estate or REIT transaction) the Company or any of its subsidiaries such that, immediately following such transaction, the amount of outstanding indebtedness of the Company and its subsidiaries (including, without limitation, attributable indebtedness arising from sale-leasebacks and commitments under revolving credit facilities) exceeds the amount of outstanding indebtedness (including, without limitation, attributable indebtedness arising from sale-leasebacks, commitments under revolving credit facilities and letter of credit commitment amounts) on July 1, 2015 by at least $1.0 billion;</font></div><div style="padding-bottom:13px;padding-left:72px;text-indent:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">    </font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">18</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">provided that: (x) a disposition of inventory and/or other assets held for sale in the ordinary course of business of the Company and its subsidiaries shall not constitute a Material Transaction and shall not count against any cap set forth above, (y) the transactions described in the Registration Statement on Form S-11 filed with the Securities and Exchange Commission by Seritage Growth Properties and declared effective on June 9, 2015 and any transactions related thereto (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">REIT Transaction</font><font style="font-family:inherit;font-size:12pt;">”) shall, in each case, not constitute a Material Transaction and shall not count against any cap set forth above; </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">provided</font><font style="font-family:inherit;font-size:12pt;"> </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">however</font><font style="font-family:inherit;font-size:12pt;"> that no proceeds thereof may be used to effect a transaction as set forth in section (iii) above, irrespective of any caps set forth therein, and (z) any transaction solely to the extent among the Company and/or any of its subsidiaries shall not constitute a Material Transaction and shall not count against any cap set forth above. Any transaction cap amounts under sections (ii) or (iii) of the definition of a Material Transaction shall be calculated as the sum of all transactions in such section required under agreements entered into during any calendar year, with any unused amounts in any calendar year carried forward into the following calendar year at the Company’s sole discretion; provided that any unused amount with respect to a particular calendar year may not be carried forward to any calendar year other than the immediately following calendar year. Any transaction cap amounts under section (i) of the definition of a Material Transaction shall be calculated as the sum of all transactions in such section entered into during any consecutive 12-month period. For the avoidance of doubt, qualification of a transaction as a “Material Transaction” for the limited purposes of this term sheet and the definitive documentation shall not constitute an admission by the Company or any of its subsidiaries that such transaction is material for any other purpose.</font></div><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="padding-bottom:13px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">As used herein, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Company’s Market Capitalization</font><font style="font-family:inherit;font-size:12pt;">” shall mean and be determined in the following order of priority as of the relevant date of determination:</font></div><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(1) First, so long as ESL Investments, Inc., Fairholme Capital Management, LLC and their respective Affiliates and managed funds, together with the Company’s officers and directors as of the date of determination, (and, if different, those officers and directors within the prior 6 months as well) (collectively, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Specified Shareholders</font><font style="font-family:inherit;font-size:12pt;">”) beneficially own or control, in the aggregate, no more than 88% of the total amount of outstanding fully-diluted shares of the Company’s common stock, the product of (A) the number of fully-diluted shares of the Company’s common stock then outstanding and (B) the closing price of a share of the Company’s common stock as of the end of the most recently ended trading day as reported by the Nasdaq Stock Market or such successor or other securities exchange on which </font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">19</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;border-bottom:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;border-bottom:1px solid #000000;"><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">the Company’s common stock may then be listed. The Company shall provide PBGC the Specified Shareholder common equity ownership totals (to the best of the Company’s knowledge) within 3 business days of receipt of a written request therefor;</font></div><div style="padding-bottom:13px;padding-top:12px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(2) Second, if PBGC or the Company requests a determination of the Company’s Market Capitalization by written notice delivered to the other party and the Specified Shareholders own or control more than 88% of the total amount of outstanding fully-diluted shares of the Company’s common stock, the product of (i) number of fully-diluted shares outstanding, multiplied by (ii) the Average Quoted Price (defined below) at any given time; and</font></div><div style="padding-bottom:13px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(3) Third, if (i) PBGC requests a determination of the Company’s Market Capitalization by written notice delivered to the Company, (ii) the Specified Shareholders own or control more than 88% of the total amount of outstanding fully-diluted shares of the Company’s common stock, and (iii) an Average Quoted Price cannot be promptly calculated (due to a lack of available quotes or otherwise), then the Company’s Market Capitalization shall be deemed (for the purposes of this term sheet and the definitive documentation only) to be less than $1.0 billion on a fully diluted basis unless the Company then has issuer ratings (A) by both (x) S&P of CCC- or higher and (y) Moody’s of Caa3 or higher, in which case the Company’s Market Capitalization shall be deemed (for the purposes of this term sheet and the definitive documentation only) to be greater than $1.0 billion but, except as specified in clause (B) below, less than $1.5 billion or (B) by both (x) S&P of CCC or higher and (y) Moody’s of Caa2 or higher, in which case the Company’s Market Capitalization shall be deemed (for the purposes of this term sheet and the definitive documentation only) to be greater than $1.5 billion, in each case until such time as a subsequent determination of Company’s Market Capitalization is requested by either PBGC or the Company and determined in accordance with the procedures set forth herein; for the avoidance of doubt, in the event that either S&P or Moody’s no longer rates or otherwise withdraws its rating from the Company, then, in the circumstances contemplated by this paragraph (3), the Company’s Market Capitalization shall be deemed (for purposes of this term sheet and the definitive documentation only) to be less than $1.0 billion on a fully diluted basis.</font></div><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Average Quoted Price</font><font style="font-family:inherit;font-size:12pt;">” shall be determined from time-to-time, promptly following a request by PBGC or the Company, as follows: (x) the Company will solicit and obtain a quoted price per share for a sale of 50,000 shares from each of five</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">20</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:middle;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"> independent broker-dealers reasonably acceptable to each of PBGC and the Company; (y) the highest and lowest price quotes will be eliminated; and (z) the Average Quoted Price will be the arithmetic average of the remaining three quotes.</font></div><div style="padding-top:12px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">“</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Affiliate</font><font style="font-family:inherit;font-size:12pt;">” means, with respect to a specified person or entity, another person or entity that directly or indirectly Controls or is Controlled by or is under common Control with the person or entity specified. “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Control</font><font style="font-family:inherit;font-size:12pt;">” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a person or entity, whether through the ability to exercise voting power, by contract or otherwise.</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Springing Lien</font></div></td><td style="vertical-align:middle;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">1.</font><font style="font-family:inherit;font-size:10pt;">     </font><font style="font-family:inherit;font-size:12pt;">Upon and continuing after the occurrence of any Springing Lien Event, the Depositor, the RE Subsidiaries and the IP Subsidiary will each automatically be deemed to have granted (as of the date the applicable Springing Lien Event occurs), without further action of any party, a lien on and security interest in (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Springing Lien</font><font style="font-family:inherit;font-size:12pt;">”): (i) the REMIC Certificates held by the Depositor; (ii) the real property held by the RE Subsidiaries; (iii) the IP Assets held by the IP Subsidiary; and (iv) all proceeds of any of the foregoing (including, without limitation, proceeds of proceeds) set forth in clauses (i) through (iii) (all assets set forth in clauses (i) through (iv), regardless of whether a Springing Lien Event has occurred, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Designated Assets</font><font style="font-family:inherit;font-size:12pt;">”) to PBGC securing any and all claims (whether fixed, contingent or otherwise) of PBGC for the “unfunded benefit liabilities” together with interest (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">UBL</font><font style="font-family:inherit;font-size:12pt;">”)</font><font style="font-family:inherit;font-size:12pt;"><sup style="vertical-align:top;line-height:120%;font-size:8pt">5</sup></font><font style="font-family:inherit;font-size:12pt;"> of the Pension Plan under ERISA Section 4062(b)(1)(A) (provided that, notwithstanding anything in this term sheet or the definitive documentation, the parties reserve all</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">                                                         </font></div><div style="line-height:120%;padding-top:8px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">5</sup></font><font style="font-family:inherit;font-size:10pt;"> PBGC shall provide the Company with its supporting documentation relating to its determination of, estimate of, or other calculations relating to the UBL of the Pension Plan (including, but not limited to, its Pension Information Profile relating thereto in Excel format) (the "</font><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">UBL Documentation</font><font style="font-family:inherit;font-size:10pt;">"), at the times provided in this term sheet or in the the definitive documentation; provided, however, that neither PBGC's provision of the UBL Documentation to the Company nor the Company's review thereof or response thereto will prevent or delay PGBC from pursuing any and all remedies hereunder or under the definitive documentation in accordance with the terms hereof or thereof. The Company shall timely provide to PBGC: (i) all quarterly asset statements for the Pension Plan within 5 business days after the Company's receipt thereof; and (ii) the Pension Plan's Actuarial Valuation Report annually within 5 business days after the earlier of (a) the last day of the ninth calendar month of the plan year and (b) the date on which such report is received by the Company.</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">21</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">          rights regarding the determination of UBL, including, but not limited to, the applicability, validity, interpretation, and application of PBGC regulations relating thereto) (such claims, the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">PBGC UBL Claims</font><font style="font-family:inherit;font-size:12pt;">”), against the Company and each of its subsidiaries; provided, however, that if the grant of the Springing Lien respecting the IP Assets (and all proceeds thereof) would constitute a default under the IP Notes Indenture as of the date of the Closing, then the Springing Lien as respecting the IP Assets (and all proceeds thereof) shall be of no force and effect until either (1) the IP Notes and all other obligations under the IP Notes Indenture have been paid in full (or the IP Notes and the IP Notes Indenture have otherwise been defeased or fully discharged) or (2) the grant of the Springing Lien respecting the IP Assets (and all proceeds thereof) ceases to constitute a default under the IP Notes Indenture (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">IP Springing Lien Conditions</font><font style="font-family:inherit;font-size:12pt;">”). In addition, and without any limitation to any other rights or remedies of whatever kind or nature PBGC may have, and notwithstanding anything herein to the contrary, PBGC may foreclose on the Designated Assets (or any portion thereof) under the Springing Lien only: (a) if the plan administrator of the Pension Plan initiates a distress termination of the Pension Plan under ERISA Section 4041(c); or (b) upon satisfaction of the following conditions: (x) the Pension Plan is terminated and (y) PBGC does not receive from the Company within five business days after a written demand by PBGC (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">PBGC Demand Letter</font><font style="font-family:inherit;font-size:12pt;">”) (which PBGC Demand Letter shall include the UBL Documentation) the full amount of the PBGC UBL Claims. PBGC’s reasonable estimate of the PBGC UBL Claims shall suffice for purposes of its demand as set forth above; provided however, that if the PBGC UBL Claims are then contingent, unliquidated and/or unmatured, then any proceeds from such foreclosure action shall (1) be held by PBGC or its designated agent for the benefit of PBGC in express trust or escrow (as applicable); and (2) if invested, then invested as PBGC shall reasonably determine, until such time as the PBGC UBL Claims are fully liquidated and after application, such amount (if any) in excess of that required to pay the PBGC UBL Claims in full (provided such PBGC UBL Claims have not become unenforceable by reason of a lapse of time) shall be remitted to Sears; provided further that if the amount of the PBGC UBL Claims is ultimately determined to be less than PBGC’s reasonable estimate as set forth above, any amounts paid in respect of the PBGC UBL Claims that are in excess of the</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">22</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">          ultimately determined amount thereof shall be promptly returned to the Company, including, to the extent permitted by applicable law, unapplied interest and earnings (in either case, if any) as earned on the trust or escrow account. The Springing Lien shall remain in existence until the PBGC UBL Claims (x) are paid in full, or (y) become unenforceable by reason of lapse of time.</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2.</font><font style="font-family:inherit;font-size:10pt;">         </font><font style="font-family:inherit;font-size:12pt;">In addition, following the occurrence of a Springing Lien Event and determined only at such time, the Springing Lien shall (i) with respect to the lien on the Designated Assets consisting of the REMIC Certificates (and all proceeds thereof), be (a) a valid, binding and enforceable lien on and security interest in such REMIC Certificates (and all proceeds thereof) senior to all other liens except for non-consensual liens which may prime by operation of statute (if any) and (b) perfected (x) through physical possession of such REMIC Certificates to be held in escrow (in accordance with escrow arrangements reasonably acceptable to PBGC) until the occurrence of a Springing Lien Event by PBGC’s designated agent, which shall be a money-center financial institution reasonably acceptable to PBGC and the Company (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Custodian</font><font style="font-family:inherit;font-size:12pt;">”), such REMIC Certificates to be delivered by the Depositor to the Custodian at the date of Closing, and (y) by such other pre-executed documents of perfection and powers of attorney in form and substance reasonably acceptable to PBGC, delivered to the Custodian to be held in escrow (in accordance with escrow arrangements reasonably acceptable to PBGC) until the occurrence of a Springing Lien Event at the date of Closing for filing and recordation upon the occurrence of a Springing Lien Event; (ii) with respect to the lien on the Designated Assets consisting of the IP Assets (and all proceeds thereof), be (a) subject to and conditioned upon the satisfaction of at least one of the IP Springing Lien Conditions, a valid, binding and enforceable lien on and security interest in such IP assets (and all proceeds thereof) senior to all other liens except for the liens securing the IP Notes and non-consensual liens which may prime by operation of statute (if any) (and such rights as described </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">supra</font><font style="font-family:inherit;font-size:12pt;"> at footnote 4) and (b) perfectible by pre-executed documents of perfection and powers of attorney in form and substance reasonably acceptable to PBGC, delivered to the Custodian to be held in escrow (in accordance with escrow arrangements reasonably acceptable to PBGC) until the occurrence of a Springing Lien Event at the date of the Closing for filing and recordation upon the occurrence of a Springing Lien Event;</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">23</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">          and (iii) with respect to the lien on the Designated Assets consisting of the real property (and all proceeds thereof), be (a) a valid, binding and enforceable lien on and security interest in such real property (and all proceeds thereof) senior to all other liens except for the mortgages and non-consensual liens which may prime by operation of statute (if any) and (b) perfectible by (I) other than mortgages (addressed in sub-paragraph (II) below), pre-executed documents of perfection and powers of attorney in form and substance reasonably acceptable to PBGC, delivered to the Custodian to be held in escrow (in accordance with escrow arrangements reasonably acceptable to PBGC) until the occurrence of a Springing Lien Event at the date of Closing for filing and recordation upon the occurrence of a Springing Lien Event and (II) mortgages, which shall be substantially in the form of the form of mortgage attached hereto as </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 6</font><font style="font-family:inherit;font-size:12pt;"> (together with any state-specific conformations required as of the time of the applicable Springing Lien Event), to be recorded promptly following the occurrence of a Springing Lien Event; provided that the Company shall: (i) cause to be provided at Closing pre-executed signature pages of the applicable subsidiary of the Company with respect to such mortgages; and (ii) appoint PBGC as its attorney-in-fact (pursuant to a power of attorney in a form reasonably acceptable to PBGC, which shall be updated at the reasonable request of PBGC to reflect any changes required by law) to execute, make state-specific conformations, and record such mortgages on the real properties held by the RE Subsidiaries; provided, however, that PBGC may act in reliance upon such power of attorney only following the occurrence of a Springing Lien Event. Upon the occurrence of a Springing Lien Event, PBGC may remove any of the foregoing pre-executed documents from escrow, file such pre-executed documents with applicable government entities, file applicable UCC-1 financing statements, negotiate, execute and record mortgages, and take such other actions, in each case to the extent reasonably necessary to perfect the applicable Springing Lien and, to the extent in accordance with applicable law and not otherwise prohibited by the definitive documentation, foreclose on the Designated Assets. </font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">3.</font><font style="font-family:inherit;font-size:10pt;">         </font><font style="font-family:inherit;font-size:12pt;">Each of the Depositor, the RE Subsidiaries, the IP Subsidiary and their respective direct parents, as well as the Company, shall enter into a subordination agreement with PBGC agreeing on the date of the Closing that solely after the occurrence of a Springing Lien Event, (i) any and all</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">24</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">          claims such entity may then or thereafter hold against the Company or any of its subsidiaries will be subordinated in right of payment to the PBGC UBL Claims against the Company or such subsidiary, as applicable, (ii) except as pertaining to amounts owed in connection with REMIC Transaction Documents and/or the IP Notes, any and all monetary obligations of Depositor, the RE subsidiaries and the IP Subsidiary then owed to the Company or any of its subsidiaries will be subordinated in right of payment to the PBGC claims against the Company or such subsidiary as applicable and (iii) that any funds received contrary to such subordination shall be held expressly in trust and turned over to PBGC for application to the PBGC UBL Claims.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">For the avoidance of doubt, the Springing Lien shall consensually secure the PBGC UBL Claims in total (without regard to any rights of the Company or any of its subsidiaries to seek marshalling or similar remedies, which shall be deemed waived). Each of (i) the Company and (ii) the RE Subsidiaries, Depositor and the IP Subsidiary, hereby acknowledge and shall in the definitive documentation further acknowledge its joint and several contingent liability for the PBGC UBL Claims.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The Springing Lien shall not be subject to the collective net worth limit applicable to a statutory lien under ERISA Section 4068 (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">ERISA Lien</font><font style="font-family:inherit;font-size:12pt;">”). Rather, the Springing Lien shall secure the PBGC UBL Claims on a joint and several basis against each of the RE Subsidiaries, the Depositor, and the IP Subsidiary. Each of the RE Subsidiaries, the Depositor, and the IP Subsidiary shall waive any and all defenses based on marshalling, suretyship or impairment of collateral.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Nothing herein in any way limits PBGC's rights, if any, to an ERISA Lien. However, any amount PBGC collects pursuant to an ERISA Lien from any of the RE Subsidiaries, the Depositor or the IP Subsidiary shall serve to reduce the amount owed by the RE Subsidiaries and the Depositor or the IP Subsidiary, as applicable, for the PBGC UBL Claims that would otherwise be secured by the Springing Lien, provided that no amounts collected hereunder from the Company or any of its subsidiaries will reduce any PBGC claim against any other of the Company and its subsidiaries until PBGC has received a single satisfaction of such claim. Except as otherwise expressly agreed to herein or in the definitive documentation, nothing herein will limit PBGC’s or the Pension Plan’s rights and remedies, whether by statute, contract, at law, in equity or otherwise.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">As set forth in footnote 4 hereof, the Springing Lien shall not extend to such rights with respect to the IP Assets as are reasonably necessary to permit the collateral agents under the</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">25</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Company’s existing credit facility to enforce their rights and remedies under the documents governing such facility with respect to the collateral securing such facility.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">At Closing, the Company shall deposit with the Custodian the sum of $250,000 to cover all out-of-pocket costs and expenses of PBGC to be incurred in connection with the execution, perfection and recordation of any mortgages and other security interests related to the Springing Lien. Any unused portion of such escrowed funds shall be returned by the Custodian to the Company promptly following the termination of the parties’ agreement under the definitive documentation. For the avoidance of doubt, these escrowed funds shall not be released by the Custodian to PBGC until a Springing Lien Event occurs.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Springing Lien Events</font></div></td><td style="vertical-align:middle;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:16px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Each of the following shall constitute a “Springing Lien Event” hereunder:</font></div><div style="padding-bottom:16px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">1.</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">A “Voluntary Bankruptcy Event” or an “Involuntary Bankruptcy Event” (each as defined below).</font></div><div style="padding-bottom:16px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2.</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">Failure by the Company (or any of its subsidiaries) to timely make any quarterly or other required Pension Plan contributions (including, without limitation, any Excess Contribution).</font></div><div style="padding-bottom:16px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">3.</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">Entry into an agreement providing for (i) direct or indirect Distribution or Transfer or (ii) Pledge, in each case of any ownership interest in the Depositor, any RE Subsidiary or the IP Subsidiary by the Company or any of its subsidiaries to any entity other than the Company or any of its subsidiaries (other than pursuant to any liens required under the Company’s existing revolving credit facility, as described in footnote 4) without the Depositor, such RE Subsidiary or the IP Subsidiary, as applicable, remaining liable for its obligations to PBGC.</font></div><div style="padding-bottom:16px;padding-left:41px;text-indent:-42px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">4.</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">(i) The initiation by the plan administrator of the Pension Plan of a distress termination of the Pension Plan under ERISA Section 4041(c), (ii) entry by a court of competent jurisdiction of a decree under ERISA §4042(c)(1) adjudicating that the Pension Plan is terminated or (iii) agreement between PBGC and the plan administrator of the Pension Plan that the Pension Plan is terminated.</font></div><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">For the purposes hereof: (i) a “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Voluntary Bankruptcy Event</font><font style="font-family:inherit;font-size:12pt;">” shall mean voluntary commencement (or consent to, including, without limitation, by failure to timely defend against, either involuntary commencement or entry of an order for relief in an involuntary </font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">26</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">case) of a bankruptcy case or similar proceeding (including, without limitation, appointment of a receiver or other custodian or general assignment for the benefit of creditors) with respect to the Company or any of its Material Subsidiaries; (ii) an “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Involuntary Bankruptcy Event</font><font style="font-family:inherit;font-size:12pt;">” shall mean commencement of an involuntary bankruptcy case or similar proceeding (including without limitation appointment of a receiver or other custodian or required winding up or liquidation) with respect to the Company or any of its Material Subsidiaries that is not dismissed or vacated within</font><font style="font-family:inherit;font-size:12pt;font-weight:bold;"> </font><font style="font-family:inherit;font-size:12pt;">60 days after commencement; (iii) a “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Material Subsidiary</font><font style="font-family:inherit;font-size:12pt;">” shall mean any direct or indirect subsidiary of the Company (A) for which the Company’s share (determined on a </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">pro</font><font style="font-family:inherit;font-size:12pt;"> </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">rata</font><font style="font-family:inherit;font-size:12pt;"> basis by reference to the portion of the equity of such subsidiary held directly or indirectly by the Company) of the assets of such subsidiary and its direct and indirect subsidiaries, taken as a consolidated whole, constitutes more than 5% of the assets of the Company and its direct and indirect subsidiaries, taken as a consolidated whole, (B) which is the Depositor, a RE Subsidiary, the IP Subsidiary or Sears Re or (C) which is a direct or indirect parent of the Depositor, a RE Subsidiary, the IP Subsidiary or Sears Re; and (iv) “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Closing</font><font style="font-family:inherit;font-size:12pt;">” or “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Close</font><font style="font-family:inherit;font-size:12pt;">” means the mutual execution and delivery of the definitive documentation and the effectiveness thereof.</font></div><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="padding-bottom:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">With respect to any and all agreements, indentures, appraisals, leases, articles, governance documents, or other documents of any kind or nature that are referred to herein or in the definitive documentation, the Company: (i)(a) shall with respect to any appraisals to be conducted as of the Closing and thereafter in connection with the Designated Assets and the transactions contemplated herein and in the definitive documentation, bear all costs and expenses associated therewith and select such appraiser(s) from the list of approved appraisers set forth on </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 7</font><font style="font-family:inherit;font-size:12pt;"> (as the parties may reasonably agree to amend), (b) shall provide to PBGC the most current version of such documents then in effect at least 3 weeks before the date of the Closing, (c) shall (x) identify any changes, waivers or amendments thereto which have been made within the last 12 months, or (y) represent and warrant that no such changes or amendments have been made during the last 12 months, and (d) represents, warrants and covenants that no other changes or amendments have been or will be made until after the Closing, and then only to the extent permitted hereunder or in the definitive documentation; and (ii) shall with respect to references herein to REMIC Existing Liens and IP Existing Liens, the Company shall, as pertaining to the Depositor, the RE Subsidiaries and the IP Subsidiary provide a definitive schedule of all such REMIC Existing Liens and IP</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">27</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Existing Liens that are permitted under the definitive documentation solely as a result of being REMIC Existing Liens or IP Existing Liens, as applicable, and not pursuant to any other carve-out.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Termination of Agreement</font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The parties’ agreements under the definitive documentation shall terminate, the definitive documentation shall be of no further effect and the Springing Lien shall be released upon the earliest of:</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">The Pension Plan’s achieving an 85% funded level on a termination basis as of the last day of two consecutive plan years of the Pension Plan; provided that Company may, at any time, provide to PBGC a calculation of the Pension Plan’s funding percentage on a termination basis with supporting documentation and request PBGC review thereof and, in such event, PBGC will promptly inform the Company in writing that it agrees or disagrees with such calculation and, if it disagrees with such calculation, will simultaneously provide the Company with the UBL Documentation relating to such disagreement and a written explanation of the bases upon which it disagrees;</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">5 years after the earlier of (i) the date of the Closing and (ii) the date that is 60 days after the date of this term sheet; provided that, if PBGC has commenced an enforcement action with respect to its rights hereunder (or the definitive documentation), such agreements shall not terminate solely as a result of the lapse of time until such enforcement action is finally resolved; or</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:46px;text-indent:-19px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">•</font><font style="font-family:inherit;font-size:10pt;">    </font><font style="font-family:inherit;font-size:12pt;">The Company completes a standard termination of the Pension Plan. Any such standard termination will be deemed completed for purposes of the definitive documentation upon the expiration of the Audit Period. “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Audit Period</font><font style="font-family:inherit;font-size:12pt;">” means the period beginning on the date on which PBGC receives a Form 501 Post-Distribution Certification for the Pension Plan indicating that the Pension Plan has terminated in a standard termination under ERISA § 4041(b) and ending on the later of (a) the 180th day after such receipt, and (b) if PBGC has, by such 180th day, issued audit findings or a notice of noncompliance with respect to such standard termination, the date on which such audit findings have been complied with or rescinded or on which such notice of noncompliance has been rescinded.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Disclosure</font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">The content of any public disclosure or press release relating to the terms set forth herein shall be substantially in the form attached hereto as </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Exhibit 8</font><font style="font-family:inherit;font-size:12pt;">. The timing of any such disclosure or</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">28</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:center;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;margin-left:auto;margin-right:auto;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:bottom;border-bottom:1px solid #00000a;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #00000a;"><div style="overflow:hidden;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:top;border-bottom:1px solid #00000a;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #00000a;"><div style="text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">release shall be mutually agreed prior to the date of the Closing and in advance of such disclosure or release. </font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Representation</font></div></td><td style="vertical-align:top;border-bottom:1px solid #00000a;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #00000a;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">It is contemplated that each of the parties will consult their own counsel regarding the foregoing arrangements and the effects thereof. In furtherance thereof, no legal opinions of either party’s counsel will be required to be provided to the other party other than (1) the Bring-Down Opinions and (2) opinions of local counsel solely as to corporate existence, good standing, power and authority and authorization with respect to the Company and each of its subsidiaries party to the definitive documentation implementing the transactions contemplated herein and in the definitive documentation.</font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #00000a;border-right:1px solid #00000a;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">Binding Term Sheet Provisions</font></div></td><td style="vertical-align:middle;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">It is recognized that despite the Parties’ efforts to effectuate concurrently the Closing and the REIT Transaction closing, the REIT Transaction has already closed. Therefore, by affixing authorized signatures hereto, the Company and PBGC agree (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Binding Term Sheet Provisions</font><font style="font-family:inherit;font-size:12pt;">”) that:</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">1. Each party shall act in good faith to attempt to prepare, finalize and Close definitive documentation on the terms and conditions as contemplated in this term sheet (including, without limitation, finalizing and resolving all bracketed provisions, provisions subject to further review, and Exhibits as noted herein) as soon as reasonably practicable, but in any event, within 60 days of mutual execution hereof (the “</font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">Documentation Period</font><font style="font-family:inherit;font-size:12pt;">”).</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">2. During the Documentation Period: (a) both parties shall not issue any press release or make any other public disclosure relating to the terms set forth herein except (1) as to which the timing and content shall have been mutually agreed by both parties prior to the time of such disclosure or release or (2) as required by applicable law or compulsory legal process or in connection with any pending legal proceeding (in which case each party agrees, to the extent permitted by applicable law, to inform the other party promptly thereof and such other party may reply or otherwise respond as it deems necessary or advisable); (b) the Company shall, as if the definitive documentation were in effect, (i) comply with the covenants set forth in the sections entitled “RE Subsidiary Negative Covenants,” “RE Subsidiary Additional Covenants,” “IP Subsidiary Negative Covenants” and “IP Subsidiary Additional Covenants”, and (ii) refrain from using the proceeds of the REIT Transaction to fund any spinoffs, dividends or share repurchases; and (c) unless after the date of the term sheet either (i) a Forbearance Termination Event occurs that is continuing or (ii) the Company or any of its subsidiaries enters into an agreement providing for a Material Transaction, PBGC shall refrain from issuing a notice of determination under ERISA</font></div></td></tr></table></div></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">29</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:100%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:31%;"></td><td style="width:69%;"></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Section 4042(a) that it is instituting proceedings to terminate the Pension Plan.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">3. Unless extended in writing by both parties, upon the expiry of the Documentation Period, these Binding Term Sheet Provisions shall be of no further force or effect.</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></td></tr><tr><td style="vertical-align:top;border-bottom:1px solid #000000;padding-left:2px;padding-top:8px;padding-bottom:8px;padding-right:2px;border-left:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;">AGREED AS TO THE BINDING TERM SHEET PROVISIONS ONLY</font></div><div style="padding-bottom:8px;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div></td><td style="vertical-align:bottom;border-bottom:1px solid #000000;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;border-left:1px solid #000000;border-right:1px solid #000000;border-top:1px solid #000000;"><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">SEARS HOLDINGS CORPORATION </font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Dated: September 4, 2015</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">By: </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">/s/ Kristin M. Coleman</font><font style="font-family:inherit;font-size:12pt;">        </font><font style="font-family:inherit;font-size:12pt;">    </font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Print: Kristin M. Coleman</font></div><div style="padding-bottom:8px;padding-top:8px;padding-left:36px;text-indent:-36px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Title: Senior Vice President, General Counsel and Corporate Secretary</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"> </font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">    – and –</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">PENSION BENEFIT GUARANTY CORPORATION</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Dated: September 4, 2015</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">By: </font><font style="font-family:inherit;font-size:12pt;text-decoration:underline;">/s/ Sanford Rich</font><font style="font-family:inherit;font-size:12pt;">   </font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Print: Sanford Rich</font></div><div style="padding-bottom:8px;padding-top:8px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Title: Chief of Negotiations and Restructuring, PBGC</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">30</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 1</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(SEARS OWNERSHIP CHART)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[To be provided by Company as soon as practicable as part of</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">definitive documentation process]</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">31</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 2</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Other Company Subsidiaries)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[To be provided by Company as soon as practicable as part of</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">definitive documentation process]</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">32</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 3</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Current Holders of REMIC Certificates)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[To be provided by Company as soon as practicable as part of</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">definitive documentation process]</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">33</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 4</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Bring-Down Opinions)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[To be provided by Company counsel and finalized with PBGC</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">as soon as practicable as part of definitive documentation process]</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">34</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 5</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Independent Director and Independent Manager Lists and</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Schedule of Compensation and Benefits for Current Relevant </font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Company Directors and Managers )</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[(i) Initial and Replacement Independent Director and Manager Lists to be finalized as soon</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">as practicable as part of definitive documentation process; (ii) Schedule of</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">Independent Director and Manager Compensation and Benefits to be</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">provided by Company as soon as practicable as part of definitive documentation process]</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">35</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 6</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Form of Springing Lien Mortgage)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[To be finalized by Company and PBGC as soon as practicable as part of</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">definitive documentation process]</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">36</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 7</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(List of Approved Appraisers)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;text-indent:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[**]</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">[**] Confidential Information has been omitted and filed separately with the Securities and Exchange Commission.</font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Confidential treatment has been requested with respect to this omitted information.</font></div><div style="line-height:120%;text-align:left;padding-left:48px;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">37</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div><hr style="page-break-after:always"><div><br></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;font-weight:bold;text-decoration:underline;">EXHIBIT 8</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">(Form of Press Release)</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">[To be finalized by Company and PBGC as soon as practicable as part of</font></div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">definitive documentation process]</font></div><div><br></div><div><div style="line-height:120%;text-align:center;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;">38</font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:7pt;"><font style="font-family:inherit;font-size:7pt;"><br></font></div></div> </body> </html> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-31.1 <SEQUENCE>3 <FILENAME>shldex311q32015a.htm <DESCRIPTION>SECTION 302 CERTIFICATIONS OF CEO <TEXT> <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <!-- Document created using Wdesk 1 --> <!-- Copyright 2016 Workiva --> <title>Exhibit</title> </head> <body style="font-family:Times New Roman;font-size:10pt;"> <div><a name="s15DF838FBA8CE37946BF089A9D454CC8"></a></div><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">EXHIBIT 31.1</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">CERTIFICATIONS</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">I, Edward S. Lampert, certify that:</font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:95.94017094017094%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:4%;"></td><td style="width:96%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">1.</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">I have reviewed this amendment to the quarterly report on Form 10-Q of Sears Holdings Corporation; and</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2.</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Date: May 26, 2016</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">/s/ Edward S. Lampert       </font><font style="font-family:inherit;font-size:10pt;">  <br>Edward S. Lampert  <br>Chairman of the Board and Chief Executive Officer  <br>Sears Holdings Corporation</font></div><div><br></div><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div> </body> </html> </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-31.2 <SEQUENCE>4 <FILENAME>shldex312q32015a.htm <DESCRIPTION>SECTION 302 CERTIFICATIONS OF CFO <TEXT> <!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <!-- Document created using Wdesk 1 --> <!-- Copyright 2016 Workiva --> <title>Exhibit</title> </head> <body style="font-family:Times New Roman;font-size:10pt;"> <div><a name="s169231529BDEDCBCD7CA089C22A0C2E2"></a></div><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div><div><br></div><div style="line-height:120%;text-align:right;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">EXHIBIT 31.2</font></div><div style="line-height:120%;text-align:left;font-size:12pt;"><font style="font-family:inherit;font-size:12pt;"><br></font></div><div style="line-height:120%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">CERTIFICATIONS</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">I, Robert A. Schriesheim, certify that:</font></div><div style="line-height:120%;font-size:10pt;"><div style="padding-left:0px;text-indent:0px;line-height:normal;padding-top:10px;"><table cellpadding="0" cellspacing="0" style="font-family:Times New Roman;font-size:10pt;width:95.72649572649573%;border-collapse:collapse;text-align:left;"><tr><td colspan="2"></td></tr><tr><td style="width:4%;"></td><td style="width:96%;"></td></tr><tr><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td><td style="vertical-align:bottom;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="overflow:hidden;height:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"> </font></div></td></tr><tr><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">1.</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">I have reviewed this amendment to the quarterly report on Form 10-Q of Sears Holdings Corporation; and</font></div></td></tr><tr><td style="vertical-align:top;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">2.</font></div></td><td style="vertical-align:middle;padding-left:2px;padding-top:2px;padding-bottom:2px;padding-right:2px;"><div style="padding-bottom:2px;text-align:left;padding-left:2px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.</font></div></td></tr></table></div></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Date: May 26, 2016</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;text-decoration:underline;">/s/ Robert A. Schriesheim         </font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Robert A. Schriesheim  <br>Executive Vice President and Chief Financial Officer</font></div><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Sears Holdings Corporation</font></div><div style="line-height:144%;padding-bottom:4px;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div><br></div><div><div style="line-height:144%;text-align:center;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div><div style="line-height:144%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br></font></div></div> </body> </html> </TEXT> </DOCUMENT> </SEC-DOCUMENT>