Page 9 of 18 – SEC Filing
amounts drawn under the Secured Loan Facility at the time such amounts are drawn. If amounts remain outstanding or committed under the Secured Loan Facility after 9 months, a delayed origination
fee equal to 0.5% of such amounts becomes payable, and if amounts remain outstanding or committed under the Secured Loan Facility after 12 months, an additional delayed origination fee equal to 0.5% of such amounts becomes payable.
The Secured Loan Facility is guaranteed by Holdings, is currently secured by a first priority lien on 13 real properties owned by the
Borrowers, and will be secured by an additional 8 real properties beginning on the date any additional amounts are drawn. In certain circumstances, the Lenders may exercise the right to require the Borrowers to replace one or more of the mortgaged
properties with substitute properties. The Secured Loan Facility includes customary representations and warranties, indemnities and covenants, including with respect to the condition and maintenance of the real property collateral.
The Secured Loan Facility has 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 Lenders may declare all or any portion of the outstanding indebtedness to be
immediately due and payable, exercise any rights they might have under any of the Secured Loan Facility documents (including against the collateral), and require the 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 Secured Loan Facility may be prepaid at any time in whole or in part, without penalty or premium.
Under the terms of the Secured Loan Facility, Holdings is required to retain a broker and use commercially reasonable efforts to syndicate the
Secured Loan Facility. Any subsequent Lender who provides a portion of the Secured Loan Facility as part of the syndication will be entitled to share (based on loan amount and time outstanding) in the origination and funding fees. The ESL Lenders,
on the one hand, and Cascade, on the other, each provided $125 million of the initial $250 million drawn under the Secured Loan Facility and have each committed to provide any portion of the Secured Loan Facility that is not syndicated to other
Lenders.
The foregoing is qualified in its entirety by references to that certain Loan Agreement, entered into in connection with the
Secured Loan Facility, attached hereto as Exhibit 99.26 and incorporated by reference herein.
In connection with the Secured Loan
Facility, on April 8, 2016, the Lenders entered into a co-lender agreement to govern the relationship among the Lenders with respect to their interests in the Secured Loan Facility (the Co-Lender Agreement). Pursuant to the
Co-Lender Agreement, the ESL Lenders were named as administrative agent and collateral agent for themselves and the other Lenders for purposes of administration of the Secured Loan Facility and, in connection therewith, the ESL Lenders may take any
and all actions on behalf of the Lenders as the Lenders are obligated or entitled to take under the terms of the Co-Lender Agreement, the Secured Loan Facility and/or other documents entered into in connection therewith, subject to certain actions
that require the consent of some or all of the other Lenders. In addition, the Co-Lender Agreement governs (i) the process for the distribution of any origination fees, funding fees, delayed origination fees, and/or other funds in connection
with the Secured Loan Facility, (ii) the ability of Cascade to transfer its interest in the Secured Loan Facility to an additional Lender, and (iii) the voting and approval process for actions to be taken by or on behalf of the Lenders
with respect to the Secured Loan Facility.
The foregoing is qualified in its entirety by references to the Co-Lender Agreement attached
hereto as Exhibit 99.27 and incorporated by reference herein.
Also on April 8, 2016, Holdings, Sears Roebuck Acceptance Corp. and
Kmart Corporation closed on a $750 million Senior Secured Term Loan (the Term Loan). Certain affiliates of the Reporting Persons have advised Holdings and Bank of America, N.A., as agent for the Term Loan, that they intend to participate
in the syndicate of lenders with respect to the Term Loan for $150 million of the Term Loan. The syndication has not yet been finalized.
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended and restated in its entirety as follows:
amounts drawn under the Secured Loan Facility at the time such amounts are drawn. If amounts remain outstanding or committed under the Secured Loan Facility after 9 months, a delayed origination
fee equal to 0.5% of such amounts becomes payable, and if amounts remain outstanding or committed under the Secured Loan Facility after 12 months, an additional delayed origination fee equal to 0.5% of such amounts becomes payable.
The Secured Loan Facility is guaranteed by Holdings, is currently secured by a first priority lien on 13 real properties owned by the
Borrowers, and will be secured by an additional 8 real properties beginning on the date any additional amounts are drawn. In certain circumstances, the Lenders may exercise the right to require the Borrowers to replace one or more of the mortgaged
properties with substitute properties. The Secured Loan Facility includes customary representations and warranties, indemnities and covenants, including with respect to the condition and maintenance of the real property collateral.
The Secured Loan Facility has 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 Lenders may declare all or any portion of the outstanding indebtedness to be
immediately due and payable, exercise any rights they might have under any of the Secured Loan Facility documents (including against the collateral), and require the 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 Secured Loan Facility may be prepaid at any time in whole or in part, without penalty or premium.
Under the terms of the Secured Loan Facility, Holdings is required to retain a broker and use commercially reasonable efforts to syndicate the
Secured Loan Facility. Any subsequent Lender who provides a portion of the Secured Loan Facility as part of the syndication will be entitled to share (based on loan amount and time outstanding) in the origination and funding fees. The ESL Lenders,
on the one hand, and Cascade, on the other, each provided $125 million of the initial $250 million drawn under the Secured Loan Facility and have each committed to provide any portion of the Secured Loan Facility that is not syndicated to other
Lenders.
The foregoing is qualified in its entirety by references to that certain Loan Agreement, entered into in connection with the
Secured Loan Facility, attached hereto as Exhibit 99.26 and incorporated by reference herein.
In connection with the Secured Loan
Facility, on April 8, 2016, the Lenders entered into a co-lender agreement to govern the relationship among the Lenders with respect to their interests in the Secured Loan Facility (the Co-Lender Agreement). Pursuant to the
Co-Lender Agreement, the ESL Lenders were named as administrative agent and collateral agent for themselves and the other Lenders for purposes of administration of the Secured Loan Facility and, in connection therewith, the ESL Lenders may take any
and all actions on behalf of the Lenders as the Lenders are obligated or entitled to take under the terms of the Co-Lender Agreement, the Secured Loan Facility and/or other documents entered into in connection therewith, subject to certain actions
that require the consent of some or all of the other Lenders. In addition, the Co-Lender Agreement governs (i) the process for the distribution of any origination fees, funding fees, delayed origination fees, and/or other funds in connection
with the Secured Loan Facility, (ii) the ability of Cascade to transfer its interest in the Secured Loan Facility to an additional Lender, and (iii) the voting and approval process for actions to be taken by or on behalf of the Lenders
with respect to the Secured Loan Facility.
The foregoing is qualified in its entirety by references to the Co-Lender Agreement attached
hereto as Exhibit 99.27 and incorporated by reference herein.
Also on April 8, 2016, Holdings, Sears Roebuck Acceptance Corp. and
Kmart Corporation closed on a $750 million Senior Secured Term Loan (the Term Loan). Certain affiliates of the Reporting Persons have advised Holdings and Bank of America, N.A., as agent for the Term Loan, that they intend to participate
in the syndicate of lenders with respect to the Term Loan for $150 million of the Term Loan. The syndication has not yet been finalized.
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended and restated in its entirety as follows:
