Nebraska Book Holdings, Inc. Successfully Closes Exchange Offer, Names New CEO

LINCOLN, Neb.--(BUSINESS WIRE)--

Nebraska Book Holdings, Inc. (NBC or the Company)* (OTC Pink: NEEB), a leading source of textbooks and service provider to higher education retailers across the United States, today announced the closing of its previously announced exchange offer relating to its 15.0 percent Senior Secured Notes due 2016. The Company also announced the appointment of Rick Bunka as the Company's president and chief executive officer.

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Under the terms of the transaction, the Company retired certain of its 15.0 percent Senior Secured Notes due 2016 (the "Existing Notes") in exchange for new 2.0 percent Convertible Senior PIK Notes due 2026, as described in the Company's Offering Memorandum dated March 18, 2016, as amended (the "Exchange Offer"). In addition, the Company amended its ABL credit facility to increase availability and to (1) fund privately negotiated repurchases of Existing Notes not tendered in the Exchange Offer, (2) repay in full any remaining Existing Notes and (3) pay professional fees and expenses in connection with the Exchange Offer and related transactions.

"Completion of the Exchange Offer is an important milestone in the transformation of our business. It represents a strong commitment by our lenders and investors to the strategic direction and opportunity of our business," said Bunka. "We now have a clear path to advance our mission of supporting independent college retailers through new, best-in-class technology and innovative managed services capabilities, as well as a vast selection of wholesale textbooks and digital content."

Bunka brings to Nebraska Book Company an experienced business executive and technology leader with over 30 years' experience driving strategic change in the retail and service sectors. He has been serving the Company in a consultative capacity since June 2016 through Point North LLC, a strategic advisory services company he founded in 2013. Bunka succeeds Interim President and Chief Executive Officer Ben Riggsby, who will remain on the Company's Board of Directors. Bunka was also elected to the organization's Board of Directors.

Full details about the close of NBC's Exchange Offer and related restructuring transactions can be found in Appendix A.

Forward-Looking Information is Subject to Risk and Uncertainty
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause the Company's business and results of operations to differ materially from those expressed or implied by such forward-looking statements.

Such forward-looking statements include statements that discuss management's beliefs and assumptions and can be identified by the use of words such as "will," "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "potential," "continue" or the negative of such terms, or other comparable terminology. These forward-looking statements speak only as of the date of this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

Additional information regarding forward-looking statements, as well as additional risks and uncertainties that may affect results and could cause results to differ materially from those expressed in such forward-looking statements, is contained in the Risk Factors section of the Company's Offering Memorandum that was posted on the Company's website on March 18, 2016.

About Nebraska Book Holdings, Inc.
Nebraska Book Holdings, Inc., more commonly known as Nebraska Book Company (NBC), began in 1915 as an independent college bookstore and is now a key resources partner to over 2,000 independent college retailers nationwide. With its strategic business services and technology offerings, including localized e-commerce capabilities, back-end system access and support as well as textbook solutions, Nebraska Book Company is devoted to supporting and strengthening independent higher education retailers across the United States. For more information about Nebraska Book Company, visit www.nebook.com.

*Nebraska Book Holdings, Inc. common stock is not listed, traded or quoted on any U.S. stock exchange but is quoted on the OTC Pink Market under the symbol NEEB.

Appendix A: Disclosure of Exchange Offer Details and Restructuring Transactions

Exchange Offer
The Exchange Offer expired on September 16, 2016, with $83.4 million in aggregate principal amount of the Existing Notes having been validly tendered and not validly withdrawn. In exchange for $83.4 million of Existing Notes and accrued and unpaid premium and interest due on the Existing Notes, the Company issued $100.9 million in aggregate principal amount of New Senior Notes on September 19, 2016.

The New Senior Notes have not been and will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and may not be offered or sold in the United States or for the account or benefit of any United States citizen or in any way distributed in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The New Senior Notes were offered only to accredited investors (as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act) in reliance on Rule 506(c) of Regulation D.

ABL Credit Facility
The Company amended its ABL credit facility on September 19, 2016, to increase the total availability to $98.7 million, consisting of a first lien tranche ("Tranche A Term Loans") and a tranche of term loans ("Tranche B Term Loans"). The Tranche B Term Loans are junior in lien priority to the Tranche A Term Loans. Interest on the Tranche A Term Loans accrues at a rate of 4.0 percent per annum payable in cash plus 4.0 percent per annum payable in kind. Interest on the Tranche B Term Loans accrues at a rate of 5.0 percent per annum payable in cash plus 3.0 percent per annum payable in kind. The Tranche A Term Loans mature on the earlier of (1) four years from the funding of the Tranche A Term Loans, and (2) 90 days prior to the maturity of the Tranche B Term Loans. The Tranche B Term Loans mature on November 13, 2019.

Upon the completion of the amendment, the Company borrowed under the ABL credit facility to (1) fund privately negotiated repurchases of Existing Notes not tendered in the Exchange Offer, (2) repay in full any remaining Existing Notes and (3) pay professional fees and expenses in connection with the Exchange Offer and related transactions. After giving effect to the additional borrowings, a total of $91.4 million was outstanding under the ABL credit facility. Upon completion of the repurchases and the repayment of the Existing Notes, no Existing Notes remained outstanding. Any additional borrowings under the ABL credit facility may only be made at the discretion of the lenders thereunder.

Senior Term Loan
As part of the restructuring, on September 19, 2016, a newly formed subsidiary of the Company entered into a new $28.2 million senior term loan with funds managed by MAST Capital Management, LLC ("MAST"). The proceeds of the new senior term loan were used to acquire the purchased loan participation, as described below. The new senior term loan matures on September 19, 2020, and bears interest at a rate per annum equal to 6.0 percent, which may be paid in kind at the Company's option for a period of two years from the closing date.

Purchased Loan Participation
The Company entered into a purchased loan participation agreement with funds managed by MAST to acquire participation interests in term loans of Sonifi Solutions, Inc. ("Sonifi") on September 19, 2016. The principal amount of Sonifi loans purchased was $60.0 million, at a purchase price of $0.47 per dollar of original principal amount. The Company used the proceeds from its new senior term loan to acquire the Sonifi loans. In connection with the purchased loan participation agreement, the Company granted a first lien security interest in the participation interest to the senior term loan lenders and a second lien security interest in the participation interest to the ABL credit facility lenders. Under the terms of the participation agreement, the Company will receive full economic participation rights with respect to the purchased loans as well as certain voting rights.

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