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Subsequent Event
6 Months Ended
Nov. 01, 2014
Subsequent Event

(20) Subsequent Event

On December 3, 2014, Morrison, Microsoft, the Company and NOOK Media Inc. entered into agreements pursuant to which Morrison’s interest in NOOK Media was purchased by NOOK Media Inc. and the Microsoft commercial agreement was terminated effective as of such date. Pursuant to the Purchase Agreement (the Purchase Agreement) among the Company, NOOK Media Inc., Morrison, and Microsoft, NOOK Media Inc. purchased from Morrison, and Morrison sold, all of its $300,000 convertible Series A preferred limited liability company interest in NOOK Media in exchange for an aggregate purchase price of $124,850 consisting of (i) $62,425 in cash and (ii) 2,737,290 shares of common stock, par value $.001 per share, of the Company. The Purchase Agreement closed on December 4, 2014. As a condition to closing, the parties entered into a Digital Business Contingent Payment Agreement, pursuant to which Microsoft became entitled to 22.7% of the proceeds from, among other events or transactions, any future dividends or other distributions to NOOK Media Inc. from the Company’s digital business until the date that is three years from the transaction’s closing, subject to a one year extension under certain circumstances, and the sale of the Company’s digital business until the date that is three years from the closing, subject to a one year extension under certain circumstances. As a further condition to closing, the parties entered into a Registration Rights Agreement of Barnes & Noble, Inc., pursuant to which Microsoft became entitled to certain customary registration rights.

On December 3, 2014, Pearson Education in its capacity as a member of NOOK Media consented to the distribution of the Company’s digital business solely to NOOK Media Inc. In connection therewith, the parties entered into a Digital Business Contingent Payment Agreement pursuant to which, subject to certain exceptions, Pearson Education became entitled to 5% of the proceeds from, among other events or transactions, any future dividends or other distributions to NOOK Media Inc. from the Company’s digital business until the date that is three years from the date of closing of the Microsoft transactions described above, subject to a one year extension under certain circumstances, and the sale of the Company’s digital business, subject to certain exceptions, until the date that is three years from the date of closing of the Microsoft transactions described above, subject to a one year extension under certain circumstances.