Page 8 of 15 – SEC Filing
This Amendment No. 57 to Schedule 13D (this Amendment) relates to common shares,
par value $0.01 per share (the Holdings Common Stock), of Sears Holdings Corporation, a Delaware corporation (Holdings). This Amendment amends the Schedule 13D, as previously amended, filed with the Securities and Exchange
Commission by ESL Partners, L.P., a Delaware limited partnership (Partners), SPE I Partners, LP, a Delaware limited partnership (SPE I), SPE Master I, LP, a Delaware limited partnership (SPE Master I), RBS
Partners, L.P., a Delaware limited partnership (RBS), ESL Investments, Inc., a Delaware corporation (ESL), and Edward S. Lampert, a United States citizen, by furnishing the information set forth below. Except as otherwise
specified in this Amendment, all previous Items are unchanged. Capitalized terms used herein which are not defined herein have the meanings given to them in the Schedule 13D, as previously amended, filed with the Securities and Exchange Commission
(SEC).
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended and supplemented as follows:
In grants of shares of Holdings Common Stock by Holdings on August 31, 2017 and September 29, 2017, pursuant to the Extension
Letter between Holdings and Mr. Lampert, Mr. Lampert acquired an additional 101,078 shares of Holdings Common Stock. Mr. Lampert received the shares of Holdings Common Stock as consideration for serving as Chief Executive Officer and
no cash consideration was paid by Mr. Lampert in connection with the receipt of such shares of Holdings Common Stock.
Item 4. Purpose
of Transaction.
Item 4 is hereby amended and supplemented as follows:
On October 4, 2017, Holdings, through Sears, Roebuck and Co., Kmart Stores of Illinois LLC, Kmart of Washington LLC, Kmart
Corporation, SHC Desert Springs, LLC, Innovel Solutions, Inc., Sears Holdings Management Corporation, Maxserv, Inc. and Troy Coolidge No. 13, LLC (collectively, the A&R RE Loan Borrowers), entities wholly-owned and controlled,
directly or indirectly by Holdings, entered into an Amended and Restated Loan Agreement (the A&R RE Loan Agreement), which amended and restated its Loan Agreement, dated as of January 3, 2017 (as amended), with the RE Loan
Lenders, affiliates of the Reporting Persons, which was originally entered into in connection with the Real Estate Loan Facility. Pursuant to the A&R RE Loan Agreement, the A&R RE Loan Borrowers borrowed an additional $100 million (the
Initial Incremental Loan) from the RE Loan Lenders. After giving effect to the Initial Incremental Loan, the aggregate principal amount outstanding under the A&R RE Loan Agreement was $499.4 million. Subject to the satisfaction of
certain conditions, including pledging additional properties or other assets as collateral, up to an additional $100 million may be drawn by Holdings prior to December 1, 2017 (the Additional Incremental Loan; and the Additional
Incremental Loan, if any, together with the Initial Incremental Loan, the Incremental Loans). The Incremental Loans mature on April 3, 2018. The original loans under the A&R RE Loan Agreement continue to mature on July 20,
2020.
The Incremental Loans will have an annual interest rate of 11%, with accrued interest payable monthly. No upfront or funding fees
will be paid in connection with the Incremental Loans. As with the existing loans under the A&R RE Loan Agreement, the Initial Incremental Loan is guaranteed by Holdings and is currently secured by a first priority lien on 61 real properties
owned by the A&R RE Loan Borrowers.
The A&R RE Loan Agreement includes certain representations and warranties, indemnities and
covenants, including with respect to the condition and maintenance of the real property collateral. The A&R RE Loan Agreement has certain events of default, including (subject to certain materiality thresholds and grace periods) payment default,
failure to comply with covenants, material inaccuracy of representation or warranty, and bankruptcy or insolvency proceedings. If there is an event of default, the RE Loan Lenders may declare all or any portion of the outstanding indebtedness to be
immediately due and payable, exercise any rights they might have under the A&R RE Loan Agreement and related documents (including against the collateral), and require the A&R RE Loan Borrowers to pay a default interest rate equal to the
greater of (i) 2.5% in excess of the base interest rate and (ii) the prime rate plus 1%.
The A&R RE Loan Agreement permits
the RE Loan Lenders to syndicate or participate all or a portion of the outstanding loans, and the RE Loan Lenders have advised the A&R RE Loan Borrowers that they are amenable to syndicating all or a portion of the Incremental Loans to third
parties on the same terms.
