SCHOOL SPECIALTY, INC. (OTCMKTS:SCHSQ) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

On April7, 2017, the Company entered into a Loan Agreement (the
Term Loan Agreement) among the Company, as borrower, certain of
its subsidiaries, as guarantors, the financial parties party
thereto, as lenders (the Term Loan Lenders) and TCW Asset
Management Company LLC, as the agent. Under the Term Loan
Agreement, the Term Loan Lenders agreed to make a term loan (the
Term Loan) to the Company in aggregate principal amount of $140
million. The initial Term Loan draw at closing was $110 million.
These proceeds, along with proceeds received from a draw on the
ABL Agreement (as defined below), were used to repay the Companys
previous term loan which had a remaining principal balance
including accrued interest of $118.2 million. The Term Loan
Agreement provides for a delayed draw feature that allows the
Company to draw up to an additional $30 million through April7,
2019. The ability to access the delayed draw commitment is
subject to maintaining compliance with certain terms and
conditions. The proceeds from the delayed draw term loan can be
used to fund distributions, permitted acquisitions, and
repayments of existing indebtedness. At the Companys option, the
Term Loan interest rate will be either the prime rate or the
LIBOR rate, plus an applicable margin based on the Companys net
senior leverage ratio. The Company may specify the interest rate
period of one, three or six months for interest on loans under
the Term Loan Agreement bearing interest based on the LIBOR rate.
Initially, the Term Loan will bear interest at a rate of one
month LIBOR plus 625 basis points for the 2017 fiscal year.

The Term Loan matures on April7, 2022. In addition to scheduled
quarterly principal repayments, commencing June30, 2017, the Term
Loan Agreement requires prepayments at specified levels upon the
Companys receipt of net proceeds from certain events,
includingbut not limited to certain asset dispositions,
extraordinary receipts, and the issuance or sale of any
indebtedness or equity interests (other than permitted issuances
or sales). The Term Loan Agreement also requires prepayments at
specified levels from the Companys excess cash flow. The Company
is also permitted to voluntarily prepay the Term Loan in whole or
in part. All prepayments of the loans will be applied first to
that portion of the loans comprised of prime rate loans and then
to that portion of loans comprised of LIBOR rate loans. The Term
Loan Agreement contains customary events of default and
financial, affirmative and negative covenants, including but not
limited to quarterly financial covenants commencing with the
fiscal quarter ending July1, 2017 relating to the Companys fixed
charge coverage ratio and net senior leverage ratio, and an
annual limitation on capital expenditures and product development
investments, collectively.

to a Guarantee and Collateral Agreement dated as of April7, 2017
(the Term Loan Security Agreement), the Term Loan is secured by a
first priority security interest in substantially all assets of
the Company and the subsidiary guarantors. Under an intercreditor
agreement (the Intercreditor Agreement) between the Term Loan
Lenders and the ABL Lenders (as defined below), the Term Loan
Lenders have a second priority security interest in substantially
all working capital assets of the Company and the subsidiary
guarantors, subordinate only to the first priority security
interest of the Asset-Based Lenders in such assets, and a first
priority security interest in all other assets.

Also on April7, 2017, the Company entered into the Third
Amendment to Loan Agreement (the ABL Agreement) among the
Company, certain of its subsidiary borrowers, Bank of America,
N.A. and Bank of Montreal as lenders (the ABL Lenders), and Bank
of America, N.A., as agent for the ABL Lenders (the ABL
Amendment). The ABL Amendment provided a new lower pricing tier
of LIBOR plus 125 basis points, a seasonal increase in the
borrowing base of 5.0% of eligible accounts receivable

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for the months of March through August, and the inclusion of
certain inventory in the borrowing base, which previously had
been excluded. Additionally, certain conforming changes were made
in connection with the entry into the Term Loan Agreement. The
ABL Amendment extends the maturity of the ABL Agreement to
April7, 2022 (ABL Termination Date), provided that the ABL
Termination Date will automatically become February7, 2022 unless
the Term Loan Agreement has been repaid, prepaid, refinanced,
redeemed, exchanged, amended or otherwise defeased or discharged
prior to such date.

to an Amended and Restated Guarantee and Collateral Agreement
dated as of April7, 2017 (the ABL Security Agreement), the Loan
Agreement is secured by a first priority security interest in
substantially all assets of the Company and the subsidiary
borrowers. Under the Intercreditor Agreement, the ABL Lenders
have a first priority security interest in substantially all
working capital assets of the Company and the subsidiary
borrowers, and a second priority security interest in all other
assets, subordinate only to the first priority security interest
of the Term Loan Lenders in such other assets.

Total fees incurred with respect to the Term Loan and ABL
Amendment were estimated to be approximately $4 million,
collectively.

The Term Loan Agreement, the Term Loan Security Agreement, the
ABL Amendment and the ABL Security Agreement are filed as
exhibits herewith and incorporated herein by reference. The
foregoing descriptions of the Term Loan Agreement, the Term Loan
Security Agreement, the ABL Amendment and the ABL Security
Agreement do not purport to be complete and are qualified in
their entirety by the full text of such agreements.

In connection with the entry into the Term Loan Agreement, the
Credit Agreement, dated June11, 2013, by and among School
Specialty, Inc. and certain of its subsidiaries, as borrowers,
certain lenders party thereto, and Credit Suisse AG, as
Administrative Agent and Collateral Agent, was terminated on
April7, 2017.

(d) Exhibits

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About SCHOOL SPECIALTY, INC. (OTCMKTS:SCHSQ)

School Specialty, Inc. (SSI) is a distributor of supplies, furniture, technology products, supplemental learning products (instructional solutions) and curriculum solutions, primarily to the education marketplace. The Company provides educators with its own products and services, from basic school supplies to classroom designs, including science, reading, language and math teaching materials, as well as planning and development tools. Its segments include Distribution, which offers products that include basic classroom supplies and office products, supplemental learning materials, physical education equipment, classroom technology, planning and student development, coordinated school health and furniture, and Curriculum, which is a PreK-12 curriculum-based publisher of products in the categories of science and reading and literacy. Through its distribution network across the nation, SSI provides its customers with access to a range of third-party brands across its business segments.

SCHOOL SPECIALTY, INC. (OTCMKTS:SCHSQ) Recent Trading Information

SCHOOL SPECIALTY, INC. (OTCMKTS:SCHSQ) closed its last trading session at 0.0016 with shares trading hands.