SHLDQ Sears Holdings Corporation (CE)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 37)*

 

 

Sears Holdings Corporation

(Name of Issuer)

Common Shares

(Title of Class of Securities)

812350106

(CUSIP Number)

Janice V. Sharry, Esq.

Haynes and Boone, LLP

2323 Victory Avenue, Suite 700

Dallas, Texas 75219

(214) 651-5000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

June 26, 2015

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ¨

 

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

 

 

 

*	The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   ESL Partners, L.P.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   26,820,859 (1)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   26,820,859 (1)
				10.		Shared Dispositive Power   31,247,258 (2)
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   58,068,117 (1)(2)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   52.1% (3)
14.		Type of Reporting Person (See Instructions)   PN

 

(1)	Includes 4,828,219 shares of Holdings Common Stock that may be acquired by the reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(2)	Includes 5,700,163 shares of Holdings Common Stock that may be acquired by a reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(3)

Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 4,828,219 shares of Holdings Common Stock that may be acquired by the reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   SPE I Partners, LP
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   1,501,241 (1)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   1,501,241 (1)
				10.		Shared Dispositive Power   0
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   1,501,241 (1)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   1.4% (2)
14.		Type of Reporting Person (See Instructions)   PN

 

(1)

As a result of a ministerial error, SPE I Partners, LP previously disclosed in the Amendment to Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on June 16, 2015 that it distributed 438,630 common shares pro-rata to its partners, rather than the 438,631 common shares which were actually distributed to its partners.

(2)	Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   SPE Master I, LP
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   1,933,413
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   1,933,413
				10.		Shared Dispositive Power   0
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   1,933,413
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   1.8% (1)
14.		Type of Reporting Person (See Instructions)   PN

 

(1)	Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   RBS Partners, L.P.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   30,255,513 (1)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   30,255,513 (1)
				10.		Shared Dispositive Power   31,247,258 (2)
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   61,502,771 (1)(2)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   55.2% (3)
14.		Type of Reporting Person (See Instructions)   PN

 

(1)	Includes 4,828,219 shares of Holdings Common Stock that may be acquired by a reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(2)	Includes 5,700,163 shares of Holdings Common Stock that may be acquired by a reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(3)

Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and an aggregate of 4,828,219 shares of Holdings Common Stock that may be acquired by a reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   ESL Institutional Partners, L.P.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   12,341 (1)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   12,341 (1)
				10.		Shared Dispositive Power   0
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   12,341 (1)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   0.0% (2)
14.		Type of Reporting Person (See Instructions)   PN

 

(1)	Includes 2,111 shares of Holdings Common Stock that may be acquired by the reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(2)

Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 2,111 shares of Holdings Common Stock that may be acquired by the reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   RBS Investment Management, L.L.C.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   12,341 (1)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   12,341 (1)
				10.		Shared Dispositive Power   0
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   12,341 (1)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   0.0% (2)
14.		Type of Reporting Person (See Instructions)   OO

 

(1)	Includes 2,111 shares of Holdings Common Stock that may be acquired by a reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(2)

Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 2,111 shares of Holdings Common Stock that may be acquired by a reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   CRK Partners, LLC
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   887 (1)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   887 (1)
				10.		Shared Dispositive Power   0
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   887 (1)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   0.0% (2)
14.		Type of Reporting Person (See Instructions)   OO

 

(1)	Includes 140 shares of Holdings Common Stock that may be acquired by the reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(2)

Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 140 shares of Holdings Common Stock that may be acquired by the reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   ESL Investments, Inc.
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   Delaware
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   30,268,741 (1)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   30,268,741 (1)
				10.		Shared Dispositive Power   31,247,258 (2)
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   61,515,999 (1)(2)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   55.2% (3)
14.		Type of Reporting Person (See Instructions)   CO

 

(1)	Includes an aggregate of 4,830,470 shares of Holdings Common Stock that may be acquired by certain of the reporting persons within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(2)	Includes an aggregate of 5,700,163 shares of Holdings Common Stock that may be acquired by a reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(3)

Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and an aggregate of 4,830,470 shares of Holdings Common Stock that may be acquired by certain of the reporting persons within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock.

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CUSIP No. 812350106

 

1.		Names of Reporting Persons.   Edward S. Lampert
2.		Check the Appropriate Box if a Member of a Group (See Instructions) (a)  x        (b)  ¨
3.		SEC Use Only
4.		Source of Funds (See Instructions)   OO
5.		Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)    ¨
6.		Citizenship or Place of Organization   United States
Number of Shares Beneficially Owned by Each Reporting Person With				7.		Sole Voting Power   61,515,999 (1)(2)
				8.		Shared Voting Power   0
				9.		Sole Dispositive Power   30,268,741 (1)
				10.		Shared Dispositive Power   31,247,258 (2)
11.		Aggregate Amount Beneficially Owned by Each Reporting Person   61,515,999 (1)(2)
12.		Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)    ¨
13.		Percent of Class Represented by Amount in Row (11)   52.5% (3)
14.		Type of Reporting Person (See Instructions)   IN

 

(1)	Includes an aggregate of 4,830,470 shares of Holdings Common Stock that may be acquired by certain of the reporting persons within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(2)	Includes an aggregate of 5,700,163 shares of Holdings Common Stock that may be acquired by the reporting person within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock from Holdings.

(3)

Based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and an aggregate of 10,530,633 shares of Holdings Common Stock that may be acquired by the reporting persons within 60 days upon the exercise of Warrants to purchase shares of Holdings Common Stock.

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This Amendment No. 37 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”, and together with SPE I, the “SPEs”), RBS Partners, L.P., a Delaware limited partnership (“RBS”), ESL Institutional Partners, L.P., a Delaware limited partnership (“Institutional”), RBS Investment Management, L.L.C., a Delaware limited liability company (“RBSIM”), CRK Partners, LLC, a Delaware limited liability company (“CRK LLC”), 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 4. Purpose of Transaction.

Item 4 is hereby amended and supplemented as follows:

“In connection with the Seritage Rights Offering, on June 22, 2015, Institutional distributed pro rata to its partners, including Mr. Lampert, all the subscription rights it received in the Seritage Rights Offering. In addition, on June 23, 2015, CRK LLC distributed pro rata to its owners, including Mr. Lampert, all the subscription rights it received in the Seritage Rights Offering.

On June 26, 2015, in connection with the Seritage Rights Offering, ESL and Mr. Lampert (together, the “Participants”) entered into an exchange agreement (the “Exchange Agreement”) with Seritage Growth Properties, L.P., a Delaware limited partnership (the “Operating Partnership”), and Seritage. Pursuant to the Exchange Agreement, each Participant has agreed to exchange cash and subscription rights received pursuant to the Seritage Rights Offering that, if exercised, would result in the Participants receiving in excess of 3.2% of the Seritage common shares, for Operating Partnership units (“OP Units”) and Class B non-economic shares of beneficial interest, par value $0.01 per share, of Seritage (“Class B Shares”). The Class B Shares will have, in the aggregate, 6.6% of the voting power of Seritage at the closing of the rights offering by Seritage but will not be entitled to dividends or distributions. The Exchange Agreement allows the Participants to participate in the over-subscription privilege with respect to subscription rights they exchange to the same extent as if they had exercised such rights. In addition, the Participants have agreed that upon any sale or other transfer to a non-affiliate of any of the OP Units received pursuant to the Exchange Agreement, they will surrender to Seritage a pro rata portion of the Class B Shares that they hold, whereupon the surrendered shares will be cancelled and the aggregate voting power of the Participants in Seritage will be reduced. This description of the Exchange Agreement does not purport to be complete and is qualified by reference to Exhibit 99.20 of this Amendment, which is included as an exhibit hereto and is incorporated by reference herein.”

Item 5. Interest in Securities of the Issuer.

Item 5 is hereby amended and restated in its entirety as follows:

“(a)-(b) Each Reporting Person declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, the beneficial owner of any securities covered by this statement.

Each Reporting Person may be deemed to be a member of a group with respect to Holdings or securities of Holdings for the purposes of Section 13(d) or 13(g) of the Act. Each Reporting Person declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of Holdings or otherwise with respect to Holdings or any securities of Holdings or (ii) a member of any syndicate or group with respect to Holdings or any securities of Holdings.

As of June 29, 2015, the Reporting Persons may be deemed to beneficially own the shares of Holdings Common Stock set forth in the table below.

 

REPORTING PERSON		NUMBER OF SHARES BENEFICIALLY OWNED				PERCENTAGE OF OUTSTANDING SHARES				SOLE VOTING POWER				SHARED VOTING POWER				SOLE DISPOSITIVE POWER				SHARED DISPOSITIVE POWER
ESL Partners, L.P.			58,068,117	(1)(2)			52.1	% (3)			26,820,859	(2)			0				26,820,859	(2)			31,247,258	(1)
SPE I Partners, LP (4)			1,501,241				1.4	%			1,501,241				0				1,501,241				0
SPE Master I, LP			1,933,413				1.8	%			1,933,413				0				1,933,413				0

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RBS Partners, L.P.			61,502,771	(1)(5)			55.2	% (6)			30,255,513	(5)			0				30,255,513	(5)			31,247,258	(1)
ESL Institutional Partners, L.P.			12,341	(7)			0.0	% (8)			12,341	(7)			0				12,341	(7)			0
RBS Investment Management, L.L.C.			12,341	(9)			0.0	% (10)			12,341	(9)			0				12,341	(9)			0
CRK Partners, LLC			887	(11)			0.0	% (12)			887	(11)			0				887	(11)			0
ESL Investments, Inc.			61,515,999	(1)(13)			55.2	% (14)			30,268,741	(13)			0				30,268,741	(13)			31,247,258	(1)
Edward S. Lampert			61,515,999	(1)(15)			52.5	% (16)			61,515,999	(1)(15)			0				30,268,741	(15)			31,247,258	(1)

 

(1)

This number includes 25,547,095 shares of Holdings Common Stock held by Mr. Lampert and 5,700,163 shares of Holdings Common Stock that Mr. Lampert has the right to acquire within 60 days pursuant to the Warrants held by Mr. Lampert. Partners has entered into a Lock-Up Agreement with Mr. Lampert that restricts the purchase and sale of securities owned by Mr. Lampert. Pursuant to the Lock-Up Agreement, Partners may be deemed to have shared dispositive power over, and to indirectly beneficially own, securities owned by Mr. Lampert. RBS, ESL and Mr. Lampert may also be deemed to have shared dispositive power over, and to indirectly beneficially own, such securities.

(2)	This number includes 21,992,640 shares of Holdings Common Stock held by Partners and 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners.

(3)

This is based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners.

(4)

As a result of a ministerial error, SPE I previously disclosed in the Amendment to Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission on June 16, 2015 that it distributed 438,630 common shares pro rata to its partners, rather than the 438,631 common shares which were actually distributed to its partners.

(5)

This number includes 21,992,640 shares of Holdings Common Stock held by Partners, 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners, 1,501,241 shares of Holdings Common Stock held by SPE I and 1,933,413 shares of Holdings Common Stock held by SPE Master I. RBS is the general partner of, and may be deemed to indirectly beneficially own securities owned by, Partners, SPE I and SPE Master I.

(6)

This is based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners. RBS is the general partner of, and may be deemed to indirectly beneficially own securities owned by, Partners.

(7)	This number includes 10,230 shares of Holdings Common Stock held by Institutional and 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional.

(8)

This is based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional.

(9)

This number includes 10,230 shares of Holdings Common Stock held by Institutional and 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional. RBSIM is the general partner of, and may be deemed to indirectly beneficially own securities owned by, Institutional.

(10)

This is based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional. RBSIM is the general partner of, and may be deemed to indirectly beneficially own securities owned by, Institutional.

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(11)	This number includes 747 shares of Holdings Common Stock held by CRK LLC and 140 shares of Holdings Common Stock that CRK LLC has the right to acquire within 60 days pursuant to the Warrants held by CRK LLC.

(12)

This is based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, and 140 shares of Holdings Common Stock that CRK LLC has the right to acquire within 60 days pursuant to the Warrants held by CRK LLC.

(13)

This number includes 21,992,640 shares of Holdings Common Stock held by Partners, 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners, 1,501,241 shares of Holdings Common Stock held by SPE I, 1,933,413 shares of Holdings Common Stock held by SPE Master I, 10,230 shares of Holdings Common Stock held by Institutional, 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional, 747 shares of Holdings Common Stock held by CRK LLC and 140 shares of Holdings Common Stock that CRK LLC has the right to acquire within 60 days pursuant to the Warrants held by CRK LLC. ESL is the general partner of, and may be deemed to indirectly beneficially own securities owned by, RBS. ESL is the manager of, and may be deemed to indirectly beneficially own securities owned by, RBSIM. ESL is the sole member of, and may be deemed to indirectly beneficially own securities owned by, CRK LLC.

(14)

This is based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, the 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners, the 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional, and the 140 shares of Holdings Common Stock that CRK LLC has the right to acquire within 60 days pursuant to the Warrants held by CRK LLC. ESL is the general partner of, and may be deemed to indirectly beneficially own securities owned by, RBS. ESL is the manager of, and may be deemed to indirectly beneficially own securities owned by, RBSIM. ESL is the sole member of, and may be deemed to indirectly beneficially own securities owned by, CRK LLC.

(15)

This number includes 21,992,640 shares of Holdings Common Stock held by Partners, 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners, 1,501,241 shares of Holdings Common Stock held by SPE I, 1,933,413 shares of Holdings Common Stock held by SPE Master I, 10,230 shares of Holdings Common Stock held by Institutional, 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional, 747 shares of Holdings Common Stock held by CRK LLC and 140 shares of Holdings Common Stock that CRK LLC has the right to acquire within 60 days pursuant to the Warrants held by CRK LLC. Mr. Lampert is the Chairman, Chief Executive Officer and Director of, and may be deemed to indirectly beneficially own securities owned by, ESL.

(16)

This is based upon 106,602,160 common shares outstanding as of May 29, 2015, as disclosed in Holdings’ Quarterly Report on Form 10-Q for the quarter ended May 2, 2015, that was filed by Holdings with the Securities and Exchange Commission on June 8, 2015, the 5,700,163 shares of Holdings Common Stock that Mr. Lampert has the right to acquire within 60 days pursuant to the Warrants held by Mr. Lampert, the 4,828,219 shares of Holdings Common Stock that Partners has the right to acquire within 60 days pursuant to the Warrants held by Partners, the 2,111 shares of Holdings Common Stock that Institutional has the right to acquire within 60 days pursuant to the Warrants held by Institutional, and the 140 shares of Holdings Common Stock that CRK LLC has the right to acquire within 60 days pursuant to the Warrants held by CRK LLC. Mr. Lampert is the Chairman, Chief Executive Officer and Director of, and may be deemed to indirectly beneficially own securities owned by, ESL.

(c) There have been no transactions in the class of securities reported on that were effected by the Reporting Persons during the past sixty days or since the most recent filing of Schedule 13D, whichever is less. However, given the ministerial error with respect to the pro rata distribution by SPE I, a revised Annex B correctly showing the distribution by SPE I is attached hereto.

(d) Not applicable.

(e) Not applicable.”

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended and supplemented as follows:

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“The information set forth in Item 4 is incorporated by reference into this Item 6.”

Item 7. Material to be Filed as Exhibits.

Item 7 is hereby amended and restated in its entirety as follows:

“The following exhibits are filed as exhibits hereto:

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Exhibit		Description of Exhibit
99.1		Amendment, dated March 22, 2005, to the Agreement, dated January 31, 2005, among Kmart Holding Corporation, Sears Holdings Corporation, ESL Partners, L.P., ESL Investors, L.L.C., ESL Institutional Partners, L.P. and CRK Partners II, L.P. (incorporated by reference to Exhibit L to the Amendment to Schedule 13D filed on April 1, 2005).
99.2		Acknowledgement, dated March 24, 2005, by Sears Holdings Corporation (relating to the assumption of the Registration Rights Agreement) (incorporated by reference to Exhibit K to the Amendment to Schedule 13D filed on April 1, 2005).
99.3		Letter Agreement, dated June 2, 2010, between ESL Partners, L.P. and Edward S. Lampert (incorporated by reference to Exhibit 8 to the Amendment to Schedule 13D filed on June 2, 2010).
99.5		Joint Filing Agreement (incorporated by reference to Exhibit 99.5 to the Amendment to Schedule 13D filed on March 11, 2013).
99.6		Form of Letter (incorporated by reference to Exhibit 10.30 to Holdings’ Annual Report on Form 10-K filed on March 20, 2013).
99.7		Loan Agreement, dated September 15, 2014, among Sears, Roebuck and Co., Sears Development Co. and Kmart Corporation, and JPP II, LLC and JPP, LLC (incorporated by reference to Exhibit 99.7 to the Amendment to Schedule 13D filed on September 16, 2014).
99.8		Participation Agreement, dated September 22, 2014, among PYOF 2014 Loans, LLC, and JPP II, LLC and JPP, LLC (incorporated by reference to Exhibit 99.8 to the Amendment to Schedule 13D filed on September 24, 2014).
99.9		Amended and Restated Participation Agreement, dated September 30, 2014, among PYOF 2014 Loans, LLC, The Fairholme Partnership, LP, and JPP II, LLC and JPP, LLC (incorporated herein by reference to Exhibit 99.9 to the Amendment to Schedule 13D filed on October 1, 2014).
99.10		Form of Subscription Rights Certificate (incorporated herein by reference to Exhibit 99.10 to the Amendment to Schedule 13D filed on October 17, 2014).
99.11		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE Master I, LP and ESL Partners, L.P. (incorporated herein by reference to Exhibit 99.11 to the Amendment to Schedule 13D filed on October 28, 2014).
99.12		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE Master I, LP and Mr. Edward S. Lampert (incorporated herein by reference to Exhibit 99.12 to the Amendment to Schedule 13D filed on October 28, 2014).
99.13		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE I Partners, LP and ESL Partners, L.P. (incorporated herein by reference to Exhibit 99.13 to the Amendment to Schedule 13D filed on October 28, 2014).
99.14		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE I Partners, LP and Mr. Edward S. Lampert (incorporated herein by reference to Exhibit 99.14 to the Amendment to Schedule 13D filed on October 28, 2014).
99.15		Form of Subscription Rights Certificate (incorporated herein by reference to Exhibit 99.15 to the Amendment to Schedule 13D filed on November 12, 2014).
99.16		Form of Note (incorporated herein by reference to Exhibit 4.3 to the Post-Effective Amendment No. 1 to Form S-3 Registration Statement, filed by Holdings with the Securities and Exchange Commission on October 30, 2014).
99.17		Form of Warrant Certificate (incorporated herein by reference to Exhibit 4.4 to the Post-Effective Amendment No. 1 to Form S-3 Registration Statement, filed by Holdings with the Securities and Exchange Commission on October 30, 2014).
99.18		Amendment to Loan Agreement, entered into on February 25, 2015 and effective as of February 28, 2015, by and between JPP II, LLC and JPP, LLC and Sears, Roebuck and Co., Sears Development Co. and Kmart Corporation (incorporated herein by reference to Exhibit 10.1 to the Form 8-K, filed by Holdings with the Securities and Exchange Commission on February 26, 2015).
99.19		Form of Subscription Rights Certificate (incorporated herein by reference to Exhibit 99.19 to the Amendment to Schedule 13D filed on June 16, 2015).
99.20		Exchange Agreement, dated as of June 26, 2015, by and among ESL Partners, L.P. and Edward S. Lampert and Seritage Growth Properties, L.P. and Seritage Growth Properties (filed herewith).”

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SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date: June 29, 2015				ESL PARTNERS, L.P.
				By:		RBS Partners, L.P., as its general partner
				By:		ESL Investments, Inc., as its general partner
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				SPE I PARTNERS, LP
				By:		RBS Partners, L.P., as its general partner
				By:		ESL Investments, Inc., as its general partner
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				SPE MASTER I, LP
				By:		RBS Partners, L.P., as its general partner
				By:		ESL Investments, Inc., as its general partner
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				RBS PARTNERS, L.P.
				By:		ESL Investments, Inc., as its general partner
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				ESL INSTITUTIONAL PARTNERS, L.P.
				By:		RBS Investment Management, L.L.C., as its general partner
				By:		ESL Investments, Inc., as its manager
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				RBS INVESTMENT MANAGEMENT, L.L.C.
				By:		ESL Investments, Inc., as its manager
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer

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				CRK PARTNERS, LLC
				By:		ESL Investments, Inc., as its sole member
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				ESL INVESTMENTS, INC.
				By:		/s/ Edward S. Lampert
				Name:		Edward S. Lampert
				Title:		Chief Executive Officer
				EDWARD S. LAMPERT
				By:		/s/ Edward S. Lampert

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EXHIBIT INDEX

 

Exhibit		Description of Exhibit
99.1		Amendment, dated March 22, 2005, to the Agreement, dated January 31, 2005, among Kmart Holding Corporation, Sears Holdings Corporation, ESL Partners, L.P., ESL Investors, L.L.C., ESL Institutional Partners, L.P. and CRK Partners II, L.P. (incorporated by reference to Exhibit L to the Amendment to Schedule 13D filed on April 1, 2005).
99.2		Acknowledgement, dated March 24, 2005, by Sears Holdings Corporation (relating to the assumption of the Registration Rights Agreement) (incorporated by reference to Exhibit K to the Amendment to Schedule 13D filed on April 1, 2005).
99.3		Letter Agreement, dated June 2, 2010, between ESL Partners, L.P. and Edward S. Lampert (incorporated by reference to Exhibit 8 to the Amendment to Schedule 13D filed on June 2, 2010).
99.5		Joint Filing Agreement (incorporated by reference to Exhibit 99.5 to the Amendment to Schedule 13D filed on March 11, 2013).
99.6		Form of Letter (incorporated by reference to Exhibit 10.30 to Holdings’ Annual Report on Form 10-K filed on March 20, 2013).
99.7		Loan Agreement, dated September 15, 2014, among Sears, Roebuck and Co., Sears Development Co. and Kmart Corporation, and JPP II, LLC and JPP, LLC (incorporated by reference to Exhibit 99.7 to the Amendment to Schedule 13D filed on September 16, 2014).
99.8		Participation Agreement, dated September 22, 2014, among PYOF 2014 Loans, LLC, and JPP II, LLC and JPP, LLC (incorporated by reference to Exhibit 99.8 to the Amendment to Schedule 13D filed on September 24, 2014).
99.9		Amended and Restated Participation Agreement, dated September 30, 2014, among PYOF 2014 Loans, LLC, The Fairholme Partnership, LP, and JPP II, LLC and JPP, LLC (incorporated herein by reference to Exhibit 99.9 to the Amendment to Schedule 13D filed on October 1, 2014).
99.10		Form of Subscription Rights Certificate (incorporated herein by reference to Exhibit 99.10 to the Amendment to Schedule 13D filed on October 17, 2014).
99.11		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE Master I, LP and ESL Partners, L.P. (incorporated herein by reference to Exhibit 99.11 to the Amendment to Schedule 13D filed on October 28, 2014).
99.12		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE Master I, LP and Mr. Edward S. Lampert (incorporated herein by reference to Exhibit 99.12 to the Amendment to Schedule 13D filed on October 28, 2014).
99.13		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE I Partners, LP and ESL Partners, L.P. (incorporated herein by reference to Exhibit 99.13 to the Amendment to Schedule 13D filed on October 28, 2014).
99.14		Rights Purchase Agreement, dated as of October 26, 2014, by and between SPE I Partners, LP and Mr. Edward S. Lampert (incorporated herein by reference to Exhibit 99.14 to the Amendment to Schedule 13D filed on October 28, 2014).
99.15		Form of Subscription Rights Certificate (incorporated herein by reference to Exhibit 99.15 to the Amendment to Schedule 13D filed on November 12, 2014).
99.16		Form of Note (incorporated herein by reference to Exhibit 4.3 to the Post-Effective Amendment No. 1 to Form S-3 Registration Statement, filed by Holdings with the Securities and Exchange Commission on October 30, 2014).
99.17		Form of Warrant Certificate (incorporated herein by reference to Exhibit 4.4 to the Post-Effective Amendment No. 1 to Form S-3 Registration Statement, filed by Holdings with the Securities and Exchange Commission on October 30, 2014).
99.18		Amendment to Loan Agreement, entered into on February 25, 2015 and effective as of February 28, 2015, by and between JPP II, LLC and JPP, LLC and Sears, Roebuck and Co., Sears Development Co. and Kmart Corporation (incorporated herein by reference to Exhibit 10.1 to the Form 8-K, filed by Holdings with the Securities and Exchange Commission on February 26, 2015).
99.19		Form of Subscription Rights Certificate (incorporated herein by reference to Exhibit 99.19 to the Amendment to Schedule 13D filed on June 16, 2015).
99.20		Exchange Agreement, dated as of June 26, 2015, by and among ESL Partners, L.P. and Edward S. Lampert and Seritage Growth Properties, L.P. and Seritage Growth Properties (filed herewith).

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ANNEX B

RECENT TRANSACTIONS BY THE REPORTING PERSONS IN THE SECURITIES OF

SEARS HOLDINGS CORPORATION

 

Entity

Date of Transaction

Description                          of Transaction

Shares Acquired

Shares Disposed

Price Per Share

SPE I Partners, LP

06/15/2015

Pro-Rata Distribution to its Partners

438,631

$

0

Exhibit 99.20

EXECUTION VERSION

 

EXCHANGE AGREEMENT

by and among

ESL PARTNERS, L.P.

and

EDWARD S. LAMPERT

and

SERITAGE GROWTH PROPERTIES, L.P.

and

SERITAGE GROWTH PROPERTIES

June 26, 2015

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TABLE OF CONTENTS

 

						Page
1.		Definitions					2
2.		Exchange					4
		2.1		Exchange			4
		2.2		Exchange Closing			4
3.		Representations and Warranties of the Company					4
		3.1		Existence and Power			4
		3.2		Capitalization			5
		3.3		Authorization			5
		3.4		Valid Issuance of Exchange Interests			5
		3.5		Non-Contravention; No Consents			5
4.		Representations and Warranties of the Holders					6
		4.1		Organization; Ownership			6
		4.2		Authorization			6
		4.3		Non-Contravention, No Consents			6
		4.4		SHC Securities			6
		4.5		Securities Act Representations			7
		4.6		Brokers and Finders			7
		4.7		No Additional Representations			7
5.		Covenants					8
		5.1		Taking of Necessary Action			8
		5.2		Securities Laws; Legends			9
		5.3		Proportional Surrender			10
6.		Termination					10
		6.1		Conditions of Termination			10
		6.2		Effect of Termination			10
7.		Miscellaneous Provisions					11
		7.1		Survival of Representations and Warranties			11
		7.2		Notices			11
		7.3		Entire Agreement; Third Party Beneficiaries; Amendment			12
		7.4		Counterparts			12
		7.5		Governing Law; Jurisdiction; Venue			12
		7.6		Expenses			12
		7.7		Successors and Assigns			13
		7.8		Severability			13
		7.9		Specific Performance			13
		7.10		Headings			13

 

i

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EXCHANGE AGREEMENT

EXCHANGE AGREEMENT, dated as of June 26, 2015 (this “Agreement”), by and among SERITAGE GROWTH PROPERTIES, a Maryland real estate investment trust (the “Company”), SERITAGE GROWTH PROPERTIES, L.P., a Delaware limited partnership of which the Company is the general partner (the “Operating Partnership”) and ESL Partners, L.P., a Delaware limited partnership, and Edward S. Lampert, a United States citizen (each a “Holder” and together, the “Holders”).

WHEREAS, Sears Holdings Corporation (“SHC”) has announced its intent to undertake a separation transaction whereby it will cause its Subsidiaries to sell to one or more Subsidiaries of the Company certain properties and/or one or more of its Subsidiaries owning certain properties and lease such properties back from the Company and/or such Subsidiaries, and, in connection therewith, the Company, through a pro rata distribution by SHC to holders of shares of its common stock, par value $0.01 per share (the “SHC Common Stock”) of rights (the “Rights”), each of which entitles the holder to purchase one half of one Class A common share of beneficial interest, par value $0.01 per share, of the Company (the “Shares”), will become a new publicly traded real estate investment trust (a “REIT”) under the Code (as defined herein) (the “Rights Offering”);

WHEREAS, pursuant to Section 856(d)(2)(B) of the Code, rents received or accrued, directly or indirectly, from any Person in which a REIT owns, directly or indirectly, 10% or more of the vote or value of shares of all classes of stock are excluded from the definition of “rents from real property” under Section 856(d) of the Code and therefore are not qualifying income for purposes of the gross income tests under Section 856(c)(2) and (3) of the Code (the “Related Party Tenant Rule”);

WHEREAS, Article VII of the Declaration of Trust of the Company (the “Company DOT”) contains restrictions on the ownership and transfer of stock of the Company, including provisions that prohibit any Person from owning stock of the Company if such ownership would cause any income of the Company to fail to qualify as “rents from real property” for purposes of Section 856(d) of the Code;

WHEREAS, absent a realignment of the interests of the Holders, if the Holders were to exercise all Rights received by the Holders pursuant to the Rights Offering, for purposes of the Related Party Tenant Rule, the Company would own, directly or indirectly, 10% or more of SHC, in part by virtue of the Beneficial Ownership by the Holders of 10% or more of both SHC and the Company;

WHEREAS, if, for purposes of the Related Party Tenant Rule, the Company were to own, directly or indirectly, 10% or more of SHC, the Company would not be expected to meet the gross income tests under Section 856(c)(2) and (3) of the Code, and therefore would not qualify to be taxed as a REIT; and

WHEREAS, in connection with the proposed separation transaction, and so that the Company may qualify to be taxed as a REIT, the Holders and the Company have agreed to

 

1

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exchange any and all Rights held by the Holders as of immediately prior to the closing of the Rights Offering the “Rights Offering Closing”) that would, if exercised, result in the Holders Beneficially Owning more than 3.2% of the aggregate value or number of all of the common shares of beneficial interest of the Company outstanding immediately following the Rights Offering Closing, calculated in accordance with Section 2.3 (such Rights, the “Excess Rights”), together with cash as provided herein, for units representing limited partnership interests in the Operating Partnership (the “Partnership Units”) and Class B common shares of beneficial interest, par value $0.01 per share (the “Class B Shares”) of the Company, subject to the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and covenants in this Agreement contained, the parties agree as follows:

1. Definitions. As used in this Agreement, the following terms shall have the following respective meanings:

“Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such Person; provided, that each of the Holders and their respective Affiliates (other than the Company, the Operating Partnership and SHC) shall not be deemed to be an Affiliate of the Company, the Operating Partnership or SHC, and vice versa.

“Beneficial Ownership” shall mean ownership of securities by a Person who would be treated as an owner of such securities within the meaning of Section 856(d)(2)(B) of the Code either directly, indirectly or constructively through the application of Section 318(a) of the Code, as modified by Section 856(d)(5) of the Code. The terms “Beneficial Owner,” “Beneficially Own,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative meanings.

“Business Day” means any day other than the days on which banks in New York, New York are required or authorized to remain closed.

“Code” means the Internal Revenue Code of 1986, as amended.

“Exchange Shares Purchase Price” means the product obtained by multiplying (a) the aggregate number of Exchange Shares to be received by the Holders in the Exchange by (b) $0.53.

“Exchange Units Purchase Price” means the product obtained by multiplying (a) the aggregate number of Excess Units to be received by the Holders in the Exchange by (b) $29.58.

“Exchange Rate” shall mean one (1) Partnership Unit per one (1) Share.

“Governmental Authority” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization.

 

2

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“Law” means applicable statutes, common law, rules, ordinances, regulations, codes, licensing requirements, orders, judgments, injunctions, writs, decrees, licenses, governmental guidelines or interpretations having the force of law, permits, rules and bylaws, in each case, of a Governmental Authority.

“Purchase Price” means amount in cash in U.S. dollars equal to the sum of (a) the Exchange Units Purchase Price and (b) the Exchange Shares Purchase Price.

“Person” means any individual, corporation, company, limited liability company, partnership, association, trust, joint venture, group or any other entity or organization, including any government or political subdivision or any agency or instrumentality thereof.

“Securities Act” shall mean the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.

“Subsidiary” means, with respect to any Person, any other Person of which the first Person owns, directly or indirectly, securities or other ownership interests having voting power to elect a majority of the board of directors or other persons performing similar functions (or, if there are no such voting interests, more than 50% of the equity interests of the second Person).

Index of Defined Terms

 

		Page								Page
Affiliate			2					Holder Shares			8
Agreement			1					Holders			1
Beneficial Ownership			2					Law			2
Business Day			2					Operating Partnership			1
Class B Shares			2					Partnership Agreement			5
Closing			5					Partnership Units			2
Code			2					Person			3
Company			1					Purchase Price			2
Enforceability Exceptions			6					REIT			1
Excess Rights			2					Rights Offering			1
Exchange			5					Rights Offering Closing			2
Exchange Interests			5					Securities Act			3
Exchange Rate			2					Shares			1
Exchange Shares			5					SHC			1
Exchange Shares Purchase Price			2					SHC Common Stock			1
Exchange Units			5					Subsidiary			3
Exchange Units Purchase Price			5					Transactions			6
Governmental Authority			2					Transfer			11

 

3

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2. Exchange.

2.1. Exchange. Subject to and upon the terms and conditions set forth in this Agreement, the Company, the Operating Partnership and the Holders hereby agree that at the Closing, all of the Holders’ Excess Rights that would otherwise be exercisable for Shares may be tendered to the Company together with the Purchase Price in exchange for the issuance and sale to the Holders of their pro rata portion of (a) Partnership Units (the “Exchange Units”) at the Exchange Rate and (b) such number of Class B Shares (the “Exchange Shares,” and together with the Exchange Units, the “Exchange Interests”) as are required for the Holders to hold, in the aggregate and taking into account all Shares to be held by the Holders, 9.8% of the voting power of the Company immediately following the Rights Offering Closing (collectively, the “Exchange”); provided, that notwithstanding the Holders’ exercise of the foregoing right, the Holders shall have the right to exercise its over-subscription privilege relating to its Excess Rights (as described in the Company’s Registration Statement on Form S-11) to the same extent as it would have if it were to exercise such Excess Rights for Shares, except that in lieu of Shares, the Holders shall receive additional Exchange Units at the Exchange Rate for each Share that would have been issuable pursuant to the exercise of such over-subscription privilege.

2.2. Exchange Closing. The closing of the Exchange (the “Closing”) shall occur immediately prior to the Rights Offering Closing. At the Closing, (a) the Holders shall (i) deliver to the Company all of the Excess Rights, free and clear of all liens, together with any necessary or appropriate instruments of transfer relating thereto, and (ii) pay, or cause to be paid, to Operating Partnership or its designee the Purchase Price, (b) each of the Holders and the Operating Partnership shall execute the amended and restated agreement of limited partnership of Operating Partnership (the “Partnership Agreement”) and (c) the Operating Partnership shall issue to the Holders free and clear of all liens, and deliver to the Holders evidence of book-entry notations representing the Exchange Interests (in each case, pro rata based on the number of Rights held by each Holders prior to the Exchange), together with a copy of the executed Partnership Agreement with a notation evidencing the Holders as the holders of the Exchange Units and a duly executed certificate evidencing the Exchange Shares; provided, however, that the delay or failure by any party to satisfy its obligations pursuant to this sentence shall not in any way delay or invalidate the automatic exchange effectuated pursuant to Section 2.1.

3. Representations and Warranties of the Company. The Company and the Operating Partnership hereby represent and warrant to the Holders, as of the date hereof and as of the Closing, as follows:

3.1. Existence and Power. The Company is a real estate investment trust duly organized, validly existing and in good standing under the laws of the State of Maryland and has all requisite trust power and authority to own, operate and lease its properties and to carry on its business as it is being conducted on the date of this Agreement. The Operating Partnership is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite partnership power and authority to own, operate and lease its properties and to carry on its business as it is being conducted on the date of this Agreement.

 

4

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3.2. Capitalization.

(a) The authorized shares of beneficial interest of the Company consist of 100,000,000 Shares, 50,000,000 Class B Shares, 50,000,000 Class C common shares of beneficial interest, par value $0.01 per share, and 50,000,000 preferred shares of beneficial interest. As of the date of this Agreement, no shares of beneficial interest of the Company are issued and outstanding.

(b) The number of Partnership Units that may be issued by the Operating Partnership is not limited by the Operating Partnership’s organizational documents. As of the date of this Agreement, no Partnership Units are issued and outstanding. The Company is the sole general partner of the Operating Partnership.

3.3. Authorization. The execution, delivery and performance of this Agreement (the “Transactions”) have been duly authorized by all necessary action on the part of the Company and on the part of the Operating Partnership, and this Agreement is a valid and binding obligation of each of the Company and the Operating Partnership, enforceable against each of them in accordance with its terms, subject to the limitation of such enforcement by (i) the effect of bankruptcy, insolvency, reorganization, receivership, conservatorship, arrangement, moratorium or other laws affecting or relating to creditors’ rights generally or (ii) the rules governing the availability of specific performance, injunctive relief or other equitable remedies and general principles of equity, regardless of whether considered in a proceeding in equity or at law (the “Enforceability Exceptions”).

3.4. Valid Issuance of Exchange Interests. The Exchange Units have been duly authorized by all necessary limited partnership action of the Operating Partnership. When issued and sold against receipt of the consideration therefor, the Exchange Units will be validly issued, fully paid and nonassessable. The Exchange Shares have been duly authorized by all necessary trust action of the Company. When issued and sold against receipt of the consideration therefor, the Exchange Shares will be validly issued, fully paid and nonassessable.

3.5. Non-Contravention; No Consents. The execution, delivery and performance of this Agreement, and the consummation by the Company and by the Operating Partnership of the Transactions, does not conflict with, violate or result in a breach of any provision of, or constitute a default under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, (i) the organizational documents of the Company or of the Operating Partnership, (ii) any mortgage, note, indenture, deed of trust, lease, loan agreement or other agreement binding upon the Company, the Operating Partnership or any of their respective Subsidiaries or (iii) any permit, license, judgment, order, decree, ruling, injunction, statute, law, ordinance, rule or regulation applicable to the Company, the Operating Partnership or any of their respective Subsidiaries, other than in the cases of clauses (ii) and (iii) as would not reasonably be expected

 

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to have a material adverse effect on the Company, the Operating Partnership and their respective Subsidiaries, taken as a whole. Assuming the accuracy of the representations of the Holders set forth herein, other than as have been obtained prior to the date of this Agreement, no material consent, approval, order or authorization of, or material registration, declaration or filing with, any Governmental Authority is required on the part of the Company, the Operating Partnership or any of their respective Subsidiaries in connection with the execution, delivery and performance by the Company and the Operating Partnership of this Agreement and the consummation by the Company and the Operating Partnership of the Transactions.

4. Representations and Warranties of the Holders. The Holders hereby represent and warrant to the Company and the Operating Partnership, as of the date hereof and as of the Closing, as follows:

4.1. Organization; Ownership. ESL Partners, L.P. is a Delaware limited partnership and is duly organized, validly existing and in good standing under the laws of Delaware and has all requisite power and authority to own, operate and lease its properties and to carry on its business as it is being conducted on the date of this Agreement.

4.2. Authorization. The Transactions have been duly authorized by all necessary corporate or equivalent action on the part of each Holder, and this Agreement is a valid and binding obligation of each Holder, enforceable against it in accordance with its terms, subject to the limitation of such enforcement by the Enforceability Exceptions.

4.3. Non-Contravention; No Consents. The execution, delivery and performance of this Agreement by the Holders, and the consummation by the Holders of the Transactions, does not conflict with, violate or result in a breach of any provision of, or constitute a default under, or result in the termination of or accelerate the performance required by, or result in a right of termination or acceleration under, (i) the organizational documents of any of the Holders, (ii) any mortgage, note, indenture, deed of trust, lease, loan agreement or other agreement binding upon any of the Holders or (iii) any permit, license, judgment, order, decree, ruling, injunction, statute, law, ordinance, rule or regulation applicable to the Holders or any of their respective Subsidiaries, other than in the cases of clauses (ii) and (iii) as would not reasonably be expected to adversely affect or delay the consummation of the Transactions by the Holders. Assuming the accuracy of the representations of the Company and the Operating Partnership set forth herein, other than as have been obtained prior to the date of this Agreement, no material consent, approval, order or authorization of, or material registration, declaration or filing with, any Governmental Authority is required on the part of the Holders or any of their respective Subsidiaries in connection with the execution, delivery and performance by the Holders of this Agreement and the consummation by the Holders of the Transactions.

4.4. SHC Securities and Rights.

(a) As of the record date for the Rights Offering, the Holders owned of record, and, to the Holders’ knowledge, the Holders Beneficially Owned, (a) shares of SHC

 

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Common Stock as set forth on Exhibit A (the “Holder Shares”) and (b) no other (i) voting securities, or securities of SHC or any of its Subsidiaries convertible into or exchangeable for shares of capital stock or voting securities, of SHC, (ii) options or other rights to acquire from SHC any shares of capital stock, voting securities or securities convertible into or exchangeable for shares of capital stock or voting securities of SHC or (iii) equity equivalent interests in the ownership or earnings of SHC, other than as set forth on Exhibit A.

(b) A Holder owns and has valid title to each of the Holder Shares, free and clear of any and all liens. Other than this Agreement, no Holder is party to any option, warrant, purchase right or other contract or commitment obligating it to sell, transfer, pledge or otherwise dispose of the Holder Shares or to any voting trust, proxy or other agreement or understanding with respect to the voting of the Holder Shares.

(c) As of the Closing, a Holder owns and has valid title to each of the Excess Rights, free and clear of any and all liens. As of the Closing, other than this Agreement, no Holder is party to any option, warrant, purchase right or other contract or commitment obligating it to sell, transfer, pledge or otherwise dispose of the Excess Rights or to any voting trust, proxy or other agreement or understanding with respect to the voting of the Excess Rights.

4.5. Securities Act Representations. Each Holder is an accredited investor (as defined in Rule 501 of the Securities Act) and is aware that the issuance and exchange of Exchange Interests is being made in reliance on a private placement exemption from registration under the Securities Act. Each Holder is acquiring the Exchange Interests for its own account, and not with a view toward, or for sale in connection with, any distribution thereof in violation of any federal or state securities or “blue sky” law, or with any present intention of distributing or selling such Exchange Interests in violation of the Securities Act. Each Holder has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of its investment in such Exchange Interests and is capable of bearing the economic risks of such investment. Each Holder has been provided a reasonable opportunity to undertake and has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement.

4.6. Brokers and Finders. None of the Holders nor any of their respective officers, directors, employees or agents has utilized any broker, finder, placement agent or financial advisor or incurred any liability for any brokers’, finders’ or similar fees or commissions in connection with any of the Transactions which are or may become payable by the Company or any of its Subsidiaries.

4.7. No Additional Representations.

(a) The Holders acknowledge that neither the Company nor the Operating Partnership makes any representation or warranty as to any matter whatsoever except as expressly set forth in Section 3, and specifically (but without limiting the generality of the foregoing), that neither the Company nor the Operating Partnership makes any representation or

 

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warranty with respect to (i) any projections, estimates or budgets delivered or made available to the Holders (or any of their Affiliates or their respective, officers, trustees or employees) of future revenues, results of operations (or any component thereof), cash flows or financial condition (or any component thereof) of the Company and its Subsidiaries or (ii) the future business and operations of the Company and its Subsidiaries, and none of the Holders relied on such information or any other representations or warranties not set forth in Section 3.

(b) Each Holder has conducted its own independent review and analysis of the business, operations, assets, liabilities, results of operations, financial condition and prospects of the Company and its Subsidiaries and acknowledges that each Holder has been provided sufficient access for such purposes. Except for the representations and warranties expressly set forth in Section 3 by the Company and the Operating Partnership in accordance with the terms hereof, in entering into this Agreement, each Holder has relied solely upon its independent investigation and analysis of the Company and its Subsidiaries, and each Holder acknowledges and agrees that it has not been induced by and has not relied upon any representations, warranties or statements, whether express or implied, made by the Company, its Subsidiaries or any of their respective affiliates, shareholders, controlling persons or representatives that are not expressly set forth in Section 3, whether or not such representations, warranties or statements were made in writing or orally. Each Holder acknowledges and agrees that, except for the representations and warranties expressly set forth in Section 3, (i) the Company or the Operating Partnership does not make, or has not made, any representations or warranties relating to itself or its business or otherwise in connection with the Transactions and no Holder is relying on any representation or warranty except for those expressly set forth in this Agreement, (ii) no person has been authorized by the Company or the Operating Partnership to make any representation or warranty relating to either of them or their respective businesses or otherwise in connection with the Transactions, and if made, such representation or warranty must not be relied upon by the Holders as having been authorized by the Company or the Operating Partnership, and (iii) any estimates, projections, predictions, data, financial information, memoranda, presentations or any other materials or information provided or addressed to the Holders or any of their respective Affiliates or representatives are not and shall not be deemed to be or include representations or warranties of the Company or the Operating Partnership unless any such materials or information is the subject of any express representation or warranty set forth in Section 3 of this Agreement.

5. Covenants.

5.1. Taking of Necessary Action. Each of the parties hereto agrees to use its reasonable best efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the Transactions. In case at any time before or after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall, at such party’s expense, take all such necessary action as may be reasonably requested by another party to this Agreement.

 

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5.2. Securities Laws; Legends.

(a) Each Holder acknowledges and agrees that as of the Closing the Exchange Interests will not have been registered under the Securities Act or the securities laws of any state and that they may be sold or otherwise disposed of only in one or more transactions registered under the Securities Act and, where applicable, such laws, or as to which an exemption from the registration requirements of the Securities Act and, where applicable, such laws, is available. Each Holder acknowledges that it has no right to require the Company or the Operating Partnership to register the Exchange Interests. Each Holder further acknowledges and agrees that any certificate for the Exchange Units shall bear a legend substantially as set forth in paragraph (b) of this Section 5.2 (and any Exchange Units evidenced in book entry form shall contain appropriate comparable notation and reflect related stop transfer instructions) and any certificate for the Exchange Shares shall bear a legend substantially as set forth in paragraph (c) of this Section 5.2 (and any Exchange Shares evidenced in book entry form shall contain appropriate comparable notation and reflect related stop transfer instructions).

(b) Any certificates for the Exchange Units shall bear legends in substantially the following form:

THE COMMON UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT AS OF [●], 2015 AS IT MAY BE AMENDED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE COMMON UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR (B) IF THE PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER.

(c) Any certificates for the Exchange Shares shall bear legends in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO A REGISTRATION IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

 

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(d) When issued pursuant hereto, any certificates evidencing the Exchange Interests shall also bear any legend required by any applicable state blue sky law.

(e) Any holder of Exchange Units may request the Operating Partnership, and any holder of Exchange Shares may request the Company, to remove any or all of the legends described in this Section 5.2 from the certificates evidencing such Exchange Units or Exchange Shares, as applicable, by submitting to the Operating Partnership or the Company, as applicable, such certificates, together with an opinion of counsel reasonably satisfactory to the Operating Partnership or the Company, as applicable, to the effect that such legend or legends are no longer required under the Securities Act or applicable state laws, as the case may be.

5.3. Proportional Surrender. Each Holder hereby agrees that from and after the Closing, upon any sale, transfer or other disposition (a “Transfer”) of one or more Exchange Units to any Person other than an Affiliate of the Holders, it shall surrender to the Company as promptly as practicable a number of Class B Shares equal to the product obtained by multiplying (a) the number of Class B Shares then held by such Holder by (b) the quotient obtained by dividing (i) the number of Exchange Units subject to such Transfer by such Holder by (ii) the number of Exchange Units held by such Holder immediately prior to such Transfer, rounded down to the nearest whole number; provided, that upon any Transfer of one or more Exchange Units to any Affiliate of the Holders, the foregoing surrender obligation shall be assumed by such Affiliate and shall apply in the event of any Transfer by such Affiliate to any Person other than Affiliate of the Holders.

6. Termination.

6.1. Conditions of Termination. Notwithstanding anything to the contrary contained in this Agreement, this Agreement:

(a) may be terminated at any time:

(i) by mutual consent of SHC, the Company and the Holders;

(ii) by either the Company, on the one hand, or the Holders, on the other hand, if any temporary restraining order, preliminary or permanent injunction or other judgment or order issued by any court of competent jurisdiction or other Law prohibiting, restraining or rendering illegal the consummation of the Transactions shall be in effect and shall have become final and nonappealable; or

(b) shall be terminated automatically if at any time SHC publicly announces that it has determined to cancel the Rights Offering.

6.2. Effect of Termination. In the event of any termination pursuant to Section 6.1, this Agreement shall become null and void and have no effect, with no continuing obligation or liability on the part of the Company, the

 

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Operating Partnership or the Holders, or their respective directors, officers, agents or stockholders, with respect to this Agreement, provided that nothing herein shall relieve any party of any liability for its willful breach.

7. Miscellaneous Provisions.

7.1. Survival of Representations and Warranties. All covenants and agreements contained herein, other than those which by their terms apply in whole or in part after the Closing, shall terminate as of the Closing. The representations and warranties contained in Section 3 and Section 4 shall survive the Closing until the expiration of the applicable statute of limitations.

7.2. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given, if delivered personally, by facsimile, by email or sent by overnight courier as follows:

If to the Holders, to:

c/o ESL Investment, Inc.

1170 Kane Concourse, Suite 200

Bay Harbor Islands, Florida 33154

Attention: Harold Talisman

Fax: 305-864-1370

Email: harold@eslinvest.com

If to the Company and/or the Operating Partnership, to:

Seritage Growth Properties

c/o Sears Holdings Corporation

3333 Beverly Road

Hoffman Estates, Illinois 60179

Attention: General Counsel

Email: mfernand@seritage.com

With a copy (which shall not constitute notice) to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, NY 10019

 

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Attention: Robin Panovka

Fax: (212) 403-2000

Email: RPanovka@wlrk.com

or to such other address or addresses as shall be designated in writing. All notices shall be effective when received.

7.3. Entire Agreement; Third Party Beneficiaries; Amendment. This Agreement, together with the Partnership Agreement (when executed), sets forth the entire agreement between the parties hereto with respect to the Transactions and is not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder. Any provision of this Agreement may be amended or modified in whole or in part at any time by an agreement in writing between the parties hereto executed in the same manner as this Agreement. No failure on the part of any party to exercise, and no delay in exercising, any right shall operate as a waiver thereof nor shall any single or partial exercise by any party of any right preclude any other or future exercise thereof or the exercise of any other right.

7.4. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to constitute any original, but all of which together shall constitute one and the same documents. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document will have the same effect as physical delivery of the paper document bearing the original signature.

7.5. Governing Law; Jurisdiction; Venue. This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter may have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding brought in any court referred to in this Section 7.5 and such parties agree not to plead or claim the same. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY

7.6. Expenses. Except as otherwise expressly provided herein, each party hereto shall bear its own costs and expenses (including attorneys’ fees) incurred in connection with this Agreement and the Transactions.

 

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7.7. Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, each of the Company’s, the Operating Partnership’s and the Holders’ respective successors and assigns, and no other person.

7.8. Severability. If any provision of this Agreement is determined to be invalid, illegal, or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect provided that the economic and legal substance of, any of the Transactions is not affected in any manner materially adverse to any party. In the event of any such determination, the parties agree to negotiate in good faith to modify this Agreement to fulfill as closely as possible the original intent and purpose hereof. To the extent permitted by law, the parties hereby to the same extent waive any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

7.9. Specific Performance. The parties agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the parties will be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity.

7.10. Headings. The headings of Articles and Sections contained in this Agreement are for reference purposes only and are not part of this Agreement.

*    *    *    *    *    *

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

 

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EXHIBIT A

SHC COMMON STOCK

 

HOLDER ENTITY		NUMBER OF SHARES BENEFICIALLY OWNED AS OF JUNE 11, 2015
ESL Partners, L.P.		58,068,117 (1)(2)
Edward S. Lampert		61,516,000 (1)(4)

(1) This number includes 25,547,095 shares of SHC Common Stock held by Edward S. Lampert and 5,700,163 shares of SHC Common Stock that Mr. Lampert has the right to acquire within 60 days pursuant to warrants held by Mr. Lampert. ESL Partners, L.P. (“Partners”) has entered into a Lock-Up Agreement with Mr. Lampert that restricts the purchase and sale of securities owned by Mr. Lampert. Pursuant to the Lock-Up Agreement, Partners may be deemed to have shared dispositive power over, and to indirectly beneficially own, securities owned by Mr. Lampert. Mr. Lampert may also be deemed to have shared dispositive power over, and to indirectly beneficially own, such securities.

(2) This number includes 21,992,640 shares of SHC Common Stock held by Partners and 4,828,219 shares of SHC Common Stock that Partners has the right to acquire within 60 days pursuant to warrants held by Partners.

(3) This number includes 21,992,640 shares of SHC Common Stock held by Partners, 4,828,219 shares of SHC Common Stock that Partners has the right to acquire within 60 days pursuant to warrants held by Partners, 1,939,872 shares of SHC Common Stock held by SPE I Partners, LP, a Delaware limited partnership, 2,494,783 shares of SHC Common Stock held by SPE Master I, LP, a Delaware limited partnership, 10,230 shares of SHC Common Stock held by ESL Institutional Partners, L.P., a Delaware limited partnership (“Institutional”), 2,111 shares of SHC Common Stock that Institutional has the right to acquire within 60 days pursuant to warrants held by ESL Institutional Partners, L.P., a Delaware limited partnership, 747 shares of SHC Common Stock held by CRK LLC, a Delaware limited liability company (“CRK LLC”) and 140 shares of SHC Common Stock that CRK LLC has the right to acquire within 60 days pursuant to warrants held by CRK LLC. Mr. Lampert is the Chairman, Chief Executive Officer and Director of, and may be deemed to indirectly beneficially own securities owned by, ESL Investments, Inc., a Delaware corporation.

 

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