Exhibit 10.36
OMNIBUS AMENDMENT NO. 1
TO
AMENDED AND RESTATED GUARANTEE AGREEMENT
AND
RULES OF USAGE AND DEFINITIONS
THIS OMNIBUS AMENDMENT NO. 1 TO AMENDED AND RESTATED GUARANTEE
AGREEMENT AND RULES OF USAGE AND DEFINITIONS (the "Amendment") is entered into
as of the 15th day of July, 1998 by and between PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent on behalf of the Lenders, and BORDERS GROUP, INC., a
Delaware corporation (the "Company"), BORDERS, INC., a Colorado corporation,
XXXXXX BOOK COMPANY, INC., a Colorado corporation, WALDENBOOKS PROPERTIES, INC.,
a Delaware corporation, BORDERS PROPERTIES, INC., a Delaware corporation, PLANET
MUSIC, INC., a North Carolina corporation, BORDERS OUTLET, INC., a Colorado
corporation, THE LIBRARY, LTD., a Missouri corporation, BORDERS ONLINE, INC., a
Delaware corporation, BORDERS FULFILLMENT, INC., a Delaware corporation, and BGP
(UK) LIMITED, a United Kingdom corporation (collectively with the Company, the
"Guarantors").
WITNESSETH:
WHEREAS, the Guarantors and the Administrative Agent have entered
into that certain Amended and Restated Guarantee Agreement dated as of November
22, 1995 and amended and restated as of October 17, 1997 (the "Guarantee
Agreement"; terms used but not defined herein shall have the same meanings as
are set forth in Appendix A (Rules of Usage and Definitions) to the Guarantee
Agreement ("Rules of Usage and Definitions")); and
WHEREAS, the Guarantors have requested that the Lenders amend
certain provisions of the Guarantee Agreement, and the Lenders are willing to do
so on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Lenders and the Guarantors hereby agree as follows:
1. Amendments to Agreement. Subject to the satisfaction of the conditions
precedent set forth in Section 3 below, the Guarantee Agreement is amended as
follows:
a. The definition of "Domestic Subsidiary" in the Rules of Usage and
Definitions is hereby deleted and replaced in its entirety by the following:
"Domestic Subsidiary shall mean individually and Domestic
Subsidiaries shall mean collectively, except as otherwise
expressly provided in Section 12.04(j) of the Guarantee
Agreement, any Subsidiary of any Borrower organized under
the laws of any state of the United States of America for
the purpose of doing business primarily in the Untied
States of America."
b. Clause (i) of the definition of "Permitted Investments" in the
Rules of Usage and Definitions is hereby deleted and replaced in its entirety by
the following:
"(i) Investments in direct obligations of the United
States of America or, with respect to Foreign
Subsidiaries, of the central government of the applicable
jurisdiction, or any agency thereof, maturing in twelve
months or less from the date of acquisition thereof and
which are backed by the full faith and credit of the
United States of America or such other applicable
jurisdiction, as aforesaid, provided that such direct
obligations of any central government other than the
United States of America or of any agency of any central
government other than the United States of America have
ratings of at least A-1 by S&P or P-1 by Xxxxx'x, or the
equivalent thereof, on the date of acquisition;"
c. Clause (iii) of the definition of "Permitted Investments" in the
Rules of Usage and Definitions is hereby amended by inserting after the phrase
"commercial bank" the following:
"organized under the laws of the United States of America
or any state thereof"
d. The definition of "Permitted Investments" in the Rules of Usage
and Definitions is hereby amended by adding the following new clause (vi):
"(vi) demand deposits, time deposits or certificates of
deposit maturing within one year issued by any commercial
bank organized under the laws of any jurisdiction other
than the United States of America or any state thereof and
whose short-term deposit rating at the time of such
Investment is either of the two (2) highest ratings then
accorded by Xxxxx'x or another comparable rating service."
e. Clause (ii) of the definition of "Permitted Restricted Subsidiary Activity"
in the Rules of Usage and Definitions is hereby deleted and replaced in its
entirety by the following:
"(ii) any Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary, or
Indebtedness of the Company or any Unrestricted Subsidiary
which is a Domestic Subsidiary constituting reimbursement
obligations under letters of credit, relating to operating
leases executed, as lessee, by a non-wholly owned
Restricted Subsidiary, provided, that, the portion of such
Contingent Obligations and Indebtedness which constitutes
current liabilities determined and consolidated in
accordance with GAAP is limited to operating lease
payments (whether such amounts are fixed or percentage
rent, fees, costs, accelerated payment requirements or
otherwise) not in excess of an aggregate of $15,000,000 in
any Fiscal Year with respect to all non-wholly owned
Restricted Subsidiaries."
f. The definition of "Wholly-owned Subsidiary" in the Rules of Usage
and Definitions is hereby deleted and replaced in its entirety by the following:
"Wholly-owned Subsidiary shall mean individually and
Wholly-owned Subsidiaries shall mean collectively any
Subsidiary of the Company of which all of the outstanding
voting equity interests and substantially all of the
equity interests are owned by the Company (whether
directly or through one or more Wholly-owned Subsidiaries
of the Company).
g. Section 12.01(j) of the Guarantee Agreement is hereby deleted and
replaced in its entirety by the following:
"(j) unsecured Indebtedness of Foreign Subsidiaries with
an aggregate principal Dollar Equivalent amount
outstanding not to exceed (A) $10,000,000 in the first or
second Fiscal Quarter or (B) $20,000,000 in the third or
fourth Fiscal Quarter; or unsecured Indebtedness of one
Foreign Subsidiary to another Foreign Subsidiary;"
h. Section 12.03(j) of the Guarantee Agreement is hereby deleted and
replaced in its entirety by the following:
"(j) Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary in
respect of all obligations of any Unrestricted Subsidiary
which is a Foreign Subsidiary or any wholly owned
Restricted Subsidiary which is a Foreign Subsidiary, other
than operating lease obligations, subject to Section
12.20;"
i. Section 12.03(k) of the Guarantee Agreement is hereby deleted and
replaced in its entirety by the following:
"(k) Contingent Obligations of the Company or any
Unrestricted Subsidiary which is a Domestic Subsidiary in
respect of operating lease obligations of any Unrestricted
Subsidiary which is a Foreign Subsidiary or any wholly
owned Restricted Subsidiary which is a Foreign Subsidiary;
provided that the portion of all such Contingent
Obligations which constitutes current liabilities
determined and consolidated in accordance with GAAP is
limited to lease payments
(whether such amounts are fixed or percentage rent, fees,
costs, accelerated payments or otherwise) not in excess of
an aggregate of $50,000,000 in any Fiscal Year with
respect to all Unrestricted Subsidiaries which are Foreign
Subsidiaries and wholly owned Restricted Subsidiaries
which are Foreign Subsidiaries; and"
j. Section 12.04(j) of the Guarantee Agreement is hereby deleted and
replaced in its entirety by the following:
"(j) Investments constituting Permitted Joint Venture
Activities, provided no Event of Default or Potential
Default has occurred and is continuing or would result
therefrom and subject to Section 12.20, and for purposes
of this Section 12.04(j) the reference to "Domestic
Subsidiary" in the definition of Permitted Joint Venture
Activity shall include any Subsidiary organized under the
laws of Canada or any province thereof."
k. Clause (i) of Section 12.20 of the Guarantee Agreement is hereby deleted and
replaced in its entirety by the following:
"(i) incur any Contingent Obligation permitted under
Sections 12.03(i) or (j), or"
l. Section 12.20 of the Guarantee Agreement is hereby amended by
adding to the end of such section the following:
"For purposes of this Section 12.20, the term "Foreign
Joint Venture" shall not include any such corporation,
partnership, limited liability company, joint venture or
other entity organized under the laws of Canada or any
province thereof."
2. Conditions of Effectiveness. The amendments to the Guarantee Agreement
contained in Section 1 shall become effective when and only when each of the
conditions specified in clauses (a) and (b) below has been satisfied:
a. no Event of Default or Potential Default shall have occurred and
be continuing on the date hereof or on the date the Amendment becomes effective
and the representations and warranties made in the Guarantee Agreement and in
Section 3 hereof shall be true and correct on the date hereof and on the date
the Amendment becomes effective and the Guarantors shall have delivered to the
Administrative Agent for the benefit of the Lenders an officer's certificate to
both such effects executed by an Authorized Officer;
b. the Administrative Agent shall have received the following
documents, each document being in form and substance satisfactory to the
Administrative Agent:
(1) written Approval Memos from the Required Banks;
(2) this Amendment, duly executed by each Guarantor;
(3) the officer's certificate referenced in clause
a. above; and
(4) such instruments, agreements and other items as
the Administrative Agent may request.
3. Representation and Warranties. Each of the Guarantors represents and
warrants as follows: (i) it has all necessary power and authority to execute and
deliver this Amendment and to perform its obligations hereunder; (ii) the
execution, delivery and performance of this Amendment have been duly authorized
by it; (iii) this Amendment and the Guarantee Agreement, as amended hereby,
constitute the legal, valid and binding obligations of such Guarantor and are
enforceable against such Guarantor in accordance with their terms; and (iv) the
approval, execution, delivery and performance of the terms hereof and of the
Guarantee Agreement, as amended hereby, do not violate any contractual provision
to which it is a party or by which it is or its properties are bound or any Law
applicable to it.
4. Reference to the Effect on the Guarantee Agreement.
a. (i) Each reference in the Guarantee Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import shall mean
and be a reference to the Guarantee Agreement as amended hereby and (ii) each
reference to the Guarantee Agreement in all other Operative Documents shall mean
and be a reference to the Guarantee Agreement, as amended hereby.
b. Except as specifically amended above, the Guarantee Agreement
shall remain in full force and effect and are hereby ratified and confirmed.
c. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as an amendment to any
provision of the Guarantee Agreement nor a waiver of any right, power or remedy
of any Lender or Agent, nor constitute a waiver of, or consent to any departure
from, any provision of the Guarantee Agreement.
5. Governing Law. This Amendment shall be governed by and construed in
accordance with the internal laws (as opposed to conflicts of law provisions) of
the State of New York.
6. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
7. Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of a duly executed counterpart copy of this Amendment may
be made by telecopy.
8. Expenses. The Guarantors will upon demand pay to each of the Agents the
amount of any and all expenses, including the reasonable fees and expenses of
each Agent's attorneys (which attorneys may be an Agent's employees to the
extent agreed to in advance by the Guarantors) which any such Agent may incur in
connection with the preparation, negotiation and enforcement of this Amendment
and each of the agreements, instruments and other documents to be delivered to
the Agents or the Lenders in connection herewith.
AMENDMENT NO. 1
IN WITNESS WHEREOF, this Amendment has been duly executed as of the
day and year first above written.
PNC BANK, NATIONAL ASSOCIATION, as
Administrative Agent acting on behalf of
the Lenders
By:
Title:
BORDERS GROUP, INC.
BORDERS, INC.
XXXXXX BOOK COMPANY, INC.
BORDERS PROPERTIES, INC.
WALDENBOOKS PROPERTIES, INC.
PLANET MUSIC, INC.
BORDERS OUTLET, INC.
THE LIBRARY, LTD.
By:
Title:
BORDERS ONLINE, INC.
By:
Title:
BORDERS FULFILLMENT, INC.
By:
Title:
BGP (UK) LIMITED
By:
Title:
