Entry into a Material Definitive Agreement.
On March 31, 2021, Barnes & Noble Education, Inc.
(the “Company”) entered into a Third Amendment and Waiver to Credit
Agreement and First Amendment to Security Agreement (the
“Amendment”) to the Credit Agreement, dated as of August 3,
2015 (as amended prior to the Amendment, the “Credit Agreement”),
among the Company, as the lead borrower, the other borrowers party
thereto, the lenders party thereto and Bank of America, N.A., as
administrative agent and collateral agent for the lenders.
The Amendment waives the FILO availability test condition to
borrowing of the FILO loan under the credit agreement on
April 1, 2021. The Amendment also (i) increases the
interest rate from the existing rate in the Credit Agreement by 25
basis points at each level of the existing pricing grid,
(ii) institutes a minimum availability financial covenant at
all times while the FILO Loan is outstanding of no less than the
greater of 10% of the aggregate loan cap (which is the lesser of
(a) the aggregate revolver commitment plus the aggregate FILO
commitment under the Credit Agreement and (b) the borrowing
base plus the outstanding FILO loan) and $25 million,
(iii) institutes an anti-cash hoarding provision while the
FILO loan is outstanding, which requires the Company to pay down
the revolver to the extent cash is in excess of $50 million,
subject to certain exclusions, (iv) expands the security
interest granted to the lenders party to the Credit Agreement to
all assets from the previous current asset collateral package,
(v) prohibits acquisitions and payment of dividends while the
FILO loan is outstanding and (vi) certain other changes set
forth in the Amendment.
The foregoing description is qualified in its entirety by reference
to the Amendment, a copy of which is attached as Exhibit 10.1 and
incorporated by reference in its entirety in this Item 1.01.
Creation of a Direct Financial Obligation or an Obligation under an
Arrangement of a Registrant.
The information set forth above under Item 1.01 is incorporated by
Regulation FD Disclosure.
As previously disclosed, in December 2020, the Company entered into
a new merchandising partnership with Fanatics Retail Group
Fulfillment, LLC, Inc. (“Fanatics”) and Fanatics Lids College, Inc.
(“FLC”). The Company will leverage Fanatics’ e-commerce
technology and expertise for the operational management of the
emblematic merchandise and gift sections of our campus store
websites. FLC will manage in-store assortment planning and
merchandising of emblematic apparel, headwear, and gift products
for our partner campus stores.
On April 4, 2021, as contemplated by the partnership, FLC closed on
the purchase of the Company’s logo and emblematic general
merchandise inventory. The purchase price represents an estimate of
the cost of the Company’s inventory being purchased and is subject
to adjustment as inventory positions are reconciled. The final
purchase price for the Company’s logo and emblematic general
merchandise inventory will be disclosed in the Company’s Annual
Report on Form 10-K, to be filed on or around July 1, 2021.
The information in this Item 7.01 shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, except as
shall be expressly set forth by specific reference in such
This Form 8-K contains certain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
and information relating to us and our business that are based on
the beliefs of our management as well as assumptions made by and
information currently available to our management. When used in
this communication, the words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “will,” “forecasts,” “projections,” and
similar expressions, as they relate to us or our management,
identify forward-looking statements. Moreover, we operate in a very
competitive and rapidly changing environment. New risks emerge from
time to time. It is not possible for our management to predict all
risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statements we may make. In light of these
risks, uncertainties and assumptions, the future events and trends
discussed in this Form 8-K may not occur and actual results could
differ materially and adversely from those anticipated or implied
in the forward-looking statements.
Such statements reflect our current views with respect to future
events, the outcome of which is subject to certain risks, including
our ability to successfully execute the merchandising partnership,
as well as those detailed in the Company’s Form 10-K, Form 10-Q and
Form 8-K reports and exhibits to those reports.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described as anticipated,
believed, estimated, expected, intended or planned. Subsequent
written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements in this paragraph. We
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise after the date of this Form 8-K.
Financial Statements and Exhibits
Amendment and Waiver to Credit Agreement and First Amendment to
Security Agreement, dated as of March 31, 2021, among
Barnes & Noble Education, Inc., as the lead borrower, the
other borrowers party thereto, the lenders party thereto and Bank
of America, N.A., as administrative agent and collateral agent for
the lenders, to the Credit Agreement, dated as of August 3,
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