Item 1.01 Entry into a Material Definitive Agreement.
On September 30, 2022, Warby Parker Inc. (the “Company”),
a Delaware public benefit corporation, and Warby Parker Retail, Inc., a Delaware corporation and wholly-owned subsidiary of the Company
(together, the “Borrowers”), entered into a Credit Agreement (the “Credit Agreement”) with the lenders from time
to time party thereto and Comerica Bank, as Administrative Agent (the “Agent”), Sole Lead Arranger and Sole Bookrunner.
The
Credit Agreement provides for a revolving credit facility with borrowing capacity up to $100,000,000 at any time outstanding. The Credit
Agreement also contains an uncommitted accordion feature pursuant to which the Borrowers can expand their borrowing capacity by $75,000,000
for maximum borrowings of $175,000,000, subject to certain conditions. The Credit Agreement matures on September 30, 2027 (the “Maturity
Date”), and the Borrowers may borrow, repay and reborrow amounts under the revolving credit
facility until the Maturity Date. At closing, approximately $4.1 million was drawn under the Credit Agreement in the form
of letters of credit.
Proceeds of the borrowings under the Credit Agreement are intended
to be used for working capital and other general corporate purposes in the ordinary course of business. Borrowings under the Credit Agreement
are secured and will bear interest at a rate equal to, at the Borrowers’ option, either (a) a base rate determined by reference
to the highest of (i) the federal funds rate plus 1.00% per annum, (ii) the rate last announced by the Agent as its prime rate
and (iii) the Bloomberg Short-Term Bank Yield Index rate (“BSBY Rate”) for a one month tenor on such date plus 1.00%
per annum, in each case, plus an applicable margin of 0.50-0.80% per annum; or (b) the BSBY Rate for the applicable interest period
plus an applicable margin of 1.50-1.80% per annum. The applicable margin shall be determined based on the Borrowers’ consolidated
senior net leverage ratio, and in no event shall the applicable interest rate be lower than the floor specified in the Credit Agreement.
In addition, the Credit Agreement requires the Borrowers to pay a facility fee of 0.15% per annum in respect of the aggregate commitments
under the Credit Agreement.
The obligations of the Borrowers under the Credit Agreement are secured
by first-lien security interests in substantially all of the assets of the Borrowers. In addition, the obligations are required to be
guaranteed in the future by certain additional domestic subsidiaries of the Company.
The Credit Agreement contains
a financial maintenance covenant, which only takes effect at such time that the Borrowers first borrow $60 million or more under
the credit facility. Beginning at such time that the Borrowers first borrow $60 million or more, and at all times thereafter, the Borrowers
will be required to maintain a maximum consolidated senior net leverage ratio of 3.00:1.00, which will be tested on the last day of each
fiscal quarter.
In addition, the Credit Agreement
contains customary affirmative and negative covenants for a transaction of this type, including covenants that limit indebtedness, liens,
capital expenditures, asset sales, investments and restricted payments, in each case subject to negotiated exceptions and baskets. The
Credit Agreement also contains representations, warranties and event of default provisions customary for a transaction of this type.
The foregoing is a summary description of certain terms of the Credit
Agreement and does not purport to be complete, and it is subject to and qualified in its entirety by reference to the full text of the
Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.