Page 8 of 17 – SEC Filing
This Amendment No. 47 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 Institutional Partners, L.P., a Delaware limited partnership, RBS Investment Management, L.L.C., a Delaware limited liability company, CRK Partners, LLC, a Delaware limited
liability company, 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 a grant of shares of Holdings Common Stock by Holdings on August 31, 2016, pursuant to the Extension Letter between Holdings and
Mr. Lampert, Mr. Lampert acquired an additional 22,124 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 September 1, 2016, Holdings, Sears Roebuck Acceptance Corp. and Kmart Corporation (collectively, the Second-Lien
Borrowers), entered into that certain Second Lien Credit Agreement with the ESL Lenders (the Second Lien Credit Agreement), pursuant to which the Second-Lien Borrowers borrowed $300 million of term loans as the Second-Lien Term
Loan.
The maturity date for the Second-Lien Term Loan is July 20, 2020, and the Second-Lien Term Loan will not amortize. The Second
Lien Credit Agreement includes an accordion feature which allows the Second-Lien Borrowers to seek to obtain from third parties up to $200 million of additional loans under the Second Lien Credit Agreement on the same terms as the Second-Lien
Term Loan.
The Second-Lien Term Loan bears interest at a rate equal to, at the election of the Second-Lien Borrowers, either LIBOR
(subject to a 1.00% floor) or a specified prime rate (Base Rate), in either case plus an applicable margin. The margin with respect to the Second-Lien Term Loan is 7.50% for LIBOR loans and 6.50% for Base Rate loans.
Pursuant to the Security Agreement (as defined below) Holdings obligations under the Second Lien Credit Agreement are secured on a pari
passu basis with Holdings obligations under that certain Indenture, dated as of October 12, 2010, by and among Holdings, Holdings subsidiaries from time to time party thereto and Wilmington Trust, National Association, as successor
collateral agent (Wilmington Trust), pursuant to which Holdings issued the Notes. The collateral includes inventory, receivables and other related assets of Holdings and its subsidiaries which are obligated on the Second-Lien Term Loan
and the Notes. The Second Lien Credit Agreement will be guaranteed by all domestic subsidiaries of Holdings that guarantee Holdings obligations under its existing revolving credit facility.
The Second Lien Credit Agreement includes customary representations and warranties, covenants and other undertakings, which representations
and warranties, covenants and undertakings are subject to important qualifications and limitations set forth in the Second Lien Credit Agreement. The Second Lien Credit Agreement also contains customary 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 ESL Lenders may
declare all or any portion of the outstanding indebtedness to be immediately due and payable, and exercise any rights they might have under any of the related facility documents (including against the collateral), subject to the Security Agreement
and the Intercreditor Agreement (as defined below).
This Amendment No. 47 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 Institutional Partners, L.P., a Delaware limited partnership, RBS Investment Management, L.L.C., a Delaware limited liability company, CRK Partners, LLC, a Delaware limited
liability company, 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 a grant of shares of Holdings Common Stock by Holdings on August 31, 2016, pursuant to the Extension Letter between Holdings and
Mr. Lampert, Mr. Lampert acquired an additional 22,124 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 September 1, 2016, Holdings, Sears Roebuck Acceptance Corp. and Kmart Corporation (collectively, the Second-Lien
Borrowers), entered into that certain Second Lien Credit Agreement with the ESL Lenders (the Second Lien Credit Agreement), pursuant to which the Second-Lien Borrowers borrowed $300 million of term loans as the Second-Lien Term
Loan.
The maturity date for the Second-Lien Term Loan is July 20, 2020, and the Second-Lien Term Loan will not amortize. The Second
Lien Credit Agreement includes an accordion feature which allows the Second-Lien Borrowers to seek to obtain from third parties up to $200 million of additional loans under the Second Lien Credit Agreement on the same terms as the Second-Lien
Term Loan.
The Second-Lien Term Loan bears interest at a rate equal to, at the election of the Second-Lien Borrowers, either LIBOR
(subject to a 1.00% floor) or a specified prime rate (Base Rate), in either case plus an applicable margin. The margin with respect to the Second-Lien Term Loan is 7.50% for LIBOR loans and 6.50% for Base Rate loans.
Pursuant to the Security Agreement (as defined below) Holdings obligations under the Second Lien Credit Agreement are secured on a pari
passu basis with Holdings obligations under that certain Indenture, dated as of October 12, 2010, by and among Holdings, Holdings subsidiaries from time to time party thereto and Wilmington Trust, National Association, as successor
collateral agent (Wilmington Trust), pursuant to which Holdings issued the Notes. The collateral includes inventory, receivables and other related assets of Holdings and its subsidiaries which are obligated on the Second-Lien Term Loan
and the Notes. The Second Lien Credit Agreement will be guaranteed by all domestic subsidiaries of Holdings that guarantee Holdings obligations under its existing revolving credit facility.
The Second Lien Credit Agreement includes customary representations and warranties, covenants and other undertakings, which representations
and warranties, covenants and undertakings are subject to important qualifications and limitations set forth in the Second Lien Credit Agreement. The Second Lien Credit Agreement also contains customary 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 ESL Lenders may
declare all or any portion of the outstanding indebtedness to be immediately due and payable, and exercise any rights they might have under any of the related facility documents (including against the collateral), subject to the Security Agreement
and the Intercreditor Agreement (as defined below).
