Sears 2014 Annual Report Download - page 113

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
113
of the pledged collateral. The maturity date of the Loan was extended until the earlier of June 1, 2015, or the receipt
by the Company of the sale proceeds pursuant to the potential REIT transaction. At any time prior to maturity of the
Loan, Borrowers may make a one-time election to re-borrow up to $200 million from the Lender (the "Delayed
Advance"), subject to certain conditions, including payment to the Lender of a fee equal to 0.25% of the principal
amount of the Delayed Advance. In the event the Company elects to re-borrow the Delayed Advance, Borrowers
would again grant a lien on the released properties to secure the Loan. See Note 3 for additional information
regarding the Loan.
Senior Secured Notes and Subsidiary Notes
At January 31, 2015 and February 1, 2014, Mr. Lampert and ESL held an aggregate of $205 million and $95
million, respectively, of principal amount of the Company's 6 5/8% Senior Secured Notes due 2018. At both
January 31, 2015 and February 1, 2014, Mr. Lampert and ESL held an aggregate of $3 million of principal amount
of unsecured notes issued by SRAC (the "Subsidiary Notes").
Senior Unsecured Notes and Warrants
At January 31, 2015, Mr. Lampert and ESL held an aggregate of $299 million of principal amount of the
Company's Senior Unsecured Notes, and 10,530,633 warrants to purchase shares of Holdings common stock.
Trade Receivable Put Agreements
On January 26, 2012, ESL entered into an agreement with a financial institution to acquire from the financial
institution an undivided participating interest in a certain percentage of its rights and obligations under trade
receivable put agreements that were entered into with certain vendors of the Company. These agreements generally
provide that, in the event of a bankruptcy filing by the Company, the financial institution will purchase such
vendors’ accounts receivable arising from the sale of goods or services to the Company. ESL may from time to time
choose to purchase an 80% undivided participating interest in the rights and obligations primarily arising under
future trade receivable put agreements that the financial institution enters into with our vendors during the term of its
agreement. The Company is not a party to any of these agreements. At January 31, 2015, ESL held no participating
interest. At February 1, 2014, ESL held a participating interest totaling $80 million in the financial institution’s
agreements relating to the Company.
Sears Canada
ESL owns approximately 50% of the outstanding common shares of Sears Canada (based on publicly available
information as of November 13, 2014).
Lands' End
ESL owns approximately 49% of the outstanding common stock of Lands' End (based on publicly available
information as of April 4, 2014). Holdings and certain of its subsidiaries entered into a transition services agreement
in connection with the spin-off pursuant to which Lands' End and Holdings will provide to each other, on an interim,
transitional basis, various services, which may include, but are not limited to, tax services, logistics services,
auditing and compliance services, inventory management services, information technology services and continued
participation in certain contracts shared with Holdings and its subsidiaries, as well as agreements related to Lands'
End Shops at Sears and participation in the Shop Your Way® program.
Amounts due to or from Lands’ End are non-interest bearing, and generally settled on a net basis. Holdings
invoices Lands' End on at least a monthly basis. At January 31, 2015, Holdings reported a net amount receivable
from Lands' End of $5 million in the Accounts receivable line of the Consolidated Balance Sheet. Amounts related
to revenue from retail services and rent for Lands' End Shops at Sears, participation in the Shop Your Way® program
and corporate shared services were $63 million during 2014. The amounts Lands' End earned related to call center
services and commissions were $9 million during 2014.