Exhibit 10.1

 

WAIVER AGREEMENT

This Waiver (this “Waiver”) dated as of December 5, 2006, is made by and among
BARNES & NOBLE, INC., a Delaware corporation (“B&N” and a “Borrower”), CERTAIN
SUBSIDIARIES OF B&N, as Designated Co-Borrowers (each a “Borrower”, and
collectively with B&N, the “Borrowers”), BANK OF AMERICA, N.A., a national
banking association organized and existing under the laws of the United States
(“Bank of America”), in its capacity as administrative agent for the Lenders (as
defined in the Credit Agreement described below) (in such capacity, the
“Administrative Agent”), the Lenders under such Credit Agreement (collectively,
the “Lenders”) and each of the Guarantors (as defined in the Credit Agreement)
signatory hereto.

W I T N E S S E T H:

WHEREAS, the Borrowers, the Administrative Agent, Bank of America, as Swing Line
Lender and L/C Issuer, JPMorgan Chase Bank, N.A., as Syndication Agent, Citicorp
USA, Inc., ING Capital LLC, SunTrust Bank, and Wachovia Bank, National
Association, as Documentation Agents, and the Lenders have entered into that
certain Credit Agreement dated as of June 17, 2005 (as amended prior to the date
hereof and as the same may hereafter be amended or modified in accordance with
the terms thereof, the “Credit Agreement”; capitalized terms used in this Waiver
not otherwise defined herein shall have the respective meanings given thereto in
the Credit Agreement), pursuant to which the Lenders have made available to the
Borrowers a revolving credit facility with letter of credit and swing line
subfacilities; and

WHEREAS, each of the Guarantors has entered into the Subsidiary Guaranty
Agreement pursuant to which it has guaranteed the payment and performance of the
obligations of the Borrowers under the Credit Agreement and the other Loan
Documents; and

WHEREAS, B&N has advised the Administrative Agent and the Lenders that, in
connection with and as a result of the current status of various investigations
into certain options granting practices, all as more particularly described in
the filings of B&N with the SEC (as so described, the “Options Inquiry”), B&N
will not make a timely filing of its quarterly report required to be filed with
the SEC on Form 10-Q for the fiscal period ending October 28, 2006, and will be
unable to deliver the certificate of a Responsible Officer as to the interim
unaudited financial statements for such period as required by Section 6.01(b) of
the Credit Agreement; and

WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders waive for the period specified below certain certification requirements
and potential defaults relating to the continuation of the Options Inquiry;

NOW, THEREFORE, in consideration of the premises and further valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

1.

Waiver and Agreement. Subject to the terms and conditions hereof, by the
execution of this Waiver, the Administrative Agent and the Lenders hereby waive
during the Waiver Period (as defined below) the following covenants, conditions
and actual or potential

 

 

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Events of Default under the Credit Agreement and the Subsidiary Guaranty
Agreement (collectively, the “Waived Items”):

(a)          with respect to the delivery of the unaudited consolidated
financial statements of B&N and its Subsidiaries as at and for the period ended
October 28, 2006 and the related certifications as required by Sections 6.01(b)
and 6.02(b) with respect thereto, the required certification by a Responsible
Officer is waived solely to the extent so as to permit such certification to be
qualified, as to the information contained on the consolidated balance sheet and
consolidated statement of shareholders’ equity, for potential adjustments
thereto arising solely from the results of the Options Inquiry; and

(b)          the provisions of Section 4.02(a) relating to financial statements
referred to (or deemed by such Section 4.02(a) to be referred to) in Section
5.05, and the provisions of Section 4.02(b) insofar as they relate to any
representation, warranty, report or certification as to financial statements
referred to in Sections 5.05 or 6.01, are waived solely with respect to Credit
Extensions occurring between the date hereof and the 10-K Certification Date (as
defined below) and solely to the extent so as to permit such conditions to
Credit Extensions to be satisfied notwithstanding potential adjustments, arising
solely from the results of the Options Inquiry, to the consolidated balance
sheet and consolidated statement of shareholders’ equity included in such
financial statements or in the financial statements referred to in any such
representation, warranty, report or certification;

provided, in each case, that immediately upon the expiration or termination of
the Waiver Period, the Waived Items shall be and become, without any further
action or notice whatsoever, immediately reinstated and in full force and
effect, and the Administrative Agent and the Lenders shall have all the rights,
powers and privileges to take such action as they may be permitted to take under
the Credit Agreement and the Subsidiary Guaranty Agreement or otherwise at law
or in equity to the same extent as if the waivers herein provided had never been
in effect unless (i) prior to such expiration or termination B&N has (x)
delivered to the Administrative Agent and the Lenders such financial statements,
auditors’ reports, opinions and certifications, and other certificates and
information with respect to its fiscal year ending February 3, 2007 as are
required by (and in full compliance with) Sections 6.01 and 6.02 of the Credit
Agreement, (y) filed its annual report on Form 10-K for its fiscal year ending
February 3, 2007 with the SEC on or by the date such filing is due, and (z)
otherwise complied with the undertakings in this Waiver, and (ii) no other Event
of Default exists, in which case the Waived Items shall be deemed to have been
cured.

For purposes hereof, “Waiver Period” means the period commencing as of the date
hereof (provided that the conditions to the effectiveness of this Waiver set
forth below shall have been satisfied) to the earliest to occur of (i) the date
that is 15 days after the date (without giving effect to any extension thereof)
upon which B&N is required to file with the SEC its annual report on Form 10-K
for its fiscal year ending February 3, 2007 (the “10-K Certification Date”),
(ii) any announcement by B&N that it will not file its annual report on Form
10-K for its fiscal year ending February 3, 2007 on or by the 10-K

 

 

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Certification Date, (iii) any breach by B&N of any undertaking on its part
contained in this Waiver, and (iv) the occurrence of any other Event of Default.

2.            Notice of the Delivery of Reports. Promptly (and in any event
within five (5) Business Days) provide the Administrative Agent with notice of
the delivery (whether written or oral) of the final findings or report of the
Special Committee of the Board of Directors conducting the internal Options
Inquiry to any of (a) B&N’s Board of Directors or any committee thereof, (b) any
Governmental Authority, or (c) to the extent not delivered subject to
attorney-client privilege, any other Person.

3.            Effectiveness; Conditions Precedent. The effectiveness of this
Waiver is subject to the satisfaction of the following conditions precedent:

(a)           the Administrative Agent shall have received counterparts of this
Waiver, duly executed by each Borrower, each Guarantor and the Required Lenders;
and

(b)          all fees and expenses payable to the Administrative Agent and the
Lenders (including the fees and expenses of counsel to the Administrative Agent
estimated to date) shall have been paid in full (without prejudice to final
settling of accounts for such fees and expenses).

4.            Consent of the Guarantors. Each Guarantor hereby consents,
acknowledges and agrees to the terms hereof and hereby confirms and ratifies in
all respects the Subsidiary Guaranty Agreement (including without limitation the
continuation of such Guarantor’s payment and performance obligations thereunder
upon and after the effectiveness of this Waiver and the amendments contemplated
hereby) and the enforceability of the Subsidiary Guaranty Agreement against such
Guarantor in accordance with its terms.

5.            Representations and Warranties. In order to induce the
Administrative Agent and the Lenders to enter into this Waiver, each Borrower
represents and warrants to the Administrative Agent and the Lenders as follows:

(a)           the Persons appearing as Guarantors on the signature pages to this
Waiver constitute all Persons who are required to be Guarantors pursuant to the
terms of the Credit Agreement and the other Loan Documents, including without
limitation all Persons who became Subsidiaries or were otherwise required to
become Guarantors after the Closing Date, and each of such Persons has become
and remains a party to the Subsidiary Guaranty Agreement as a Guarantor; and

(b)          this Waiver has been duly authorized, executed and delivered by
each Borrower and each Guarantor and constitutes a legal, valid and binding
obligation of each such party, except as may be limited by general principles of
equity or by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors’ rights generally.

 

 

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6.            Entire Agreement. This Waiver, together with the other Loan
Documents (collectively, the “Relevant Documents”), sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relating to such subject matter. No promise, condition, representation
or warranty, express or implied, not set forth in the Relevant Documents shall
bind any party hereto, and no such party has relied on any such promise,
condition, representation or warranty. Each of the parties hereto acknowledges
that, except as otherwise expressly stated in the Relevant Documents, no
representations, warranties or commitments, express or implied, have been made
by any party to the other in relation to the subject matter hereof or thereof.
None of the terms or conditions of this Waiver may be changed, modified, waived
or canceled orally or otherwise, except in writing and in accordance with
Section 10.01 of the Credit Agreement.

7.            Full Force and Effect of Agreement. Except as hereby specifically
waived, amended, modified or supplemented, the Credit Agreement and all other
Loan Documents are hereby confirmed and ratified in all respects and shall be
and remain in full force and effect according to their respective terms.

8.            Counterparts. This Waiver may be executed in any number of
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument. Delivery of an executed counterpart of a signature page
of this Waiver by telecopy shall be effective as a manually executed counterpart
of this Waiver.

9.            Governing Law. This Waiver shall in all respects be governed by,
and construed in accordance with, the laws of the State of New York applicable
to contracts executed and to be performed entirely within such State, and shall
be further subject to the provisions of Sections 10.14 and 10.15 of the Credit
Agreement.

10.         Enforceability. Should any one or more of the provisions of this
Waiver be determined to be illegal or unenforceable as to one or more of the
parties hereto, all other provisions nevertheless shall remain effective and
binding on the parties hereto.

11.         References. All references in any of the Loan Documents to the
“Credit Agreement” shall mean the Credit Agreement, as modified hereby.

12.         Successors and Assigns. This Waiver shall be binding upon and inure
to the benefit of each Borrower, the Administrative Agent and each of the
Guarantors and Lenders, and their respective successors, legal representatives,
and assignees to the extent such assignees are permitted assignees as provided
in Section 10.06 of the Credit Agreement.

 

[Signature pages follow]

 

 

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BORROWERS:

BARNES & NOBLE, INC.

BARNES & NOBLE BOOKSELLERS, INC.

BARNESANDNOBLE.COM LLC

B. DALTON BOOKSELLER, LLC

BARNES & NOBLE PUBLISHING, INC.

STERLING PUBLISHING CO., INC.

BARNES & NOBLE BOOKSELLERS

 

(TEXAS), L.P.

BARNES & NOBLE PURCHASING, INC.

 

By:  /s/ Maria B. Florez 

 

Name:

Maria B. Florez

 

Title:

Vice President & Treasurer

 

 

Signature Page

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GUARANTORS:

 

DOUBLEDAY BOOK SHOPS, INC.

CCI HOLDINGS, INC.

B&N GENERAL PARTNER (TEXAS) CORP.

B&N LIMITED PARTNER (TEXAS) CORP.

BARNESANDNOBLE.COM INC.

BARNES & NOBLE BOOKQUEST LLC

MARKETING SERVICES (MINNESOTA)

 

CORP.

BARNES & NOBLE SERVICES, INC.

By:  /s/ Maria B. Florez 

 

Name:

Maria B. Florez

 

Title:

Vice President & Treasurer

 

Signature Page

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ADMINISTRATIVE AGENT:

 

BANK OF AMERICA, N.A., as Administrative Agent

 

 

By:

/s/ Don B. Pinzon

 

Name:

Don B. Pinzon

 

Title:

Vice President

 

 

 

Signature Page

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LENDERS:

 

 

BANK OF AMERICA, N.A., as a Lender, L/C

 

Issuer and Swing Line Lender

 

 

 

By:

/s/ Ross Evans

 

Name:

Ross Evans

 

Title:

Vice President

 

Signature Page

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JPMORGAN CHASE BANK, N.A.

 

By:    /s/ Susan H. Atha 

 

Name:

Susan H. Atha

 

Title:

Vice President

 

Signature Page

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CITICORP USA, INC.

 

By:    /s/ John McQuiston 

 

Name:

John McQuiston

 

Title:

Vice President & Director

 

Signature Page

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ING CAPITAL LLC

 

By:    /s/ Bill Redmond 

 

Name:

Bill Redmond

 

Title:

Managing Director

 

Signature Page

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SUNTRUST BANK

 

By:    /s/ Katherine L. Bass 

 

Name:

Katherine L. Bass

 

Title:

Vice President

 

Signature Page

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WACHOVIA BANK, NATIONAL ASSOCIATION

 

By:    /s/ Denis Waltrich 

 

Name:

Denis Waltrich

 

Title:

Associate

 

 

Signature Page

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SOVEREIGN BANK

 

By:    /s/ Judith C.E. Kelly 

 

Name:

Judith C.E. Kelly

 

Title:

Senior Vice President

 

Signature Page

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UNION BANK OF CALIFORNIA, N.A.

 

By:    /s/ Theresa L. Rocha 

 

Name:

Theresa L. Rocha

 

Title:

Vice President & Manager

 

Signature Page

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WELLS FARGO BANK, NATIONAL ASSOCIATION

 

By:    /s/ Peter M. Angelica 

 

Name:

Peter M. Angelica

 

Title:

Vice President

 

Signature Page

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THE BANK OF NEW YORK

 

By:    /s/ Erin Morrissey 

 

Name:

Erin Morrissey

 

Title:

Assistant Vice President

 

Signature Page

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FIFTH THIRD BANK

 

By:    /s/ George B. Davis 

 

Name:

George B. Davis

 

Title:

Vice President

Signature Page

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MANUFACTURERS AND TRADERS TRUST COMPANY

 

By:    /s/ Jennifer G. Erickson 

 

Name:

Jennifer G. Erickson

 

Title:

Vice President

 

Signature Page

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NATIONAL CITY BANK

 

By:    /s/ Brian Strayton 

 

Name:

Brian Strayton

 

Title:

Senior Vice President

 

Signature Page

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THE ROYAL BANK OF SCOTLAND PLC

 

By:    /s/ Belinda Wheeler 

 

Name:

Belinda Wheeler

 

Title:

Senior Vice President

 

Signature Page

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U.S. BANK NATIONAL ASSOCIATION

 

By:    /s/ Gregory L. Dryden 

 

Name:

Gregory L. Dryden

 

Title:

Senior Vice President

 

Signature Page

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COMERICA BANK

 

By:    /s/ Sarah R. West 

 

Name:

Sarah R. West

 

Title:

Assistant Vice President

 

 

Signature Page

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FIRST HAWAIIAN BANK

 

By:    /s/ Lisa A. Tomihama 

 

Name:

Lisa A. Tomihama

 

Title:

Vice President

 

 

Signature Page

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CAPITAL ONE NATIONAL ASSOCIATION

 

By:    /s/ Julie Nosser 

 

Name:

Julie Nosser

 

Title:

Assistant Vice President

 

 

Signature Page

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