SEARS HOLDINGS CORPORATION (NASDAQ:SHLD) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry Into a Material Definitive Agreement
On July7, 2017, Sears Holdings Corporation (the “Company”), Sears Roebuck Acceptance Corp. (“SRAC”) and Kmart Corporation (together with SRAC, the “Borrowers”) entered into a first amendment (the “Amendment”) to the Second Lien Credit Agreement, dated as of September1, 2016 (as in effect prior to the Amendment, the “Credit Agreement”; the Credit Agreement, as Amended by the Amendment and as may be further amended, restated, modified or supplemented and in effect from time to time, the “Amended Credit Agreement”), among the Company, the Borrowers, the lenders from time to time party thereto and JPP, LLC, as administrative agent and collateral administrator (the “Agent”).
The Amendment, among other things, modifies the Credit Agreement to provide an uncommitted line of credit facility to which, subject to applicable borrowing base limitations, the Borrowers may from time to time borrow line of credit loans (“Line of Credit Loans”) in an aggregate principal amount not to exceed $500 million at any time outstanding from lenders that are or become party to the Amended Credit Agreement (the “Line of Credit Lenders”) on terms to be agreed. The Company expects to use proceeds from Line of Credit Loans for general corporate purposes.
The Line of Credit Loans will be secured on a pari passu basis with the Company’s existing obligations under the Credit Agreement, including the $300 million of term loans outstanding thereunder (the “Term Loan”), and its obligations under that certain Indenture, dated as of October12, 2010, by and among the Company, the Company subsidiaries from time to time party thereto and Wilmington Trust, National Association, as successor collateral agent, to which the Company issued its 6 5/8% Senior Secured Notes due 2018 (the “Notes”). The collateral includes inventory, receivables and other related assets of the Company and its subsidiaries which are obligated on the Line of Credit Loans, the Term Loan and the Notes. The Company’s obligations under the Amended Credit Agreement are guaranteed by all domestic subsidiaries of the Company that guarantee the Company’s obligations under its existing revolving credit facility.
Mr.EdwardS. Lampert, the Company’s Chief Executive Officer and Chairman, is the sole stockholder, chief executive officer and director of ESL Investments, Inc. (“ESL”), which controls the Agent. ESL has indicated that it is considering participating in the credit facility as a Line of Credit Lender, but ESL is under no obligation to do so.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is filed herewith as Exhibit 10.1 and is incorporated by reference herein.
Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Please see Item 1.01 above, which is incorporated herein by reference.
Private Securities Litigation Reform Act of 1995 –
A Caution Concerning Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company cautions that these forward-looking statements are subject to risks, uncertainties and assumptions, many of which are beyond its control, that may cause actual results to differ materially from those indicated in the forward-looking statements for a number of reasons, including, without limitation, risks and uncertainties relating to the Credit Agreement. Additional information concerning other factors is contained in the Company’s most recent annual report on Form 10-K and subsequent filings with the SEC. The Company intends these forward-looking statements to speak only as of the time made and, except as required by law, does not undertake to update or revise them as more information becomes available.
Item 1.01 Financial Statements and Exhibits
Exhibit 10.1 First Amendment to Second Lien Credit Agreement, dated as of July7, 2017, between Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation, the lenders party thereto, and JPP, LLC, as administrative agent and collateral administrator.
SEARS HOLDINGS CORP ExhibitEX-10.1 2 d411783dex101.htm EX-10.1 EX-10.1 EXHIBIT 10.1 FIRST AMENDMENT TO SECOND LIEN CREDIT AGREEMENT FIRST AMENDMENT TO SECOND LIEN CREDIT AGREEMENT (this Amendment) dated as of July 7,…To view the full exhibit click here
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.