SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND
AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 6)*
barnesandnoble.com inc.
-----------------------
(Name of Issuer)
CLASS A COMMON STOCK
--------------------
(Title of Class of Securities)
067846 10 5
-----------
(CUSIP Number)
Mr. Leonard Riggio
Barnes & Noble, Inc.
122 Fifth Avenue
New York, NY 10011
with copies to:
Jay M. Dorman, Esq.
Bryan Cave LLP
1290 Avenue of the Americas
New York, NY 10104
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 8, 2004
---------------
(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 Rule 13d-1(e), 13d-1(f) or 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 Rule 13d-7 for other
parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 8 Pages)
* 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 (the "Exchange Act") or otherwise subject to the liabilities of that
section of the Exchange Act but shall be subject to all other provisions of the
Exchange Act (however, see the Notes).
CUSIP No. 067846 10 5 13D Page 2 of 8
_____________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (Entities Only)
Barnes & Noble, Inc.
_____________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
_____________________________________________________________________________
3 SEC USE ONLY
_____________________________________________________________________________
4 SOURCE OF FUNDS*
BK, OO, WC
_____________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
_____________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 119,138,502
______________________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY None
______________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 119,138,502
______________________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH None
_____________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
119,138,502
_____________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
_____________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.6%
_____________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
_____________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
CUSIP No. 067846 10 5 13D Page 3 of 8
_____________________________________________________________________________
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (Entities Only)
B&N.com Holding Corp.
_____________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
_____________________________________________________________________________
3 SEC USE ONLY
_____________________________________________________________________________
4 SOURCE OF FUNDS*
BK, OO, WC
_____________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [ ]
_____________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF 7 SOLE VOTING POWER
SHARES 119,138,502
______________________________________________________________
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY None
______________________________________________________________
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 119,138,502
______________________________________________________________
PERSON 10 SHARED DISPOSITIVE POWER
WITH None
_____________________________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
119,138,502
_____________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
_____________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
74.6%
_____________________________________________________________________________
14 TYPE OF REPORTING PERSON*
CO
_____________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
13D
CUSIP No. 067846 10 5 Page 4 of 8
This Amendment No. 6 to Schedule 13D ("Amendment No. 6") is being filed by
Barnes & Noble, Inc. ("B&N") and its wholly owned subsidiary, B&N.com Holding
Corp. ("B&N.com Holding"), each Delaware corporations (collectively, the
"Reporting Persons"), to amend the Schedule 13D (as amended, the "Schedule 13D")
filed by the Reporting Persons on November 1, 2002, as amended on November 15,
2002 by Amendment No. 1, as amended on April 7, 2003 by Amendment No. 2, as
amended on August 1, 2003 by Amendment No. 3 ("Amendment No. 3"), as amended on
September 15, 2003 by Amendment No. 4 and as amended on November 7, 2003 by
Amendment No. 5 ("Amendment No. 5"), with respect to beneficial ownership of
Class A Common Stock, $0.001 par value per share (the "Shares"), of
barnesandnoble.com inc., a Delaware corporation (the "Issuer").
In accordance with Exchange Act Rule 13d-2, this Amendment No. 6 amends and
supplements only information that has materially changed since the November 7,
2003 filing of Amendment No. 5. Unless otherwise indicated herein, terms used
but not otherwise defined in this Amendment No. 6 shall have the same respective
meanings herein as are ascribed to such terms in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is hereby amended and supplemented by adding the
following:
B&N expects to fund the consideration payable in the Merger (as hereinafter
defined) reported in this Amendment No. 6 and described in Item 4 below from
cash flow from operations and from its $500 million revolving credit facility,
as amended and as the same may be amended or modified from time to time, with
Fleet National Bank as administrative agent thereunder (the "Revolving Credit
Facility"). References to and descriptions of the Revolving Credit Facility are
qualified in their entirety by reference to the copy of the Revolving Credit
Facility, which is included as Exhibit 9 to Amendment No. 3 and incorporated by
reference herein, as amended by Amendment No. 1 to the Revolving Credit
Facility, which is included as Exhibit 16 to this Amendment No. 6 and
incorporated by reference herein, as amended by Amendment No. 2 to the Revolving
Credit Facility, which is included as Exhibit 17 to this Amendment No. 6 and
incorporated by reference herein, and as amended by Amendment No. 3 to the
Revolving Credit Facility, which is attached as Exhibit 18 to this Amendment 6
and incorporated by reference herein.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended and supplemented by adding the
following:
On January 8, 2004, B&N, B&N.com Holding, B&N.com Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of B&N Holding ("B&N Acquisition"),
and the Issuer entered into an Agreement and Plan of Merger, dated as of January
8, 2004, a copy of which is included as Exhibit 14 to this Amendment No. 6 and
is incorporated by reference herein
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CUSIP No. 067846 10 5 Page 5 of 8
(the "Merger Agreement"). A copy of the January 8, 2004 press release of B&N
with respect to the Merger Agreement is included as Exhibit 15 to this Amendment
No. 6 (the "Press Release").
Pursuant to the Merger Agreement, B&N Acquisition would merge with and into the
Issuer (the "Merger"), with the Issuer as the surviving corporation, on the
terms and subject to the conditions set forth in the Merger Agreement. In the
Merger, each Share that is issued and outstanding immediately prior to the
effective time of the Merger (other than dissenting Shares and Shares held by
B&N Holding) will be converted into and become the right to receive $3.05 in
cash for each such Share, without interest and, when so converted, will
automatically be canceled and will cease to exist. Each Share and each share of
Class B Common Stock, $0.001 par value per share ("Class B Common Stock"), and
Class C Common Stock, $0.001 par value per share ("Class C Common Stock"), that
is owned immediately prior to the effective time of the Merger by B&N Holding
will be canceled and will cease to exist, no consideration will be delivered in
respect of such shares, and B&N Holding will cease to have any rights with
respect to any certificates representing any such shares.
The Merger Agreement provides that consummation of the Merger is subject to
certain closing conditions set forth in the Merger Agreement. The information
set forth in response to this Item 4 is qualified in its entirety by reference
to the Merger Agreement and the Press Release.
Upon completion of the Merger, B&N will seek to cause the Shares to be delisted
from trading on the Nasdaq National Market and deregistered under the Securities
Exchange Act of 1934, as amended.
Other than changes in the capitalization, corporate structure and/or governing
documents resulting from the transaction, and other than the intention to cause
the Board of Directors of the Issuer following consummation of the Merger to be
comprised solely of the members of the Board of Directors of B&N Acquisition
immediately prior to the effective time of the Merger, and as otherwise set
forth herein, B&N has no present plans or proposals with respect to any other
action referred to in instructions (a) through (j) of Item 4 of Schedule 13D.
B&N expressly reserves the right to change its business plans, operations and
management arrangements with respect to the Issuer based on future developments.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
Securities of the Issuer.
Item 6 of the Schedule 13D is hereby amended and supplemented by adding the
following:
In connection with the Merger, Citigroup Global Markets, Inc. acted as a
financial advisor to B&N pursuant to the letter agreement attached as Exhibit 19
to this Amendment No. 6 and incorporated by reference herein (the "Citigroup
Engagement Letter"). References to and descriptions of the Citigroup Engagement
Letter are qualified in their entirety by reference to the Citigroup Engagement
Letter.
13D
CUSIP No. 067846 10 5 Page 6 of 8
Under the Revolving Credit Facility and the Securities Collateral Pledge
Agreement related thereto, a copy of which is included as Exhibit 11 to
Amendment No. 3 and incorporated by reference herein (the "Pledge Agreement"),
the banks party to the Revolving Credit Facility will be granted a security
interest in the shares of the Issuer that B&N Holding will own following the
Merger. References to and descriptions of the Pledge Agreement are qualified in
their entirety by reference to the Pledge Agreement.
Except for the Merger Agreement, the Revolving Credit Facility, the Citigroup
Engagement Letter, the Pledge Agreement and the materials filed as Exhibits to
the Schedule 13D, to the best knowledge of the Reporting Persons there are no
contracts, agreements, understandings or relationships (legal or otherwise),
including, but not limited to, transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving or withholding
of proxies, between the persons enumerated in Item 2 of the Schedule 13D, and
any other person, with respect to any securities of the Issuer, including any
securities pledged or otherwise subject to a contingency the occurrence of which
would give another person voting power or investment power over such securities
other than standard default and similar provisions contained in loan agreements.
The matters set forth in Items 3 and 4 above are incorporated in this Item 6 by
reference as if fully set forth herein.
Item 7. Material to be Filed as Exhibits.
Item 7 is amended and supplemented to include the following:
12. Press Release issued by B&N on November 7, 2003 (previously filed as
Exhibit 99.1 of Amendment No. 5 filed by B&N on November 7, 2003).
13. Letter to the Special Committee of the Board of Directors of the Issuer
regarding the proposed merger (previously filed as Exhibit 99.2 of
Amendment No. 5 filed by B&N on November 7, 2003).
14. Agreement and Plan of Merger, dated as of January 8, 2004, by and among
B&N, B&N Holding, B&N Acquisition and the Issuer (incorporated by reference
to Exhibit 2.1 of the Form 8-K filed by B&N on January 8, 2004).
15. Press Release issued by B&N on January 8, 2004 (incorporated by reference
to Exhibit 99.1 of the Form 8-K filed by B&N on January 8, 2004).
16. Amendment No. 1 to Revolving Credit Agreement, dated as of August 29, 2002,
among B&N, Fleet National Bank, as Administrative Agent, and the Banks
party thereto (incorporated by reference to Exhibit 10.1 of the Form 10-Q
filed by B&N on December 16, 2002).
13D
CUSIP No. 067846 10 5 Page 7 of 8
17. Amendment No. 2 to Revolving Credit Agreement, dated as of May 30, 2002,
among B&N, Fleet National Bank, as Administrative Agent, and the Banks
party thereto (incorporated by reference to Exhibit 10.1 of the Form 10-Q
filed by B&N on September 12, 2003).
18. Amendment No. 3 to Revolving Credit Agreement, dated as of December 4,
2003, among B&N, Fleet National Bank, as Administrative Agent, and the
Banks party thereto.
19. Letter Agreement between B&N and Citigroup Global Markets, Inc., dated
October 31, 2003.
13D
CUSIP No. 067846 10 5 Page 8 of 8
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.
Dated: January 8, 2004
BARNES & NOBLE, INC.
By: /s/ Joseph Lombardi
-----------------------
Joseph Lombardi
Chief Financial Officer
B&N.COM HOLDING CORP.
By: /s/ Joseph Lombardi
-----------------------
Joseph Lombardi
Chief Financial Officer
Exhibit 18
AMENDMENT NO. 3
TO REVOLVING CREDIT AGREEMENT
This Amendment No. 3 to Revolving Credit Agreement, dated as of December 4,
2003 (this "Amendment"), amends that certain Revolving Credit Agreement, dated
as of May 22, 2002, as amended by that certain Amendment No. 1 dated as of
August 29, 2002, and that certain Amendment No. 2 dated as of May 30, 2003 (as
amended, the "Credit Agreement"), among Barnes & Noble, Inc., a Delaware
corporation, (the "Borrower"), the lending institutions listed on Schedule 1 to
the Credit Agreement (the "Banks"), Fleet National Bank, as administrative agent
for itself and each other Bank (in such capacity, the "Administrative Agent"),
ING Capital LLC, as documentation agent, Wachovia Bank, National Association, as
syndication agent, and Fleet Securities, Inc. and First Union Securities, Inc.
(d/b/a Wachovia Securities), as co-arrangers.
WHEREAS, the Borrower has requested certain amendments to the Credit
Agreement and the Bank parties hereto are willing to agree to such amendments.
NOW, THEREFORE, in consideration of these premises, the promises, mutual
covenants and agreements contained in this Amendment and fully intending to be
legally bound hereby, the parties hereby agree as follows:
1. Capitalized Terms. Terms used in this Amendment which are not defined
herein, but which are defined in the Credit Agreement, shall have the same
respective meanings herein as therein.
2. Amendments to Credit Agreement.
2.1 Amendment of Section 1.1. The definition of "Affiliated Subsidiaries"
contained in Section 1.1 of the Loan Agreement is amended by adding the
following proviso thereto (prior to the period at the end thereof):
", provided that any Subsidiary set forth in the preceding clause (i)
or (ii) shall no longer be considered an Affiliated Subsidiary from and
after the date upon which it becomes a wholly-owned Subsidiary of the
Borrower".
2.2 Amendment of Section 1.1. The definition of "Cumulative Excess Cash
Flow" contained in Section 1.1 of the Credit Agreement is amended (i) by
deleting the reference to "February 3, 2002" contained therein; and (ii) by
inserting in place thereof the following: "November 2, 2003".
2.3 Amendment of Section 1.1. The definition of "Qualified Investments"
contained in Section 1.1 of the Credit Agreement is amended to read in its
entirety as follows:
"Qualified Investments. As applied to any member of the Borrower Affiliated
Group, investments in (i) notes, bonds or other obligations of the United
States of America or any agency thereof that as to principal and interest
constitute direct obligations of or are guaranteed by the United States of
America, (ii) certificates of deposit or other deposit instruments or
accounts of banks or trust companies organized under the laws of the United
States or any state thereof that have capital and surplus of at least
$100,000,000, (iii) commercial paper that is rated not less than prime-one
or A-1 or their equivalents by Moody's Investors Service, Inc. or Standard
& Poor's Corporation, respectively, or their successors, (iv) any
repurchase agreement secured by any one or more of the foregoing, (v)
Investments in wholly-owned Subsidiaries (other than any Affiliated
Subsidiary); provided, however, that the aggregate amount of Investments in
Foreign Subsidiaries may not at any time exceed 10% of the Borrower's
Consolidated Tangible Net Worth determined as of the end of the most
recently completed fiscal quarter of the Borrower, (vi) loans permitted by
Section 6.13, (vii) from and after November 2, 2003, Investments described
in clause (i) of the definition of Investments in B&N.com in an aggregate
amount outstanding not to exceed $115,000,000, (viii) in addition to all of
the foregoing, from and after November 2, 2003, Investments described in
clause (i) of the definition of Investments in connection with Permitted
Acquisitions; provided, however, that the aggregate consideration
(including all cash and non-cash consideration and any assumption of
Indebtedness, but excluding any Equity Securities of the Borrower) for such
Investments, together with all such consideration paid in connection with
Permitted Acquisitions not constituting Investments, shall not exceed, when
made, the sum of $105,000,000 plus 50% of the Borrower's Cumulative Excess
Cash Flow, and provided, further, that, with respect to Investments in
B&N.com only, (a) Investments described in clause (i) of the definition of
Investments shall first be applied to the basket referred to in clause
(vii) above and, after such basket has been fully utilized, to the basket
under this clause (viii), (b) Investments described in clause (ii) of the
definition of Investments shall also be permitted to be made under this
clause (viii) in B&N.com, and (c) the aggregate Investments made in B&N.com
pursuant to this clause (viii) shall not exceed when made $100,000,000 (the
"B&N.com Sub-Limit"), (ix) Investments in Affiliated Subsidiaries and
Investments in other minority-owned Persons made prior to the date hereof
and disclosed on Exhibit D hereto, and (x) Interest Rate Protection
Agreements for an aggregate notional amount not to exceed $300,000,000 at
any time outstanding. Notwithstanding the foregoing, (a) in the event that
the Borrower makes Investments in B&N.com under clause (viii) of the
foregoing provision and, subsequent to such Investments, B&N.com becomes a
wholly-owned Subsidiary of the Borrower, the aggregate amount of all such
Investments shall be deemed to be available again under such clause (viii)
from the date upon which B&N.com became a wholly-owned Subsidiary (other
than any amounts in excess of the Investments permitted under clause (vii)
above made on or after November 2, 2003 which were used to acquire any
capital stock of B&N.com except in connection with an offering of rights to
all shareholders of B&N.com), and (b) prior to B&N.com becoming a
wholly-owned Subsidiary of the Borrower, the Borrower may, without such
Investments being double-counted, convert any Investment it has made in
B&N.com under clause (viii) of the foregoing provision to an Investment
made under clause (vii) thereof (subject to the limitations contained in
such clause (vii)), and any such amount converted shall then no longer
count against utilization of the B&N.com Sub-Limit."
It is understood and agreed by the Borrower that, for purposes of
determining the Borrower's compliance with Qualified Investments, the permitted
baskets in effect prior to the Amendment Effective Date shall continue to govern
such compliance for all periods ending on or prior to November 1, 2003.
2.4 Amendment of Section 1.1. The definition of "Security Agreements"
contained in Section 1.1 of the Loan Agreement is amended to read in its
entirety as follows:
"Security Agreements. (a) The Security Agreements dated as of the date
hereof and executed and delivered by the Borrower and each Domestic
Subsidiary who is a member of the Borrower Affiliated Group to the
Administrative Agent, for the ratable benefit of the Banks and the
Administrative Agent, and (b) any other Security Agreements dated after the
date hereof and executed and delivered by a Domestic Subsidiary who is a
member of the Borrower Affiliated Group to the Administrative Agent, for
the ratable benefit of the Banks and the Administrative Agent."
2.5 Amendment of Section 1.1. The definition of "Pledge Agreements"
contained in Section 1.1 of the Loan Agreement is amended to read in its
entirety as follows:
"Pledge Agreements. (a) The Pledge Agreements dated as of the date
hereof and executed and delivered by each of the Borrower and certain of
its Subsidiaries to the Administrative Agent, for the ratable benefit of
the Banks and the Administrative Agent, pursuant to which, without
limitation, (i) all of the issued and outstanding capital stock of all
Subsidiaries (or, in the case of Foreign Subsidiaries, 65%), other than
Affiliated Subsidiaries, is pledged to the Administrative Agent, and (ii)
all of the issued and outstanding capital stock of the Affiliated
Subsidiaries and the capital stock or other equity of minority-owned
Persons, in each case which is directly owned by the Borrower or any other
member of the Borrower Affiliated Group, is pledged to the Administrative
Agent, (b) all Pledge Agreements to be delivered by the Borrower from time
to time in accordance with Section 5.2(d) and the definition of Permitted
Acquisitions, and (c) any other Pledge Agreements dated after the date
hereof and executed and delivered by any Domestic Subsidiary who is a
member of the Borrower Affiliated Group to the Administrative Agent, for
the ratable benefit of the Banks and the Administrative Agent."
2.6 Amendment of Section 1.1. The definition of "Patent and Trademark
Security Agreements" contained in Section 1.1 of the Loan Agreement is amended
to read in its entirety as follows:
"Patent and Trademark Security Agreements. (a) The Patent and
Trademark Security Agreements dated as of the date hereof and executed and
delivered by the Borrower and each Domestic Subsidiary who is a member of
the Borrower Affiliated Group to the Administrative Agent for the ratable
benefit of the Banks, and (b) any other Patent and Trademark Security
Agreements dated after the date hereof and executed and delivered by a
Domestic Subsidiary who is a member of the Borrower Affiliated Group to the
Administrative Agent, for the ratable benefit of the Banks and the
Administrative Agent."
2.7 Amendment of Section 1.1. Clause (viii) of the definition of "Permitted
Acquisition" contained in Section 1.1 of the Loan Agreement is amended to read
in its entirety as follows:
"(viii) the aggregate consideration (including all cash and non-cash
consideration and any assumption of Indebtedness, but excluding any Equity
Securities of the Borrower) for such acquisitions which do not constitute
Investments, together with all Investments made pursuant to clause (viii)
of the definition of Qualified Investments (but not any other provision of
such definition), from and after November 2, 2003, shall not exceed, when
made, the sum of $105,000,000 plus 50% of the Borrower's Cumulative Excess
Cash Flow."
It is understood and agreed by the Borrower that, for purposes of
determining the Borrower's compliance with clause (viii) of the definition of
Permitted Acquisition, the permitted basket in effect prior to the Amendment
Effective Date shall continue to govern such compliance for all periods ending
on or prior to November 1, 2003.
2.8. Amendment of Section 6.9(b). Section 6.9(b) is hereby amended and
restated in its entirety as follows:
"(b) the Borrower may effect redemptions and repurchases of its stock and
pay dividends to its stockholders, provided that, with respect to this
clause (b), (x) no Default or Event of Default has occurred or is
continuing, both before and after giving effect to any such distributions,
dividends, redemptions, repurchases and payments, and (y) the cumulative
aggregate amount of redemptions and repurchases made from and after
November 2, 2003, shall not exceed, when made, an aggregate amount equal to
the sum of $105,000,000 plus 15% of the Borrower's Cumulative Excess Cash
Flow."
It is understood and agreed by the Borrower that, for purposes of
determining the Borrower's compliance with Section 6.9(b), the permitted basket
in effect prior to the Amendment Effective Date shall continue to govern such
compliance for all periods ending on or prior to November 1, 2003.
3. Effectiveness. This Amendment shall become effective on the first date
when the following conditions are met (the "Amendment Effective Date"):
(a) the Administrative Agent shall have received counterparts hereof signed
by the Required Banks, all of the Guarantors and the Borrower (or, in the
case of any party as to which an executed counterpart shall not have been
received, the Administrative Agent shall have received in form satisfactory
to it a telecopy or other written confirmation from such party of execution
of a counterpart hereof by such party);
(b) the Administrative Agent shall have received stock certificates and
stock transfer powers executed in blank for all B&N.com capital stock owned
by the Borrower as of the Amendment Effective Date (except for stock
certificates representing shares of Class A common stock of B&N.com), along
with an updated Schedule 1 to the B&N.com Holding Corp. Securities
Collateral Pledge Agreement;
(c) the Administrative Agent shall have received payment of an amendment
fee for each Bank which shall have executed and delivered a counterpart
hereof as contemplated by clause (a), such amendment fee to be in an amount
equal to 0.10% of such Bank's Commitment; and
(d) each of the Administrative Agent and the Arranger shall have received
payment of all other costs, fees and expenses (including, without
limitation, reasonable legal fees and expenses for which invoices shall
have been submitted to the Borrower) and other compensation payable to any
of the foregoing on or prior to the Amendment Effective Date in connection
with the Loan Documents.
Promptly after the Amendment Effective Date occurs, the Administrative
Agent shall notify the Borrower and the Banks thereof, and such notice shall be
conclusive and binding on all parties hereto.
4. Ratification; Miscellaneous. Except as amended hereby, all other
provisions, terms and conditions of the Credit Agreement and the other Loan
Documents are hereby ratified and confirmed and shall continue in full force and
effect. Each of the representations and warranties made by the Borrower or any
other member of the Borrower Affiliated Group in any of the Loan Documents was
true and correct when made and is true and correct in all material respects on
and as of the date hereof (except to the extent that such representations and
warranties relate expressly to an earlier date), and no Default or Event of
Default exists on the date hereof. This Amendment shall not be deemed a waiver
of any defaults that may exist under any of the Loan Documents. This Amendment
may be executed in any number of counterparts and by the different parties
hereto on separate counterparts, each of which when so executed and delivered
shall be an original, but all of which shall constitute one and the same
instrument. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the law of the
State of New York without giving effect to the conflict of law principles
thereof.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 to
Revolving Credit Agreement as of this 4th day of December, 2003.
BARNES & NOBLE, INC., Borrower
By: / s / John Weisenseel
------------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
FLEET NATIONAL BANK,
as a Bank and as Administrative Agent
By: / s / Alexis MacElhiney
------------------------------------
Name: Alexis MacElhiney
Title: Vice President
ING CAPITAL LLC, as a Bank and as
Documentation Agent
By: / s / William B. Redmond
------------------------------------
Name: William B. Redmond
Title: Managing Director
(Signatures continued on next page)
WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Bank and as Syndication Agent
By: / s / Denis Waltrich
------------------------------------
Name: Denis Waltrich
Title: Associate
CITICORP USA, INC., as a Bank
By: / s / John Frezoulis
------------------------------------
Name: John Frezoulis
Title: Vice President
SUNTRUST BANK, as a Bank
By: / s / Heidi M. Khambatta
------------------------------------
Name: Heidi M. Khambatta
Title: Vice President
THE BANK OF NEW YORK, as a Bank
By: / s / Johna M. Fidanza
------------------------------------
Name: Johna M. Fidanza
Title: Vice President
WELLS FARGO BANK NA, as a Bank
By: / s / Kathleen Rosof
------------------------------------
Name: Kathleen Rosof
Title: Vice President
(Signatures continued on next page)
JPMORGAN CHASE BANK, as a Bank
By: / s / Rebecca Vogel
------------------------------------
Name: Rebecca Vogel
Title: Vice President
SOVEREIGN BANK, as a Bank
By: / s / Jesse Wong
------------------------------------
Name: Jesse Wong
Title: Vice President
NATIONAL CITY BANK, as a Bank
By: / s / Thomas J. McDonnell
------------------------------------
Name: Thomas J. McDonnell
Title: Senior Vice President
BANK OF AMERICA, N.A., as a Bank
By: / s / Temple H. Abney
------------------------------------
Name: Temple H. Abney
Title: Vice President
(Signatures continued on next page)
COMERICA BANK, as a Bank
By: / s / Joel S. Gordon
------------------------------------
Name: Joel S. Gordon
Title: Assistant Vice President
FIFTH THIRD BANK, as a Bank
By: / s / Ann Pierson
------------------------------------
Name: Ann Pierson
Title: Assistant Vice President
MELLON BANK, N.A. , as a Bank
By: / s / Mark F. Johnston
------------------------------------
Name: Mark F. Johnston
Title: First Vice President
U.S. BANK NATIONAL ASSOCIATION, as a Bank
By: / s / Gregory L. Dryden
------------------------------------
Name: Gregory L. Dryden
Title: Vice President
MANUFACTURERS AND TRADERS TRUST
COMPANY, as a Bank
By: / s / Timothy S. Avendt
------------------------------------
Name: Timothy S. Avendt
Title: Vice President
(Signatures continued on next page)
FIRST HAWAIIAN BANK, as a Bank
By: / s / Charles L. Jenkins
------------------------------------
Name: Charles L. Jenkins
Title: Vice President, Manager
HIBERNIA NATIONAL BANK, as a Bank
By: / s / Michael R. Geissler
------------------------------------
Name: Michael R. Geissler
Title: Vice President
(Signatures continued on next page)
Acknowledged and Agreed:
BARNES & NOBLE BOOKSELLERS, INC., Guarantor
By: / s / John Weisenseel
-----------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
Hereunto Duly Authorized
B. DALTON BOOKSELLER, INC., Guarantor
By: / s / John Weisenseel
-----------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
Hereunto Duly Authorized
DOUBLEDAY BOOK SHOPS, INC., Guarantor
By: / s / John Weisenseel
-----------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
Hereunto Duly Authorized
B&N.COM HOLDING CORP., Guarantor
By: / s / John Weisenseel
-----------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
Hereunto Duly Authorized
CCI HOLDINGS, INC., Guarantor
By: / s / John Weisenseel
-----------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
Hereunto Duly Authorized
(Signatures continued on next page)
STERLING PUBLISHING CO., INC., Guarantor
By: / s / John Weisenseel
-----------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
Hereunto Duly Authorized
ALTAMONT PRESS, INC., Guarantor
By: / s / John Weisenseel
-----------------------------------
Name: John Weisenseel
Title: Vice President and Treasurer
Hereunto Duly Authorized
Exhibit 19
October 31, 2003
Barnes & Noble, Inc.
122 Fifth Avenue
New York, NY 10011
Attention: Leonard Riggio, Chairman of the Board
Ladies and Gentlemen:
We are pleased that Barnes & Noble, Inc. (the "Company") has chosen to
engage Citigroup Global Markets Inc. ("Citigroup") as its exclusive financial
adviser in connection with a possible Transaction involving barnesandnoble.com
inc. (the "Target"). We look forward to working with you on this engagement, and
have set forth below the agreed upon terms of our engagement.
Scope of Engagement. As we have discussed, in the course of our engagement
as your exclusive financial adviser, we will perform such financial advisory and
investment banking services for the Company in connection with the proposed
Transaction as are customary and appropriate in transactions of this type and as
you reasonably request. For purposes of this agreement, "Transaction" means,
whether in one or a series of transactions, the acquisition, directly or
indirectly, by the Company of the publicly-traded common stock of the Target.
Fees and Expenses. For our services hereunder, the Company will pay to
Citigroup a cash fee equal to $1,000,000, payable promptly upon consummation of
a Transaction.
Regardless of whether any Transaction is proposed or consummated, the
Company will promptly reimburse Citigroup, from time to time upon request, for
all reasonable travel and other expenses incurred in performing our services
hereunder.
Use of Information. The Company recognizes and confirms that Citigroup in
acting pursuant to this engagement will be using publicly available information
and information in reports and other materials provided by others, including,
without limitation, information provided by or on behalf of the Company, and
that Citigroup does not assume responsibility for and may rely, without
independent verification, on the accuracy and completeness of any such
information. The Company agrees to furnish or cause to be furnished to Citigroup
all necessary or appropriate information for use in its engagement and hereby
warrants that any information relating to the Company or the Transaction that is
furnished to Citigroup by or on behalf of the Company will be true and correct
in all material respects and not misleading. The Company agrees that any
information or advice rendered by Citigroup or any of our representatives in
connection with this engagement is for the confidential use of the Company and
its advisors only in their evaluation of a Transaction and, except as required
by law (with prior consultation with Citigroup to the extent practicable), the
Company will not, and will not permit any third party (other than its advisors)
to, use it for any other purpose or disclose or otherwise refer to such advice
or information in any manner without our prior written consent.
Barnes & Noble, Inc.
October 31, 2003
Page 2
Certain Acknowledgments. The Company acknowledges that Citigroup has been
retained hereunder solely as an adviser to the Company, and not as an adviser to
or agent of any other person, and that the Company's engagement of Citigroup is
as an independent contractor and not in any other capacity including as a
fiduciary. Citigroup may, to the extent it deems appropriate, render the
services hereunder through one or more of its affiliates. Neither this
engagement, nor the delivery of any advice in connection with this engagement,
is intended to confer rights upon any persons not a party hereto (including
security holders, employees or creditors of the Company) as against Citigroup or
our affiliates or their respective directors, officers, agents and employees.
Citigroup may, at our own expense and with the prior written consent of the
Company, place announcements or advertisements in financial newspapers, journals
and marketing materials describing our services hereunder.
The Company acknowledges that it is not relying on the advice of Citigroup for
tax, legal or accounting matters, it is seeking and will rely on the advice of
its own professionals and advisors for such matters and it will make an
independent analysis and decision regarding any Transaction based upon such
advice. Notwithstanding anything herein to the contrary, the Company (and each
employee, representative or other agent of the Company) may disclose to any and
all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of any Transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to the Company relating to such U.S.
tax treatment and U.S. tax structure, other than any information for which
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
The Company should be aware that Citigroup and/or its affiliates may be
providing or may in the future provide financial or other services to other
parties with conflicting interests. However, consistent with our long-standing
policy to hold in confidence the affairs of our customers, we will not use
confidential information obtained from the Company except in connection with our
services to, and our relationship with, the Company, nor will we use on the
Company's behalf any confidential information obtained from any other customer.
Indemnity. The Company agrees to indemnify Citigroup as provided in Annex A
hereto, the terms of which are incorporated into this agreement in their
entirety.
Termination of Engagement. Citigroup's engagement will commence on the date
hereof and will continue until the earlier of the consummation of a Transaction
and 12 months after the date hereof, unless extended by mutual written consent
or earlier terminated as provided below. Either the Company or Citigroup may
terminate this agreement at any time, with or without cause, by giving written
notice to the other party; provided, however, that no such expiration or
termination will affect the matters set out in this section or under the
captions "Use of Information," "Certain Acknowledgments," "Indemnity" and
"Miscellaneous." It is expressly agreed that following the expiration or
termination of this agreement, Citigroup will continue to be entitled to receive
fees as described above that have accrued prior to such expiration or
termination but are unpaid, as well as reimbursement for expenses as
contemplated above. It is also expressly agreed that, if a Transaction is
consummated within 12 months after the date of expiration or termination of this
agreement or if a definitive agreement that results in a Transaction is entered
into during the term of this agreement or within such period, Citigroup shall be
entitled to its full fees as described above.
Barnes & Noble, Inc.
October 31, 2003
Page 3
Miscellaneous. This agreement is governed by the laws of the State of New
York, without regard to conflicts of law principles, and will be binding upon
and inure to the benefit of the Company and Citigroup and their respective
successors and assigns. The Company and Citigroup agree to waive trial by jury
in any action, proceeding or counterclaim brought by or on behalf of either
party with respect to any matter whatsoever relating to or arising out of any
actual or proposed transaction or the engagement of or performance by Citigroup
hereunder. This agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
We are delighted to accept this engagement and look forward to working with
you on this matter. Please confirm that the foregoing is in accordance with your
understanding of our agreement by signing and returning to us a copy of this
letter.
Very truly yours,
CITIGROUP GLOBAL MARKETS INC.
By: /s/ Michael Eck
--------------------------------
Michael Eck
Managing Director
Head of Global Consumer
Accepted and agreed to as of
the date set forth above:
BARNES & NOBLE, INC.
By: /s/ Leonard Riggio
--------------------------------
Leonard Riggio
Chairman of the Board
Barnes & Noble, Inc.
October 31, 2003
Page 4
Annex A
In connection with the engagement of Citigroup to assist the Company as
described in the attached engagement letter, including modifications or future
additions to such engagement and related activities prior to the date of the
engagement letter (the "engagement"), the Company agrees that it will indemnify
and hold harmless Citigroup and its affiliates and their respective directors,
officers, agents and employees and each other person controlling Citigroup or
any of its affiliates (each, an "indemnified party"), to the full extent lawful,
from and against any losses, expenses, claims or proceedings (collectively,
"losses") (i) related to or arising out of (A) the contents of oral or written
information provided by the Company, its employees or its other agents, which
information either the Company or Citigroup provides to any actual or potential
buyers, sellers, investors or offerees, or (B) any other action or failure to
act by the Company, its employees or its other agents or by Citigroup or any
indemnified party in accordance with and at the Company's request or with the
Company's consent, or (ii) otherwise related to or arising out of the engagement
or any transaction or conduct in connection therewith, except that this clause
(ii) shall not apply with respect to any losses that are finally judicially
determined to have resulted primarily from the gross negligence or willful
misconduct of such indemnified party. The Company further agrees that no
indemnified party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to the Company or any of its affiliates,
creditors or security holders for or in connection with the engagement or any
actual or proposed transactions or other conduct in connection therewith except
for losses incurred by the Company that are finally judicially determined to
have resulted primarily from the gross negligence or willful misconduct of such
indemnified party.
In the event that the foregoing indemnity is unavailable to any indemnified
party for any reason (other than pursuant to the exception contained in the
first paragraph hereof), the Company agrees to contribute to any losses related
to or arising out of the engagement or any transaction or conduct in connection
therewith as follows. For losses referred to in clause (i) of the preceding
paragraph, Citigroup and the Company shall contribute in such proportion as is
appropriate to reflect the relative benefits received (or anticipated to be
received) by Citigroup, on the one hand, and by the Company and its security
holders, on the other hand, from the actual or proposed transaction arising in
connection with the engagement. For any other losses, and for losses referred to
in clause (i) of the preceding paragraph if the allocation provided by the
immediately preceding sentence is unavailable for any reason, Citigroup and the
Company shall contribute in such proportion as is appropriate to reflect not
only the relative benefits as set forth above, but also the relative fault of
Citigroup and the Company in connection with the statements, omissions or other
conduct that resulted in such losses, as well as any other relevant equitable
considerations. Benefits received (or anticipated to be received) by the Company
and its security holders shall be deemed to be equal to the aggregate cash
consideration and value of securities or any other property payable, issuable,
exchangeable or transferable in such transaction or proposed transaction, and
benefits received by Citigroup shall be deemed to be equal to the compensation
paid by the Company to Citigroup in connection with the engagement (exclusive of
amounts paid for reimbursement of expenses or paid under this Annex). Relative
fault shall be determined by reference to, among other things, whether any
alleged untrue statement or omission or any other alleged conduct relates to
information provided by the Company or other conduct by the Company (or its
employees or other agents), on the one hand, or by Citigroup, on the other hand.
Citigroup and the Company agree that it would not be just and
Barnes & Noble, Inc.
October 31, 2003
Page 5
equitable if contribution were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable considerations
referred to above. Notwithstanding anything to the contrary above (other than
pursuant to the exception contained in the first paragraph hereof), in no event
shall Citigroup be responsible under this paragraph for any amounts in excess of
the amount of the compensation actually paid by the Company to Citigroup in
connection with the engagement (exclusive of amounts paid for reimbursement of
expenses or paid under this Annex).
The Company agrees that it will not, without prior written consent of Citigroup,
settle any pending or threatened claim or proceeding related to or arising out
of the engagement or any actual or proposed transactions or other conduct in
connection therewith (whether or not Citigroup or any indemnified party is a
party to such claim or proceeding) unless such settlement includes a provision
unconditionally releasing Citigroup and each other indemnified party from all
liability in respect of claims by any releasing party related to or arising out
of the engagement or any transactions or conduct in connection therewith. The
Company will not be liable under this Annex for any amount paid by Citigroup to
settle any claims or actions if the settlement is entered into without the
consent of the Company, not to be unreasonably withheld. The Company will also
promptly reimburse each indemnified party for all reasonable expenses (including
reasonable counsel fees and expenses) as they are incurred by such indemnified
party in connection with investigating, preparing for, defending, or providing
evidence in, any pending or threatened claim or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not
Citigroup or any indemnified party is a party to such claim or proceeding) or in
enforcing this Annex.
The foregoing provisions are in addition to any rights the Company or Citigroup
may have at common law or otherwise and shall be binding on and inure to the
benefit of any successors, assigns, and personal representatives of the Company
and each indemnified party. Solely for purposes of enforcing the provisions of
this Annex, the Company hereby consents to personal jurisdiction, service of
process and venue in any court in which any claim or proceeding that is subject
to this Annex is brought against Citigroup. The provisions of this Annex shall
remain in full force and effect notwithstanding the completion or termination of
the engagement.