SEARS HOLDINGS CORPORATION (NASDAQ:SHLD) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
The information required by Item1.01 is included in Item2.03
below and is incorporated by reference herein.
| Item2.03. |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On May22, 2017, Sears Holdings Corporation (the Company), through
Sears, Roebuck and Co., Sears Development Co., Innovel Solutions,
Inc., Big Beaver of Florida Development, LLC and Kmart
Corporation (collectively, Borrowers), entities wholly owned and
controlled, directly or indirectly by the Company, amended and
restated its $500 million secured short-term loan facility (the
Amended and Restated Loan Facility), with JPP, LLC, JPP II, LLC,
Cascade Investment, L.L.C., and certain other parties
(collectively, the Lenders). The Amended and Restated Loan
Facility requires the repayment of $100 million of the loans
outstanding thereunder on the original maturity date of July7,
2017 and extends the maturity with respect to $400 million of the
loans outstanding thereunder until January7, 2018. The Amended
and Restated Loan Facility also provides the Company with options
to further extend the maturity of the loan for up to an
additional six months, to July6, 2018, subject to the
satisfaction of certain conditions and the payment of certain
fees. Mr.EdwardS. Lampert, the Companys Chief Executive Officer
and Chairman, is the sole stockholder, chief executive officer
and director of ESL Investments, Inc., which controls JPP, LLC
and JPP II, LLC.
In connection with the Amended and Restated Loan Facility, the
Company paid a one-time extension fee equal to $8 million dollars
to the extending Lenders. The Amended and Restated Loan Facility
will have an annual base interest rate of 8%, with accrued
interest payable monthly during the term of the Amended and
Restated Loan Facility. The Amended and Restated Loan Facility is
guaranteed by the Company and is secured by a first priority lien
on 20 real properties owned by the Borrowers.
The Amended and Restated 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 Amended and Restated 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 foregoing description of the Amended and Restated Loan
Facility does not purport to be complete and is qualified in its
entirety by reference to the Amended and Restated Loan Agreement,
a copy of which is filed as Exhibit 10.1 hereto and is
incorporated into this Item2.03 by reference.
| Item8.01. | Other Events |
On May23, 2017, the Company issued a press release announcing the
entry into the Amended and Restated Loan Facility and certain
other matters. The press release is attached hereto as Exhibit
99.1 and is incorporated herein by reference.
| Item9.01. | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit10.1 |
Amended and Restated Loan Agreement, dated as of May22, 2017, between Sears, Roebuck and Co., Innovel Solutions, Inc., Big Beaver of Florida Development, LLC and Kmart Corporation, as Borrowers, and JPP, LLC, JPP II, LLC and Cascade Investment, L.L.C., as Initial Lenders |
|
| Exhibit99.1 | Press Release, dated May23, 2017 |
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Private Securities Litigation Reform Act of 1995
Cautionary Statement Concerning Forward-Looking
Statements
This Form 8-K contains forward-looking statements intended to
qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are subject to risks and uncertainties that may cause
the Companys actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by these forward-looking
statements. Such statements are based upon the current beliefs
and expectations of the Companys management and are subject to
significant risks and uncertainties. Factors that could cause
actual results to differ from those set forth in the
forward-looking statements include, but are not limited to, those
discussed in this Form 8-K and those discussed in the Companys
most recent Annual Report on Form 10-K and other filings with the
Securities and Exchange Commission. The Company intends the
forward-looking statements to speak only as of the time made and
does not undertake to update or revise them as more information
becomes available, except as required by law.
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About SEARS HOLDINGS CORPORATION (NASDAQ:SHLD)
Sears Holdings Corporation is an integrated retailer. The Company is the parent company of Kmart Holding Corporation (Kmart) and Sears, Roebuck and Co. (Sears). It operates through two segments: Kmart and Sears Domestic. It operates approximately 940 Kmart stores across over 50 states, Guam, Puerto Rico and the United States Virgin Islands. Kmart stores carry an array of products across various merchandise categories, including seasonal merchandise, toys, lawn and garden equipment, food and consumables and apparel, including products sold under labels, such as Jaclyn Smith, Joe Boxer and Alphaline and certain Sears brand products (such as Kenmore, Craftsman and DieHard) and services. Its Sears Domestic segment’s operations consist of full-line stores, specialty stores, commercial sales and home services. Full-line stores offer an array of products and service offerings across various merchandise categories, including appliances, consumer electronics/connected solutions and tools. SEARS HOLDINGS CORPORATION (NASDAQ:SHLD) Recent Trading Information
SEARS HOLDINGS CORPORATION (NASDAQ:SHLD) closed its last trading session down -0.07 at 7.78 with 1,704,519 shares trading hands.