SEC Filing | JOANN, Inc

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8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 10, 2023

JOANN Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-40204

46-1095540

(State or other jurisdiction
of incorporation)

(Commission
File Number)

(IRS Employer
Identification No.)

5555 Darrow Road

Hudson, Ohio 44236

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (330) 656-2600

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered
Common stock, par value $0.01 per share	JOAN	The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 1.01.	Entry Into a Material Definitive Agreement

On March 10, 2023 (the “Closing Date”), Jo-Ann Stores, LLC (“Jo-Ann”), a wholly-owned subsidiary of JOANN Inc. (the “Company”), entered into the Third Amendment (the “Third Amendment”) to the Amended and Restated Credit Agreement (dated as of October 21, 2016 and as previously amended, supplemented or otherwise modified prior to the Third Amendment (the “Existing Credit Agreement” and, as further amended by the Third Amendment, the “Amended Credit Agreement”)), by and among Jo-Ann, as borrower, Needle Holdings LLC, the guarantors party thereto, Bank of America, N.A. (“BofA”) as administrative agent and collateral agent (the “Agent”), 1903P Loan Agent, LLC, as FILO Documentation Agent, and the various lenders from time to time party thereto.

The Third Amendment, among other things, adds a series of first-in last-out loans (the “FILO Loans”) in an aggregate amount of $100.0 million, the full amount of which was drawn on the Closing Date and a portion of which proceeds were used, among other things, to refinance a portion of the revolving loans drawn and outstanding under the Existing Credit Agreement immediately prior to the Closing Date. The FILO Loans mature at the same time as the commitments under the Existing Credit Agreement (the “Revolving Commitments”) on December 22, 2026. The FILO Loans will not amortize. The FILO Loans are SOFR loans (as defined in the Third Amendment), that bear monthly interest at an annual rate of 9.75% with one 100 basis point stepdown based on minimum Consolidated EBITDA (as defined in the Third Amendment) and are subject to a SOFR floor of 1.50%.

The Third Amendment also amends the Existing Credit Agreement to (i) include certain trade receivables in the borrowing base, (ii) provide that loans drawn pursuant to the Revolving Commitments may be made at Jo-Ann’s election as base rate loans or SOFR loans and (iii) increases the applicable margin for SOFR loans to 2.00% with two twenty-five basis point step-downs based on excess availability. Revolving Loans made in SOFR are subject to a credit spread adjustment of 0.10% and a floor of 0.00%.

Other than the changes described above, all other material provisions of the Existing Credit Agreement remain unchanged and as previously disclosed.

Certain of the lenders party to the Amended Credit Agreement, and their respective affiliates, have performed, and may in the future perform for the Company and its subsidiaries, various commercial banking, investment banking, underwriting and other financial advisory services, for which they have received, or may receive, customary fees and expense reimbursements.

The foregoing description of the Third Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Third Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.

Item 9.01.

Financial Statements and Exhibits. 
 

(d) Exhibits.



Exhibit No.		Description

10.1		Third Amendment, dated as of March 10, 2023, by and among Jo-Ann Stores, LLC, Needle Holdings LLC, each of the Guarantors, each of the lenders party thereto, Bank of America, N.A., as administrative agent and collateral agent for the lenders and 1903P Loan Agent, LLC, as FILO Documentation Agent

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 13, 2023



JOANN INC.

By:		/s/ Scott N. Sekella
Name:		Scott N. Sekella
Title:		Senior Vice President, Chief Financial Officer

EX-10

Exhibit 10.1

EXECUTION VERSION

THIRD AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) dated as of March 10, 2023 by and among

JO-ANN STORES, LLC, an Ohio limited liability company (the “Borrower”),

NEEDLE HOLDINGS LLC, a Delaware limited liability company (“Holdings”),

the other Loan Parties party hereto,

the FILO Lenders party hereto,

the other Lenders party hereto,

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

1903P LOAN AGENT, LLC, as FILO Documentation Agent;

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

WHEREAS, the Borrower, Holdings, the Lenders, the Administrative Agent and the Collateral Agent, among others, have entered into a certain Amended and Restated Credit Agreement dated as of October 21, 2016 (as amended by that certain First Amendment to Amended and Restated Credit Agreement, dated as of November 25, 2020, as further amended by that certain Second Amendment to Amended and Restated Credit Agreement, dated as of December 22, 2021, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the effectiveness of this Amendment, the “Existing Credit Agreement”);

WHEREAS, the Borrower has requested to amend certain provisions of the Existing Credit Agreement, in each case, subject to the terms and conditions hereof;

WHEREAS, the Borrower has requested that the FILO Lenders provide a first-in, last-out term loan facility, and the FILO Lenders have agreed to provide such facility on the terms and conditions set forth herein; and

WHEREAS, the Lenders under (and as defined in) the Existing Credit Agreement, the Administrative Agent, the FILO Lenders and the FILO Documentation Agent have agreed to amend the Existing Credit Agreement on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the mutual promises and agreements herein contained, the parties hereto hereby agree as follows:

Incorporation of Terms and Conditions of Existing Credit Agreement. All capitalized terms not otherwise defined herein shall have the same meaning as in the Existing Credit Agreement, as amended by this Amendment (the “Amended Credit Agreement”).

Representations and Warranties. Each Loan Party hereby represents and warrants that after giving effect to this Amendment, (i) no Default or Event of Default exists under the Amended Credit Agreement or under any other Loan Document, and (ii) all representations and warranties contained in the Amended Credit Agreement and in the other Loan Documents are true and correct in all material respects (except in the case of any representation and warranty qualified by “materiality” or “Material Adverse Effect”, which is true and correct in all respects) as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (except in the case of any representation and warranty qualified by “materiality” or “Material Adverse Effect”, which is true and correct in all respects) as of such earlier date.

Amendments to Existing Credit Agreement. Subject to the satisfaction of the conditions precedent set forth in Section 4 below, the Existing Credit Agreement is hereby amended as following:

Credit Agreement. The Existing Credit Agreement is hereby amended as set forth in Annex A attached hereto such that all of the newly inserted double underlined text (indicated textually in the same manner as the following example: double-underlined text) and any formatting changes attached hereto shall be deemed to be inserted and all stricken text (indicated textually in the same manner as the following example: stricken text) shall be deemed to be deleted therefrom.

Exhibits to Credit Agreement. Exhibit A (Form of Assignment and Assumption), Exhibit C (Form of Notice of Borrowing), Exhibit F (Form of Notice of Conversion or Continuation), Exhibit J (Form of Borrowing Base Certificate), Exhibit N (Form of Compliance Certificate) and Exhibit O (Form of Solvency Certificate) to the Existing Credit Agreement are hereby deleted in their entirety and new Exhibit A, Exhibit C, Exhibit F, Exhibit J, Exhibit N and Exhibit O, respectively, are substituted in their stead as attached hereto in Annex B. Exhibit P (Form of FILO Note) attached hereto in Annex B is hereby added to the Amended Credit Agreement as Exhibit P thereto.

Schedules to Credit Agreement. Schedule I (Commitments), Schedule II (Guarantors), Schedule 5.12 (Subsidiaries and Other Equity Investments), Schedule 9.1(b) (Existing Liens), Schedule 9.2(f) (Existing Investments), Schedule 9.3(b) (Existing Indebtedness), Schedule 9.8 (Transactions with Affiliates) and Schedule 12.8 (Administrative Agent’s Office, Certain Addresses for Notices) to the Existing Credit Agreement are hereby deleted in their entirety and new Schedule I, Schedule II, Schedule 5.12, Schedule 9.1(b), Schedule 9.2(f), Schedule 9.3(b), Schedule 9.8 and Schedule 12.8, respectively, are substituted in their stead as attached hereto in Annex C.

Conditions to Effectiveness. This Amendment shall become effective on the date (the “Third Amendment Effective Date”) when each of the following conditions precedent has been fulfilled to the reasonable satisfaction of the Administrative Agent and the FILO Documentation Agent:

Amendment Documents. (i) This Amendment shall have been duly executed and delivered by the Loan Parties, the Administrative Agent, the FILO Documentation Agent, the FILO Lenders and other Lenders under (and as defined in) the Existing Credit Agreement, (ii) the FILO Fee Letter shall have been duly executed and delivered by each of the parties thereto, and (iii) the Fee Letter referenced in clause (z)(ii) of the definition of “Fee Letter” in the Credit Agreement shall have been duly executed and delivered by each of the parties thereto.

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FILO Note. A FILO Note, substantially in the form of Exhibit P to the Amended Credit Agreement, shall have been duly executed and delivered by the Borrower in favor of each FILO Lender requesting a FILO Note and reflecting the FILO Commitment of such FILO Lender after giving effect to this Amendment.

Solvency Certificate. A Solvency Certificate shall have been duly executed and delivered by the chief financial officer of the Borrower substantially in the form of Exhibit O to the Amended Credit Agreement.

Officer’s Closing Certificate. A certificate shall have been duly executed and delivered by a Responsible Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent and the FILO Documentation Agent, certifying as to satisfaction of the conditions precedent set forth in clauses (i) and (k) below and the representations and warranties set forth in Section 2 above.

Information Certificate. An updated Information Certificate shall have been duly executed and delivered by the Loan Parties.

Lien Searches. The Administrative Agent and the FILO Documentation Agent each shall have received the results of (i) searches of the UCC filings (or equivalent filings) and (ii) tax lien searches, made with respect to the Loan Parties in, with respect to searches in respect of clause (i), the states or other jurisdictions of formation of such Persons and, with respect to searches in respect of clause (ii), such other locations as are satisfactory to the Administrative Agent and the FILO Documentation Agent, together with copies of the financing statements (or, in the case of clause (ii), similar documents) disclosed by such searches.

Corporate Action. All action on the part of the Loan Parties necessary for the valid execution, delivery and performance by the Loan Parties of this Amendment shall have been duly and effectively taken. The Administrative Agent and the FILO Documentation Agent each shall have received such customary corporate resolutions, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party evidencing the authority of each Loan Party to enter into this Amendment and the other Loan Documents to which such Loan Party is a party and the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party on the Third Amendment Effective Date, good standing certificates, other certificates, copies of each Loan Party’s Constituent Documents and other customary corporate documents as the Administrative Agent or the FILO Documentation Agent shall reasonably request.

Opinions of Counsel. The Administrative Agent and the FILO Documentation Agent shall have received a favorable opinion of (i) Latham & Watkins LLP, special counsel to the Borrower with respect to certain matters of federal and New York law and certain routine matters under Delaware law and (ii) Jones Day, Ohio counsel to the Loan Parties.

No Default. After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing.

Borrowing Base Certificate; Availability. The Administrative Agent and the FILO Documentation Agent each shall have received an executed Borrowing Base Certificate

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dated as of the Third Amendment Effective Date, relating to the fiscal month ending January 31, 2023. The Excess Availability under the Amended Credit Agreement on the Third Amendment Effective Date after giving effect to all amounts funded under the Amended Credit Agreement on such date (including the FILO Loans) and all prepayments of the Revolving Loans on the Third Amendment Effective Date, shall be equal to or greater than $120,000,000, based on the Borrowing Base Certificate delivered on the Third Amendment Effective Date.

No Material Adverse Effect. No event shall have occurred after January 29, 2022 that could reasonably be expected to have a Material Adverse Effect on the Loan Parties, taken as a whole.

Fees and Expenses. The Administrative Agent, the FILO Documentation Agent and the Lenders shall have received all applicable fees, including fees under the FILO Fee Letter and the Fee Letter referenced in clause (z)(ii) of the definition of “Fee Letter” in the Credit Agreement and other amounts due and payable on or prior to the Third Amendment Effective Date, including without limitation, to the extent invoiced prior to the Third Amendment Effective Date, reasonable and documented attorneys’ fees of one counsel to the Administrative Agent and one counsel to the FILO Documentation Agent, in connection with or relating to this Amendment, which shall have been reimbursed or paid.

Documents. The Administrative Agent and the FILO Documentation Agent each shall have received such other documents, agreements, or items as the Administrative Agent or the FILO Documentation Agent may reasonably request in order to effectuate, or in connection with, the transactions contemplated hereby.

Without limiting the generality of the provisions Section 11.1 of the Amended Credit Agreement, for purposes of determining compliance with the conditions specified in this Section 4, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent or the FILO Documentation Agent shall have received notice from such Lender prior to the proposed Third Amendment Effective Date specifying its objection thereto.

Confirmation, Ratification and Reaffirmation.

Each of the Loan Parties hereby ratifies and confirms all of its Obligations to the Agents, the Swing Loan Lender, the Issuer, and the Lenders under the Amended Credit Agreement, including, without limitation, the Revolving Loans, Swing Loans, FILO Loans and other Credit Extensions, and each of the Loan Parties hereby affirms its absolute and unconditional promise to pay to the Lenders, the Issuer and the Agents, as applicable, the Revolving Loans, FILO Loans, other Credit Extensions, reimbursement obligations and all other amounts due or to become due and payable to the Lenders, the Issuer, and the Agents, as applicable, under the Amended Credit Agreement and it is the intent of the parties hereto that nothing contained herein shall constitute a novation or accord and satisfaction. Except as expressly amended hereby, the Existing Credit Agreement shall continue in full force and effect. Each of the Loan Parties hereby further (i) ratifies and confirms all of the terms and conditions of each of the documents, instruments and agreements, including those documents, instruments and agreements set forth on Annex D hereto (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Ancillary Loan Documents”) to which it is a party and executed and delivered in connection with the

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Existing Credit Agreement, (ii) acknowledges and agrees that each of the Ancillary Loan Documents (including any schedules thereto) remain in full force and effect, and (iii) reaffirms that, after giving effect to the Amended Credit Agreement, all of its warranties and representations set forth in each of the Ancillary Loan Documents to which it is a party remain true and correct in all material respects as of the Third Amendment Effective Date; provided that, to the extent that such representations and warranties specifically refer to an earlier date, such representations and warranties remain true and correct in all material respects as of such earlier date; provided, further that, any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

Each of the Guarantors hereby acknowledges, confirms and agrees that the Guaranteed Obligations of the Guarantors under, and as defined in, the Guaranty include, without limitation, all Obligations of the Loan Parties at any time and from time to time outstanding under the Amended Credit Agreement.

Without in any manner limiting Section 5(a) above, each Loan Party hereby ratifies and reaffirms its grant of liens on and security interest in any and all Collateral as security for the Obligations arising under or pursuant to and as defined in the Existing Credit Agreement, and confirms and agrees that, after giving effect to the Amended Credit Agreement, such liens and security interests shall continue to secure all Obligations of the Loan Parties at any time and from time to time outstanding under the Amended Credit Agreement and the Ancillary Loan Documents (including, without limitation, the FILO Obligations), as such Obligations have been, and may hereafter be, amended, restated, amended and restated, supplemented, increased or otherwise modified from time to time.

Joinder of FILO Lenders and FILO Documentation Agent. Subject to the satisfaction of the conditions precedent set forth in Section 4 above, each of the FILO Documentation Agent and each FILO Lender hereby:

becomes a party to the Amended Credit Agreement as (i) the FILO Documentation Agent or (ii) a FILO Lender and a Lender, as applicable;

agrees that (i) it shall be bound by all agreements, acknowledgments and obligations, and has all of the rights and benefits, of the FILO Documentation Agent or a FILO Lender, as applicable, under the Amended Credit Agreement and all other applicable Loan Documents and (ii) that it has received and acknowledged the Intercreditor Agreement and agrees to be bound by such agreement;

agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Amended Credit Agreement are required to be performed by it as the FILO Documentation Agent or a FILO Lender, as applicable;

in the case of each FILO Lender, acknowledges and agrees that its FILO Commitment shall be the amount specified for such FILO Lender set forth on Schedule I to the Amended Credit Agreement;

agrees that it will, independently and without reliance upon any Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time,

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continue to make its own credit decisions in taking or not taking action under the Amended Credit Agreement;

in the case of each FILO Lender, irrevocably appoints and authorizes each of the Administrative Agent, the Collateral Agent and the FILO Documentation Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Amended Credit Agreement and the other Loan Documents as are delegated to such Agent by the terms thereof, together with such powers and discretion as are reasonably incidental thereto; and

confirms it has received such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Amendment.

Binding Effect; Integration, Etc. The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their heirs, representatives, successors and assigns. This Amendment and the Amended Credit Agreement shall hereafter be read and construed together as a single document, and all references in the Existing Credit Agreement, any other Loan Document or any agreement or instrument related to the Existing Credit Agreement shall hereafter refer to the Amended Credit Agreement. This Amendment shall constitute a Loan Document.

Multiple Counterparts. This Amendment may be executed in multiple counterparts, each of which shall constitute an original and together which shall constitute but one and the same instrument. Delivery of any executed counterpart of a signature page of this Amendment by telecopy or e-mail shall be effective as delivery of a manually executed counterpart of this Amendment.

Governing Law; Waiver of Jury Trial. EACH PARTY HERETO HEREBY AGREES THAT THE PROVISIONS OF SECTION 12.12 AND SECTION 12.13 OF THE EXISTING CREDIT AGREEMENT SHALL APPLY TO THIS AMENDMENT.

[Signature Pages Follow.]

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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by each of the parties hereto as of the date first above written.

JO-ANN STORES, LLC, as the Borrower

By: _/s/ Scott Sekella
Name: Scott Sekella
Title: Senior Vice President, Chief Financial Officer & Treasurer

NEEDLE HOLDINGS LLC, as Holdings

By: _/s/ Scott Sekella
Name: Scott Sekella
Title: Senior Vice President, Chief Financial Officer & Treasurer

JOANN.COM, LLC, as a Guarantor