EXHIBIT 10.61
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENTS
Amendment No. 1 to Note Purchase Agreements (this "Amendment") dated as of
July 30, 2004, among BORDERS GROUP, INC., a Michigan corporation (the
"Company"), and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, TIAA-CREF
LIFE INSURANCE COMPANY, JEFFERSON-PILOT LIFE INSURANCE COMPANY, JEFFERSON PILOT
LIFEAMERICA INSURANCE COMPANY, THE TRAVELERS INSURANCE COMPANY, THE TRAVELERS
LIFE AND ANNUITY COMPANY, PRIMERICA LIFE INSURANCE COMPANY and ALLSTATE LIFE
INSURANCE COMPANY (each a "Purchaser" and, collectively, the "Purchasers").
RECITALS
A. Under and pursuant to the separate and several Note Purchase
Agreements each dated as of July 30, 2002 (the "Note Purchase Agreements"),
between the Company and each of the Purchasers, the Company has issued and sold
to the Purchasers $50,000,000 aggregate principal amount of its 6.31% Senior
Guaranteed Notes due July 30, 2006 (the "Notes").
B. Under and pursuant to that certain Multicurrency Revolving Credit
Agreement dated as of June 21, 2002 (as heretofore amended, the "Prior Credit
Agreement"), among the Company, the Subsidiaries party thereto, the lenders
listed on Schedule 1 thereto, PNC Bank National Association, as administrative
agent, Fleet National Bank, as syndication agent, Wachovia Bank, National
Association, as co-syndication agent, Bank One, NA (Main Office Chicago), as
documentation agent with Fleet Securities, Inc. and Wachovia Securities having
acted as co-arrangers (said Credit Agreement, as heretofore amended, the "Prior
Credit Agreement"), the aforesaid lenders have extended to the Company and such
Subsidiaries a revolving line of credit on the terms and conditions provided
therein.
C. Under and pursuant to that certain Amended and Restated
Multicurrency Revolving Credit Agreement dated as of July 30, 2004 (the "Credit
Agreement"), by and among the Company, the Subsidiaries party thereto, the
lending institutions listed on Schedule 1 thereto, Fleet Retail Group, Inc., as
a swingline lender and as administrative agent and as collateral agent for
itself and such other lending institutions, XX Xxxxxx Xxxxx Bank and Xxxxx Fargo
Retail Finance, each as co-syndication agent for itself and such other lending
institutions, General Electric Capital Corporation and National City Business
Credit, Inc., as co-documentation agent for itself and such other lending
institutions and Fleet National Bank, as an issuing bank thereunder, with Bane
of America Securities LLC and JPMorgan Securities Inc. having acted as co-lead
arrangers, (1) the Prior Credit Agreement was amended, restated, superceded and
replaced with the Credit Agreement, (2) the aforesaid lenders extended to the
Company and such Subsidiaries a revolving line of credit on the terms and
conditions provided therein and the loans made and outstanding under the Prior
Credit Agreement were continued under the Credit Agreement and (3) the Company
and certain of the Subsidiaries party thereto have agreed to grant the
Collateral Agent (as defined in the Intercreditor Agreement described below),
for the benefit of the lenders and the agents party to the Credit Agreement, a
first priority lien in all right, title and interest of the Company and such
Subsidiaries in the Collateral (as defined in the Intercreditor Agreement
described below), whether now owned or hereafter acquired.
D. Under and pursuant to Sections 10.6, 10.7 and 11 of the Note
Purchase Agreements, the grant of a lien by the Company or its Subsidiaries on
any of their assets or property in favor of the lenders and/or the agents under
the Credit Agreement or any other creditor would be prohibited and would
constitute an Event of Default. In consideration for the Purchasers' consent to
the granting of a lien with respect to the Collateral and the other amendments
provided herein, the Company and each of the Security Guarantors (as defined in
Section 1.6 hereof) have agreed to grant a first priority lien in the Collateral
in favor of the Collateral Agent for the ratable benefit of the Purchasers and
each of the lenders and agents party to the Credit Agreement.
E. The liens granted by the Company and each Security Guarantor in the
Collateral in favor of the Collateral Agent shall be for the ratable benefit of
and shall rank pari passu (the "Pari Passu Lien") among each of the Purchasers
and each of the lenders and agents party to the Credit Agreement (collectively,
the "Secured Parties").
F. The Pari Passu Lien shall be granted pursuant to the Security
Agreement, which is substantially in the form attached hereto as Exhibit A.
G. The terms pursuant to which the Secured Parties will share such Pari
Passu Lien shall be set forth in a Collateral Agency and Intercreditor
Agreement, which is substantially in the form attached hereto as Exhibit B.
H. Under and pursuant to the Guaranty Agreement, the Guarantors have
unconditionally guaranteed the obligations of the Company in connection with the
issuance of the Notes. As a condition precedent to amending the Note Purchase
Agreements, the Purchasers have required the Guarantors to acknowledge and
consent to this Amendment and have further required the Security Guarantors to
pledge certain of their assets to the Collateral Agent to secure the payment of
the Notes and the performance by such Security Guarantors of their obligations
under the Guaranty Agreement and, desiring to help secure financing for the
Company which will result in direct or indirect benefits to each of the
Guarantors, the Guarantors have agreed to acknowledge and consent to this
Amendment and the Security Guarantors have agreed to pledge certain of their
assets pursuant to the Security Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the receipt whereof is hereby
acknowledged, the Company and the Purchasers agree that the Note Purchase
Agreements are hereby amended in the following respects:
SECTION 1. AMENDMENTS TO NOTE PURCHASE AGREEMENTS.
Section 1.1. Section 1 of the Note Purchase Agreements is hereby amended
by adding two new paragraphs at the end thereof reading in their entirety as set
forth below:
"As an inducement to you entering into Amendment No. 1 to Note
Purchase Agreements, the Company has executed and delivered or will cause
to be executed and delivered, or simultaneously with the execution and
delivery of Amendment No. 1 to Note Purchase Agreements will execute and
deliver, and the Notes, together with all
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other Obligations (as defined in the Intercreditor Agreement described
below), will be secured by, the Security Agreement dated as of July 30,
2004 (the "Security Agreement") from the Company and each Security
Guarantor to Fleet Retail Group, Inc., as collateral agent (the
"Collateral Agent"), pursuant to which the Company and each Security
Guarantor shall grant a security interest (which shall be a pari passu,
first priority, perfected security interest) in the collateral defined
therein to the Collateral Agent for the benefit of the holders of the
Notes, which Security Agreement will be substantially in the form attached
to Amendment No. 1 to Note Purchase Agreements as Exhibit A.
In addition, pursuant to that certain Collateral Agency and
Intercreditor Agreement dated as of July 30, 2004 (the "Intercreditor
Agreement") among the Company, the Security Guarantors, the Collateral
Agent and the Secured Parties, which shall be substantially in the form
attached to Amendment No. 1 to Note Purchase Agreements as Exhibit B, the
Collateral Agent and the Secured Parties have agreed, among other things,
to share in the manner set forth therein the proceeds arising from the
disposition of Collateral of the Company and each Security Guarantor
subject to the Security Agreement."
Section 1.2. Section 5.20 of the Note Purchase Agreements is hereby
amended and restated reading in its entirety as set forth below:
"Section 5.20. First Priority Security Interest; Pari Passu
Obligations.
(a) The Notes. The Notes are secured by a first priority security
interest and lien in the Collateral of the Company and rank pari passu
with the obligations of the Company owed to the Lenders under the Credit
Agreement.
(b) The Guaranty Agreement. The obligations of the Security
Guarantors under the Guaranty Agreement are secured by a first priority
security interest and lien in the Collateral of such Security Guarantors
and rank pari passu with the obligations of such Security Guarantors owed
to the Lenders under the Credit Agreement. The obligations of each other
Guarantor under the Guaranty Agreement ranks equally and ratably with all
unsecured and unsubordinated obligations of each of such Guarantor
generally, but subject to the right of any Person having secured or
preferred rights, whether such rights arise by contract, statute, law (or
the operation thereof) or otherwise."
Section 1.3. A new Section 7.4 is hereby added to the Note Purchase
Agreements reading in its entirety as set forth below:
"Section 7.4. Other Reports. The Company shall provide to each
holder of Notes, concurrently with the delivery of such reports to the
Administrative Agent under the Credit Agreement, the reports required to
be delivered to the Administrative Agent pursuant to Sections 8.9.2 and
8.9.3 of the Credit Agreement."
Section 1.4. A new sentence is hereby added to the end of Section 8.1 of
the Note Purchase Agreements reading in its entirety as set forth below:
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"If amounts are to be applied to the principal of the Notes pursuant
to the terms of the Intercreditor Agreement, such principal amount
together with interest owing thereon to the prepayment date pursuant to
the Intercreditor Agreement and the Make-Whole Amount, if any, with
respect to such principal amount of each Note shall be due and payable on
such date."
Section 1.5. Section 8.4 of the Note Purchase Agreements is hereby amended
and restated to read in its entirety as set forth below:
"Section 8.4. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to Section 8.2 (except in the
case of any prepayment under Section 7.4 of the Intercreditor Agreement),
the principal amount of the Notes to be prepaid shall be allocated among
all of the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof."
Section 1.6. Section 9.6 of the Note Purchase Agreements is hereby amended
and restated reading in its entirety as set forth below:
"Section 9.6. Security.
(a) Security Agreement. The Company will execute and deliver to each
holder of Notes, in connection with the closing of Amendment No. 1 to Note
Purchase Agreements, the Security Agreement, pursuant to which the Company
will grant and maintain a first priority pari passu security interest in
the Collateral (as defined in the Security Agreement) to the Collateral
Agent for the ratable benefit of the Secured Parties. Notwithstanding the
foregoing, in the event that the Company is no longer obligated to any
Lender pursuant to the Credit Agreement or any guarantee thereof or any
other Indebtedness directly or indirectly as an obligor, guarantor or
otherwise and (x) no Default or Event of Default exists or would exist
immediately after such release, and (y) the release of the Company would
not result in a Material Adverse Effect, the holders of the Notes hereby
agree to instruct the Collateral Agent to release the Company from its
obligations under the Security Agreement pursuant to terms and conditions
reasonably satisfactory to the Required Holders.
(b) Guaranty Agreement and Collateral. The Company hereby covenants
and agrees that, if any Domestic Subsidiary which is not a Guarantor (i)
guarantees the Company's obligations under the Credit Agreement, (ii)
becomes an obligor under the Credit Agreement or (iii) directly or
indirectly guarantees any Indebtedness or other obligations of the
Company, it will cause such Domestic Subsidiary to enter into a joinder
agreement substantially in the form of the joinder agreement set forth as
Annex 1 to the Guaranty Agreement and acceptable in form and substance to
the Required Holders for the benefit of the holders of the Notes, together
with a completed closing certificate substantially in the form of Annex 2
to the Guaranty Agreement and a favorable legal opinion of counsel as to
the due authorization, execution, delivery, legality, validity and
enforceability thereof, and that such guaranty agreement does not violate
or conflict with any law or governing document relating to the Company or
such Domestic Subsidiary. Notwithstanding the foregoing, in the event that
any Guarantor is no longer obligated to
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any Lender pursuant to the Credit Agreement or any guarantee thereof or
any other Indebtedness directly or indirectly as an obligor, guarantor or
otherwise and (x) no Default or Event of Default exists or would exist
immediately after such release, and (y) the release of such Guarantor
would not result in a Material Adverse Effect, the holders of the Notes
hereby agree to release such Guarantor from its obligations under the
Guaranty Agreement pursuant to terms and conditions reasonably
satisfactory to the Required Holders.
Further, the Company will cause each Domestic Subsidiary that
pledges any assets as security to support the Company's or any
Subsidiary's obligations under the Credit Agreement (each such Domestic
Subsidiary is herein referred to as a "Security Guarantor") to execute and
deliver to each holder of the Notes, in connection with the closing of
Amendment No. 1 to Note Purchase Agreements, the Security Agreement,
pursuant to which such Domestic Subsidiary will grant and maintain a first
priority pari passu security interest in the Collateral to the Collateral
Agent for the ratable benefit of the Secured Parties. After the closing of
Amendment No. 1 to Note Purchase Agreements, the Company will further
cause any of its other Domestic Subsidiaries to execute and deliver to
each holder of the Notes, at such time that any such Domestic Subsidiary
pledges its assets to the Lenders, a supplement to the Security Agreement
pursuant to which such Domestic Subsidiary will grant and maintain a first
priority pari passu security interest in such assets to the Collateral
Agent for the ratable benefit of the Secured Parties. The Company will
also cause such Domestic Subsidiary at the time of delivering any such
supplement to the Security Agreement to deliver a favorable legal opinion
of counsel as to the due authorization, execution, delivery, legality,
validity and enforceability thereof, that such Security Agreement does not
violate or conflict with any law or governing document relating to such
Domestic Subsidiary, and that such Security Agreement creates a valid and
perfected security interest in the collateral being granted in favor of
the Collateral Agent for the ratable benefit of the Secured Parties.
Notwithstanding the foregoing, in the event that any Domestic Subsidiary
is no longer obligated to any Lender pursuant to the Credit Agreement or
any guarantee thereof or any other Indebtedness directly or indirectly as
an obligor, guarantor or otherwise and (x) no Default or Event of Default
exists or would exist immediately after such release, and (y) the release
of the Company would not result in a Material Adverse Effect, the holders
of the Notes hereby agree to instruct the Collateral Agent to release such
Domestic Subsidiary from its obligations under the Security Agreement
pursuant to terms and conditions reasonably satisfactory to the Required
Holders.
Section 1.7. Section 9.7 of the Note Purchase Agreements is hereby amended
and restated reading in its entirety as set forth below:
"Section 9.7. First Priority Security Interest; Pari Passu Ranking.
Subject to Section 9.6, the Company's obligations under the Notes and this
Agreement will at all times be secured by a first priority security
interest and lien in the Collateral of the Company and the Security
Guarantors and rank at least pari passu with the obligations of the
Company owed to the Lenders under the Credit Agreement."
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Section 1.8. A new Section 9.8 is hereby added to the Note Purchase
Agreements reading in its entirety as set forth below:
"Section 9.8. Further Assurances. At the written request of the
Collateral Agent or any holder of Notes, the Company will, and will cause
each Security Guarantor to, at no expense to the Collateral Agent or any
holder of Notes, do, execute, acknowledge and deliver all and every
further acts, deeds, conveyances, transfers and assurances reasonably
necessary or proper for (i) the perfection and maintenance of the security
interests and pledges being provided for pursuant to the Security
Documents, (ii) carrying out the purposes of this Agreement, the Other
Agreements, the Notes and each Security Document and (iii) better assuring
the rights of the holders of the Notes under this Agreement, the Other
Agreements, the Notes and each Security Document."
Section 1.9. Subparagraphs (e), (i) and (k) of Section 10.7 of the Note
Purchase Agreements are each hereby amended and restated respectively to read in
their entirety as set forth below:
"(e) Liens existing on the date of this Agreement and securing the
Indebtedness of the Company and its Subsidiaries referred to in Schedule
5.15 and Liens securing obligations of the Company and the Security
Guarantors under, or arising in connection with, this Agreement, the Other
Agreements, the Guaranty Agreement, the Credit Agreement and the other
Loan Documents (as defined in the Credit Agreement) to which each is a
party on a pari passu basis (so long as the Intercreditor Agreement shall
remain in effect and each Lender under the Credit Agreement is a party to
the Intercreditor Agreement);
(i) Liens on assets of Foreign Subsidiaries securing Indebtedness
permitted pursuant to paragraph (c) of the Definition of Priority Debt;
(k) if and so long as no Default or Event of Default exists
hereunder, including, without limitation under Section 10.6, Liens on
assets other than Collateral securing Indebtedness of the Company or any
Subsidiary in addition to those described in clauses (a) through (i)
above;"
Section 1.10. Subparagraph (a) of Section 10.8 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:
"(a) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company or such Subsidiary as an
entirety, as the case may be, shall be a solvent corporation and, in the
case of the Company or any Guarantor, organized and existing under the
laws of the United States or any State thereof (including the District of
Columbia) or, in the case of any Guarantor which is not organized in the
United States, under the laws of such Guarantor's jurisdiction of
organization, and, in the case of any such transaction involving the
Company or a Guarantor, if the Company or such Guarantor is not such
corporation, (i) such corporation shall have executed and delivered to
each holder of any Notes its assumption of the due and punctual
performance and
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observance of each covenant and condition of this Agreement, the Other
Agreements, the Security Documents and the Notes in the case of a
successor to the Company, and the Guaranty Agreement and the Security
Documents in the case of a successor to any Guarantor and (ii) shall have
caused to be delivered to each holder of any Notes an opinion of
nationally recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof; and"
Section 1.11. The last sentence of Section 10.8 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:
"No such conveyance, transfer or lease of substantially all of the assets
of the Company or such Subsidiary shall have the effect of releasing the
Company or such Subsidiary or any successor corporation that shall
theretofore have become such in the manner prescribed in this Section 10.8
from its liability under this Agreement, the Other Agreements, the
Guaranty Agreement, the Security Documents or the Notes to which it is a
party."
Section 1.12. Subparagraph (d) of Section 11 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:
"(d) the Company or any Security Guarantor defaults in the
performance of or compliance with any term contained herein or in the
Security Documents (other than those referred to in paragraphs (a), (b)
and (c) of this Section 11) and such default is not remedied within 30
days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company or any Security Guarantor
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to refer
specifically to this paragraph (d) of Section 11); or"
Section 1.13. Subparagraph (e) of Section 11 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:
"(e) any representation or warranty made in writing by or on behalf
of the Company or any Guarantor or by any officer of the Company or any
Guarantor in this Agreement, the Guaranty Agreement, any Security Document
or in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any material
respect on the date as of which made; or"
Section 1.14. A new Subparagraph (m) is hereby added to Section 11 of the
Note Purchase Agreements to read in its entirety as set forth below:
"(m) any Security Document shall at any time after its execution and
delivery cease to be in full force and effect, or any such Security
Document shall be declared null and void, or the validity or
enforceability thereof shall be contested by the grantor thereof."
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Section 1.15. Section 16 of the Note Purchase Agreements is hereby amended
and restated to read in its entirety as set forth below:
"SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein, in Amendment
No. 1 to Note Purchase Agreements, in the Guaranty Agreement and in the
Security Documents shall survive the execution and delivery of this
Agreement, the Notes, Amendment No. 1 to Note Purchase Agreements, the
Guaranty Agreement, the Security Documents, the purchase or transfer by
you of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or
any other holder of a Note. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company or any
Subsidiary pursuant to this Agreement, Amendment No. 1 to Note Purchase
Agreements, the Guaranty Agreement or any Security Document shall be
deemed representations and warranties of the Company or such Subsidiary
under this Agreement. Subject to the preceding sentence, this Agreement
(as amended by Amendment No. 1 to Note Purchase Agreements), the Guaranty
Agreement, the Security Documents and the Notes embody the entire
agreement and understanding between you, the Company and the Subsidiaries
party thereto and supersede all prior agreements and understandings
relating to the subject matter hereof."
Section 1.16. Subclause (z) of clause (viii) of the second sentence of
Section 20 of the Note Purchase Agreements is hereby amended and restated to
read in its entirety as set forth below:
"(z) if an Event of Default has occurred and is continuing, to the
extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the
rights and remedies under your Notes, this Agreement and the Security
Documents."
Section 1.17. Schedule B to the Note Purchase Agreements is hereby amended
by adding thereto (in proper alphabetical order) the following definitions
reading in their entirety as set forth below:
"Amendment No. 1 to Note Purchase Agreements" means that certain
Amendment No. 1 to Note Purchase Agreements dated as of July 30, 2004
entered into among the Company and each of the Purchasers specified in
Schedule A.
"Intercreditor Agreement" is defined in Section 1.
"Secured Parties" means, collectively, each of the Purchasers and
each of the Lenders.
"Security Agreement" is defined in Section 1.
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"Security Documents" means the Intercreditor Agreement, the Security
Agreement, any supplement to the Security Agreement contemplated by
Section 9.6(b), and any other agreement, document or instrument entered
into by the Company and/or any Subsidiary providing security for the
Notes.
"Security Guarantor" is defined in Section 9.6(b).
Section 1.18. The definition of "Credit Agreement" set forth in Schedule B
to the Note Purchase Agreements is hereby amended and restated to read in its
entirety as set forth below:
"Credit Agreement" means that certain Amended and Restated
Multicurrency Revolving Credit Agreement, as may be further amended,
modified, supplemented, refinanced or replaced from time to time, dated as
of July 30, 2004, by and among the Company, the Subsidiaries party
thereto, the lending institutions listed on Schedule 1 thereto, Fleet
Retail Group, Inc., as a swingline lender and as administrative agent and
as collateral agent for itself and such other lending institutions, XX
Xxxxxx Xxxxx Bank and Xxxxx Fargo Retail Finance, each as co-syndication
agent for itself and such other lending institutions, General Electric
Capital Corporation and National City Business Credit, Inc., each as a
co-documentation agent for itself and such other lending institutions and
Fleet National Bank, as an issuing bank thereunder, with Banc of America
Securities LLC and JPMorgan Securities Inc. having acted as co-lead
arrangers; which such Amended and Restated Multicurrency Revolving Credit
Agreement amended, restated, replaced and superceded the Multicurrency
Revolving Credit Agreement dated as of June 21, 2002, among the Company,
the Subsidiaries party thereto, the lenders listed on Schedule 1 thereto,
PNC Bank National Association, as administrative agent, Fleet National
Bank, as syndication agent, Wachovia Bank, National Association, as
co-syndication Agent, Bank One, NA (Main Office Chicago), as documentation
agent with Fleet Securities, Inc. and Wachovia Securities having acted as
co-arrangers.
Section 1.19. The definition of "Lender" set forth in Schedule B to the
Note Purchase Agreements is hereby amended and restated to read in its entirety
as set forth below:
"Lender" means the lenders and the agents under the Credit
Agreement.
Section 1.20. The definition of "Material Adverse Effect" set forth in
Schedule B to the Note Purchase Agreements is hereby amended and restated to
read in its entirety as set forth below:
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries, taken as a whole, or (b) the ability
of the Company or any Subsidiary party thereto to perform its obligations
under this Agreement, the Other Agreements, the Guaranty Agreement, any
Security Document or the Notes, or (c) the validity or enforceability of
this Agreement, the Other Agreements, the Guaranty Agreement, any Security
Document or the Notes.
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Section 1.21. The definition of "Permitted Investments" set forth in
Schedule B to the Note Purchase Agreements is hereby amended by (a) deleting
"Al" and "PI" appearing in clause (f) thereof and substituting "A2" and "P2"
therefor, respectively, and (b) deleting "AA" and "Aa2" appearing in clause (i)
thereof and substituting "A" and "A2" therefor, respectively.
Section 1.22. The definition of "Priority Debt" set forth in Schedule B to
the Note Purchase Agreements is hereby amended and restated to read in its
entirety as set forth below:
"Priority Debt" means the sum, without duplication, of (i)
Indebtedness of the Company or any Subsidiary secured by Liens not
otherwise permitted by clauses (a) through (j) of Section 10.7; and (ii)
all other Indebtedness of all Subsidiaries that are not Guarantors other
than:
(a) Indebtedness of any Subsidiary outstanding on the date of
Closing and any extension, renewal or refunding thereof, provided
that the principal amount thereof is not increased;
(b) Indebtedness of any Subsidiary owed to the Company or a
Wholly-Owned Subsidiary;
(c) Indebtedness of any Foreign Subsidiary not otherwise
described in clauses (a) or (b) above in an amount not to exceed the
sum of (i) $30,000,000 plus (ii) the amount permitted under the
"Foreign Sublimit" (as defined in the Credit Agreement); and
(d) Indebtedness under the Credit Agreement, this Agreement
and the Other Agreements to the extent that all such Indebtedness is
secured on a pari passu basis.
SECTION 2. CONDITIONS TO EFFECTIVENESS.
This Amendment shall not be effective until (i) the Company and the
holders of 51% in aggregate principal amount of the outstanding Notes shall have
executed and delivered this Amendment and each of the Guarantors has executed
and delivered its Consent hereto, (ii) each Purchaser shall have received from
Xxxxxxxxx Xxxxxx, PLLC, Special Counsel for the Company, its legal opinion with
respect to the Company and the Security Guarantors, dated the effective date of
this Amendment, in form and substance reasonably satisfactory to each Purchaser
and special counsel to the Purchasers, covering the matters set forth in Exhibit
C attached hereto, (iii) each Purchaser shall have received from the Company a
certificate dated the effective date of this Amendment, signed by the Senior
Vice President and Chief Financial Officer of the Company, to the effect that
the representations and warranties of the Company set forth in Exhibit D
attached hereto are true and correct on and with respect to the effective date
of this Amendment, (iv) the Company shall have paid all of the out-of-pocket
expenses incurred by the Purchasers in connection with the consummation of the
transactions contemplated by this Amendment, including, without limitation, the
fees and disbursements of Xxxxxxx and
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Xxxxxx LLP, special counsel to the Purchasers and (v) the Company shall have
also satisfied each of the following closing conditions:
1. Each of the Intercreditor Agreement (as described in Section
1.1 hereof) and the Security Agreement (as described in Section 1.1
hereof) shall have been duly executed, acknowledged and delivered by the
respective parties thereto and shall be in full force and effect.
2. The Company and the Lenders shall have entered into the Credit
Agreement and each Purchaser shall have received a copy of the Credit
Agreement, with all amendments thereto, certified as true and correct by
an authorized officer of the Company.
3. The Collateral Agent and each holder of the Notes shall have
received reasonably satisfactory evidence that the Collateral is insured
against fire and other casualties at replacement cost, together with
standard mortgage clauses naming the Collateral Agent (for the benefit of
the holders of the Notes) as mortgagee or secured party. The Collateral
Agent and each holder of the Notes shall also have received reasonably
satisfactory original certificates of general public liability insurance,
naming each holder of a Note as an additional insured. All premiums on
such policies shall be prepaid by the Company.
4. All actions shall have been taken at the Company's expense as
are necessary and appropriate for the holders of the Notes and the Lenders
to maintain a valid and perfected first priority lien and security
interest in and to the collateral detailed in the Security Agreement,
including, without limitation, the filing and recording of such documents
and Uniform Commercial Code financing statements as may be necessary and
appropriate.
5. All proceedings taken in connection with the transactions
contemplated by this Amendment, and all documents necessary to the
consummation thereof, shall be reasonably satisfactory in form and
substance to you and your special counsel, and you shall have received a
copy (executed or certified as may be appropriate) of all legal documents
or proceedings taken in connection with the consummation of said
transactions (including, without limitation, approving resolutions duly
adopted by the respective Board of Directors of the Company and each
Security Guarantor and accompanied by a certificate by the Secretary or
Assistant Secretary of the Company and each Security Guarantor stating
that such resolutions are true and correct, have not been altered or
repealed and are in full force and effect).
6. As of the effective date of this Amendment (after giving
effect to the amendments contemplated hereby), no Default or Event of
Default shall have occurred and be continuing.
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SECTION 3. MISCELLANEOUS.
Section 3.1. This Amendment shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of Michigan excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
Section 3.2. This Amendment may be executed in any number of counterparts,
each executed counterpart constituting an original but all together only one
agreement.
Section 3.3. Except to the extent hereby amended, the Note Purchase
Agreements are in all respects hereby ratified, confirmed and approved.
Section 3.4. The capitalized terms used in this Amendment shall have the
respective meanings specified in the Note Purchase Agreements unless otherwise
herein defined or the context hereof shall otherwise require.
Section 3.5. Any and all notices, requests, certificates and other
instruments, including the Notes, may refer to the "Note Purchase Agreement" or
the "Note Purchase Agreement dated July 30, 2002" without making specific
reference to this Amendment, but nevertheless all such references shall be
deemed to include this Amendment unless the context shall otherwise require.
-12-
Section 3.6. This Amendment and all covenants herein contained shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto. All covenants made by the Company herein shall survive
the closing and the delivery of this Amendment.
BORDERS GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President, Finance
and Chief Financial Officer
The foregoing is hereby agreed to
as of the date first written above.
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By /s/ XXXX XXXXXXXX
-------------------------------------
Name: XXXX XXXXXXXX
Title: DIRECTOR
TIAA-CREF LIFE INSURANCE COMPANY
By: Teachers Insurance and Annuity
Association of America, as Investment
Manager
By /s/ XXXX XXXXXXXX
-------------------------------------
Name: XXXX XXXXXXXX
Title: DIRECTOR
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By /s/ Xxxxx X. XxXxxxxx
----------------------------------
Name: Xxxxx X. XxXxxxxx, Xx.
Title: Vice President
JEFFERSON PILOT LIFEAMERICA INSURANCE
COMPANY
By /s/ Xxxxx X. XxXxxxxx
----------------------------------
Name: Xxxxx X. XxXxxxxx, Xx.
Title: Vice President
THE TRAVELERS INSURANCE COMPANY
By /s/ XXXXXX XXXXXX
----------------------------------
Name: XXXXXX XXXXXX
Title: INVESTMENT OFFICER
THE TRAVELERS LIFE AND ANNUITY COMPANY
By /s/ XXXXXX XXXXXX
----------------------------------
Name: XXXXXX XXXXXX
Title: INVESTMENT OFFICER
PRIMERICA LIFE INSURANCE COMPANY
By /s/ XXXXXX XXXXXX
----------------------------------
Name: XXXXXX XXXXXX
Title: INVESTMENT OFFICER
ALLSTATE LIFE INSURANCE COMPANY
By /s/ XXXXXXX XXXXXX
-------------------------------
Name: XXXXXXX XXXXXX
Title: AUTHORIZED SIGNATORY
By /s/ XXXXX XXXXXX
-------------------------------
Name: XXXXX X. XXXXXXX
Title: AUTHORIZED SIGNATORY
CONSENT TO AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENTS
The undersigned hereby acknowledges receipt of a counterpart original of,
and consents to, the foregoing Amendment No. 1 to Note Purchase Agreements dated
as of July 30, 2004 and the Security Agreement and the Intercreditor Agreement
described therein.
The undersigned hereby ratifies and confirms in all respects its
obligations under its Guaranty Agreement dated July 30, 2002 in favor of the
holders of the Notes.
This Consent to Amendment No. 1 to Note Purchase Agreements is furnished
for good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged by the undersigned, and the undersigned understands and
intends that the Purchasers will rely on the foregoing and that the undersigned
will be legally bound by the foregoing. This Consent to Amendment No. 1 to Note
Purchase Agreements shall inure to the benefit of the Purchasers and their
respective successors and assigns.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Consent to Amendment No. 1 to Note Purchase Agreements as of July 30, 2004,
pursuant to proper authority duly granted.
BORDERS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
and Treasurer
XXXXXX BOOK COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
and Treasurer
PLANET MUSIC, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
BORDERS PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
WALDENBOOKS PROPERTIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
BORDERS ONLINE, LLC
By: Borders, Inc., its sole Member
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
BORDERS OUTLET, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
BORDERS FULFILLMENT, INC.
BY: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Chief Financial Officer
THE LIBRARY, LTD.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
BGP (UK) LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
BORDERS ONLINE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President and
Treasurer
FORM OF SECURITY AGREEMENT
EXHIBIT A
(to Amendment No. 1 to Note Purchase Agreements)
FORM OF INTERCREDITOR AGREEMENT
EXHIBIT B
(to Amendment No. 1 to Note Purchase Agreements)
DESCRIPTION OF OPINION OF COMPANY COUNSEL
The opinion of Xxxxxxxxx Xxxxxx, PLLC, Special Counsel for the Company,
with respect to the Company and each Security Guarantor, which is called for by
Section 1 of Amendment No. 1 to Note Purchase Agreements, shall be dated the
effective date of Amendment No. 1 to Note Purchase Agreements and addressed to
the Purchasers, shall be reasonably satisfactory in scope and form to the
Purchasers and shall be to the effect that:
(1) The Company is a corporation, duly incorporated, legally
existing and in good standing under the laws of the State of Michigan, has
corporate power and authority and is duly authorized to enter into and
perform Amendment No. 1 to Note Purchase Agreements, the Security
Agreement and the Intercreditor Agreement;
(2) Each Guarantor is a corporation, duly incorporated, legally
existing and in good standing under the laws of its jurisdiction of
incorporation, has corporate power and authority and is duly authorized to
enter into and perform its obligations under its Consent to Amendment No.
1 to Note Purchase Agreements dated as of July __, 2004 (each a "Consent")
and under each of the Security Agreement and the Intercreditor Agreement
to which it is a party;
(3) Each of Amendment No. 1 to Note Purchase Agreements, the
Security Agreement and the Intercreditor Agreement has been duly
authorized, executed and delivered by the Company and constitutes the
legal, valid and binding contract and agreement of the Company enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(4) Each of the Consents, the Security Agreement and the
Intercreditor Agreement has been duly authorized, executed and delivered
by each Guarantor which is a party thereto and constitutes the legal,
valid and binding contract and agreement of such Guarantor enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law);
(5) No approval, consent or withholding of objection on the part
of, or filing, registration or qualification with, any governmental body,
Federal, state or local, is necessary in connection with the execution and
delivery of Amendment No. 1 to Note Purchase Agreements, the Security
Agreement, the Intercreditor Agreement or the Consents;
(6) The execution, delivery and performance by the Company of
Amendment No. 1 to Note Purchase Agreements, the Security Agreement and
the Intercreditor Agreement does not conflict with or result in any breach
of any of the provisions of or constitute a default under or result in the
creation or imposition of any Lien (other than the Lien created by the
Security Agreement) upon any of the property of the Company
EXHIBIT C
(to Amendment No. 1 to Note Purchase Agreements)
pursuant to the provisions of the Articles of Incorporation or By-laws of
the Company or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company may be bound;
(7) The execution, delivery and performance by each Guarantor of
each of the Security Agreement and the Intercreditor Agreement to which
such Guarantor is a party does not conflict with or result in any breach
of any of the provisions of or constitute a default under or result in the
creation or imposition of any Lien (other than the Lien created by the
Security Agreement) upon any of the property of such Guarantor pursuant to
the provisions of the [Articles/Certificate] of Incorporation or By-laws
of such Guarantor or any agreement or other instrument known to such
counsel to which such Guarantor is a party or by which such Guarantor may
be bound; and
(8) The Security Agreement and/or financing statements or similar
notices with respect thereto have been filed for record or recorded in all
public offices where in such filing or recordation is necessary to perfect
the Lien in the Collateral (as defined in the Security Agreement) as
against creditors of and purchasers from the Company, and each Security
Guarantor. The Security Agreement creates a valid and perfected Lien in
the Collateral in favor of Fleet Retail Group, as Collateral Agent, for
the benefit of the holders of the Notes and the Lenders.
The opinion of Xxxxxxxxx Xxxxxx, PLLC shall cover such other matters
relating to Amendment No. 1 to Note Purchase Agreements, the Security Agreement
and the Intercreditor Agreement as the Purchasers may reasonably request,
including, without limitation, that such opinion may be relied upon by
subsequent holders of the Notes. With respect to matters of fact on which such
opinion is based, such counsel shall be entitled to rely on appropriate
certificates of public officials and officers of the Company and each Guarantor.
C-2
REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to each holder of any Note
that:
1. The Company is a corporation, duly organized, legally
existing, and in good standing under the laws of the State of Michigan,
and is duly qualified as a foreign corporation and in good standing in all
other states wherein the nature of its business or its assets make such
qualification necessary.
2. The Company's execution and delivery of the Amendment No. 1 to
Note Purchase Agreements, the Security Agreement and the Intercreditor
Agreement and performance of its obligations hereunder and thereunder: (a)
are and will be within its corporate powers; (b) are duly authorized by
the Company's board of directors; (c) are not and will not be in
contravention of any law, statute, rule or regulation, the terms of the
Company's Articles of Incorporation or bylaws, nor of any preferred stock
provision, indenture, agreement or undertaking to which the Company or any
of its properties are bound; (d) do not require any consent or approval
(including governmental) which has not been given; and (e) will not result
in the imposition of Liens, charges or encumbrances on any of its
properties or assets, except those in favor of the holders of the Notes
and the Lenders.
3. The Amendment No. 1 to Note Purchase Agreements, the Security
Agreement and the Intercreditor Agreement, when duly executed and
delivered, will constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their respective terms.
4. All balance sheets, income statements and other financial data
which have been furnished to any holder of a Note by the Company to induce
such holder of a Note to enter into the Amendment No. 1 to Note Purchase
Agreements do fairly represent the Company's financial condition as of the
dates for which the same are furnished. All such financial statements,
reports, papers and other data furnished to any holder of a Note are
accurate and correct in all material respects and complete insofar as
completeness may be necessary to give such holder of a Note a true and
accurate knowledge of the subject matter. Since the date of such financial
statements, no material adverse change has occurred in the operations or
condition, financial or otherwise, of the Company, nor has the Company
incurred since December 31, 2003, any material liabilities or made any
material investment or guarantees, direct or contingent, in any single
case or in the aggregate.
5. The Company is the true and lawful owner of the assets pledged
pursuant to the terms of the Security Agreement.
6. As of the date of the execution and delivery of the Amendment
No. 1 to Note Purchase Agreements, all filings, assignments, pledges and
deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Collateral Agent's security interest in the
Collateral. The Collateral Agent's rights with respect to the Collateral
are
EXHIBIT D
(to Amendment No. 1 to Note Purchase Agreements)
not subject to any setoff, claims, withholdings or other defenses. The
Company or a Security Guarantor party to one of the Security Documents is
the owner of the Collateral free from any Lien.
7. All of the Company's representations and warranties set forth
in Section 5 of the Note Purchase Agreements are true and correct on and
as of the effective date hereof with the same effect as though made and
repeated by the Company as of the effective date hereof.
8. (a) Neither the Company nor any of its Subsidiaries (i) is a
blocked person described in Section 1 of Executive Order 13224 of the
September 23, 2001 Blocking Property and Prohibiting Transaction With
Persons Who Commit and Threaten to Commit, or Support Terrorism (66 Fed.
Reg. 49049 (2001)) or (ii) engages in any dealings or transactions, or is
otherwise associated, with any such blocked person and (b) the Company and
its Subsidiaries are in compliance, in all Material respects, with the USA
Patriot Act of 2001 (signed into law October 26, 2001).
C-2
