Document:

exv10w37

 

Exhibit 10.37

SEPARATION AGREEMENT AND GENERAL RELEASE

     Borders Group, Inc., its affiliates, subsidiaries, divisions, successors and assigns and the
past, present and future employees, officers, shareholders, directors, agents, attorneys and
insurers thereof, both individually and in their official capacities (collectively referred to
throughout this Separation Agreement and General Release as “Borders Group”) and Vincent Altruda
(referred to throughout this Separation Agreement and General Release as “Altruda” and more
specifically defined in paragraph 5) agree that:

     1. Separation from Employment. This Separation Agreement and General Release
(“Agreement”) is made by Borders Group and Altruda based on Altruda’s separation of employment with
Borders Group effective February 2, 2007 (the “Effective Date”).

     2. Consideration. In consideration for signing this Agreement and
compliance with the promises made herein, Borders Group agrees that Altruda: (a) will continue to
receive his current salary through the Effective Date; (b) subject to the mitigation and revocation
provisions set forth below, as well as the provisions of paragraph 10 of the Executive Agreement
dated August 1, 2006, will receive as severance pay, twelve (12) months salary and bonus being
eighty-four thousand three hundred seventy-five dollars ($84,375.00) per month (thirty-eight
thousand nine hundred forty-two dollars and thirty-one cents ($38,942.31) per normal pay period for
twenty-six (26) periods) for the twelve (12) month period following the Effective Date minus, in
each case, the amount of applicable withholding taxes; and (c) a cash payment as soon as
practicable following Altruda’s separation from Borders Group, in an amount equal to the fair
market value of the restricted shares (but not the restricted share units) awarded to Altruda in
March 2006. The fair market value of the restricted shares shall be based upon the closing price
of Borders Group, Inc.’s shares on the New York stock Exchange on the day prior to Altruda’s
termination date. The amount of severance described in (b) above shall be reduced by the amount
that Altruda receives from other employment during the twelve (12) month period. Altruda agrees to
make reasonable efforts to seek other employment, and to immediately notify Borders Group if he
accepts other employment and the amounts received therefrom. Except for the payments described in
(a), (b) and (c) above, Altruda shall not be entitled to any payments of any nature whatsoever from
Borders Group.

     3. No Consideration Absent Execution of this Agreement. Borders Group and
Altruda acknowledge and agree that, prior to the signing of this Agreement, Altruda did not have a
contract for employment for any definite period of time. As such Altruda understands and agrees
that Borders Group would not be obligated to employ him through the Effective Date and he would not
be eligible for the payments provided for herein except for his execution of this Agreement.

     4. Revocation. Altruda may revoke this Agreement for a period of seven days
following the day he executes this Agreement. Any revocation within this period must be submitted,
in writing, to Borders Group and state, “I hereby revoke my acceptance of the Agreement.” The
revocation must be personally delivered to Daniel Smith or his designee, or mailed to Daniel Smith
and postmarked within seven days of execution of this Agreement. This Agreement shall not become
effective or enforceable until the revocation period has expired. If the last day of the
revocation period is a Saturday, Sunday, or legal holiday in Michigan, then
the revocation period shall not expire until the next following day which is not a Saturday,
Sunday, or legal holiday.

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     5. General Release of Claims. Altruda knowingly and voluntarily releases
and forever discharges Borders Group of and from any and all claims, known and unknown, against
Borders Group, which Altruda, his heirs, executors, administrators, successors, and assigns
(referred to collectively throughout this Agreement as “Altruda”) have or may have as of the date
of execution of this Agreement, including, but not limited to, any alleged violation of:

	 	•	 	The National Labor Relations Act, as amended;
	 
	 	•	 	Title VII of the Civil Rights Act of 1964, as amended;
	 
	 	•	 	The Civil Rights Act of 1991;
	 
	 	•	 	Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
	 
	 	•	 	The Employee Retirement Income Security Act of 1974, as amended;
	 
	 	•	 	The Immigration Reform Control Act, as amended;
	 
	 	•	 	The Americans with Disabilities Act of 1990, as amended;
	 
	 	•	 	The Age Discrimination in Employment Act of 1967, as amended;
	 
	 	•	 	The Occupational Safety and Health Act, as amended;
	 
	 	•	 	The Fair Credit Reporting Act;
	 
	 	•	 	The Family and Medical Leave Act of 1933;
	 
	 	•	 	The Equal Pay Act, as amended;
	 
	 	•	 	The Worker Adjustment and Retraining Notification Act, as amended;
	 
	 	•	 	The Michigan Elliot-Larsen Civil Rights Act;
	 
	 	•	 	The Michigan AIDS Testing and Confidentiality Act;
	 
	 	•	 	The Michigan Persons with Disabilities Civil Rights Act, as amended;
	 
	 	•	 	The Michigan Equal Pay Law;
	 
	 	•	 	The Michigan Comp. Laws Ann. “Whistleblowers Protection Act” provision
(sec. 15-361-15.369);
	 
	 	•	 	The Michigan Comp. Laws Ann. “Workers’ Compensation: Retaliation”
provision (sec. 418.301(11) and (12));
	 
	 	•	 	Any other federal, state or local civil or human rights law or any
other local, state or federal law, regulation or ordinance;
	 
	 	•	 	Any public policy, contract, tort, or common law; or
	 
	 	•	 	Any allegation for costs, fees or other expenses including attorneys’
fees incurred in these matters.
	 
	 	•	 	Any claims arising from or related to tax obligations to any payment
made hereunder, including but not limited to any acceleration of income or social
insurance taxes, or increase in income taxes, or interest and penalties imposed
with respect to any of his severance benefits (as determined under the guidance
issued under Section 409A including, but not limited to, the plan aggregation rules
under Section 409A).

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Without limiting the generality of the foregoing, Altruda hereby releases any and all claims he may
have against Borders Group pertaining in any way to his employment with Borders Group or the
termination thereof, whether known or unknown at the time of this Agreement, and Altruda assumes
the risk that he might subsequently discover claims or causes of action which are presently unknown
to him. Accordingly, Altruda voluntarily agrees that this release extends to all claims, whether
known to him or unknown, existing at the time of this Agreement.

Notwithstanding the foregoing or any other provision of this Agreement, Altruda is not waiving or
releasing any benefits to which he may be entitled under the Borders Group Savings Plan or any
medical or other welfare benefit plan of Borders Group.

     6. Altruda’s Acknowledgment of Tax Liability. Altruda hereby acknowledges and agrees
as follows: (a) nothing in this Agreement constitutes tax advice; (b) Borders Group does not take
any responsibility, or have any liability to Altruda with respect to his tax liability and/or his
personal tax reporting; (c) Altruda has been given the opportunity and encouraged to consult with
his own attorney and to seek professional tax advice prior to execution of this Agreement; and (d)
Altruda agrees to indemnify Borders Group and hold it harmless from any liability for income taxes,
interest or penalties that may be imposed as a result of under-payment or non-payment of taxes on
any amounts paid Altruda under the terms of this Agreement.

     7. Affirmations. Altruda affirms that he has not filed, caused to be filed, or
presently is a party to any claim, complaint, or action against Borders Group in any forum or form.
Altruda further affirms that he has been paid and has received all leave (paid or unpaid),
vacation pay, compensation, wages and bonuses to which he may be entitled and that no other leave
(paid or unpaid), vacation pay, compensation, wages or bonuses are due to him, except as provided
in this Agreement. Employee furthermore affirms that he has no known workplace injuries or
occupational diseases; and has been provided and/or has not been denied any leave requested under
the Family and Medical Leave Act.

     8. Confidentiality and Return of Property. Altruda agrees that he will maintain in
strict confidence and will not, directly or indirectly, divulge, transmit, publish, release or
otherwise use or cause to be used in any manner, any confidential information relating to Borders
Group, including but not limited to, clients, customers, proprietary knowledge and trade secrets,
research, business plans, business methods, operating procedures or programs, merchandising
strategies, pricing strategies, sales and financial information, technology, software systems,
operations, processes, computer programs and data bases, records, development data and reports,
store designs, quality control specifications, cost analysis, flow charts, know-how, employee
lists, customer lists, supplier lists, marketing data, personnel data, or any other information of
like nature. Altruda acknowledges that all information regarding Borders Group compiled or obtained
by, or furnished to, him in connection with his employment or association with Borders Group is
confidential information and Borders Group’s exclusive property. Upon demand by Borders Group,
Altruda will surrender to Borders Group all original and facsimile records, documents and data in
his possession pertaining to Borders Group. The foregoing covenant of confidentiality has no
temporal, geographical or territorial limitation.

     9. Confidentiality of this Agreement. Altruda agrees that he will maintain in strict
confidence and will not, directly or indirectly, divulge, transmit, publish, release or otherwise

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disclose, the terms of this Agreement except to his spouse, domestic partner (as defined by Borders
Group Inc. benefits plans), tax advisor and an attorney with whom Altruda chooses to consult
regarding his consideration of this Agreement, provided that said individuals agree to be bound by
the terms of this Confidentiality Clause and Altruda agrees to be liable for any breach by them.

     10. Non-Disparagement. Altruda agrees not to defame, disparage or demean Borders
Group in any manner whatsoever.

     11. Discontinuance of Severance Payments. Altruda agrees that any right to receive
severance payments hereunder will cease if, during the one-year period following his termination of
employment, he directly or indirectly becomes an employee, director, advisor of, or otherwise
affiliated with, any other entity or enterprise whose business is in competition with the business
of Borders Group.

     12. Enforcement. The parties agree that in the event any dispute arises relating to
or arising out of this Agreement such dispute will be resolved through arbitration conducted by the
American Arbitration Association in Ann Arbor, Michigan. The parties further agree that the award
in such arbitration will be binding and enforceable pursuant to the Michigan Arbitration Act and
the Federal Arbitration Act. This section will not restrict Borders Group’s right of equitable
relief in a court of law having competent jurisdiction for any breach or violation of any duty owed
or obligation of non-disparagement, confidentiality, non-competition, or duty loyalty owed by
Altruda to Borders Group.

     13. Governing Law and Interpretation. This Agreement shall be governed and conformed
in accordance with the laws of the State of Michigan without regard to its conflict of laws
provision. Should any provision of this Agreement be declared illegal or unenforceable by any
court of competent jurisdiction or arbitrator/arbitration panel, and cannot be modified to be
enforceable, excluding the general release language, such provision shall immediately become null
and void, leaving the remainder of this Agreement in full force and effect.

     14. No Admission of Wrongdoing. Altruda agrees that neither this Agreement nor the
furnishing of the consideration for this Release shall be deemed or construed at anytime for any
purpose as an admission by Borders Group of any liability or unlawful conduct of any kind.

     15. Amendment. This Agreement may not be altered, modified or changed
except upon express written consent of both parties wherein specific reference is made to this
Agreement.

     16. Entire Agreement; Termination of Prior Agreements. This Agreement sets forth the
entire agreement between the parties hereto, and fully supersedes any prior written or oral
agreements or understandings between the parties, which are hereby terminated and of no further
force and effect, including but not limited to prior employment agreement(s), with the exception of
the provisions set forth in paragraph 10 of the Executive Agreement dated August 1, 2006 (a copy of
which is attached hereto). Altruda acknowledges that he has not relied on any representations,
promises, or agreements of any kind made to him in connection with his decision to sign this
Agreement, except for those referenced in this paragraph.

     ALTRUDA HAS BEEN ADVISED IN WRITING THAT HE HAS AT LEAST TWENTY ONE (21) CALENDAR
DAYS TO CONSIDER THIS AGREEMENT, IN WHICH YOU WAIVE IMPORTANT RIGHTS, INCLUDING THOSE UNDER THE AGE
DISCRIMINATION IN

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EMPLOYMENT ACT OF 1967. WE ADVISE YOU TO CONSULT WITH AN ATTORNEY PRIOR TO
EXECUTION OF THIS AGREEMENT.

     ALTRUDA AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT DO NOT
RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY ONE (21) DAY CONSIDERATION PERIOD.

     HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO
RECEIVE THEREBY THE SUMS AND BENEFITS SET FORTH IN PARAGRAPH “2” ABOVE, ALTRUDA FREELY AND
KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND
RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST BORDERS GROUP.

IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement as of the
date set forth below:

	 	 	 	 	 
	 	/S/ VINCENT ALTRUDA

—————————————————————

               Vincent Altruda

Date: February 2, 2007                                               

BORDERS GROUP, INC.

 	 
	 	By:  	/S/ DAN SMITH                                               
 	 
	 	 	 	 
	 	Date:  February 2, 2007                                               
	 

5exv10w31

 

Exhibit 10.31

			
	 	 	 
	US $375,000.00
	 	December 19, 2006

BRIDGE LOAN

PROMISSORY NOTE

(Non-Negotiable)

     FOR VALUE RECEIVED, the undersigned, Remote Knowledge, Inc., a Delaware corporation
(“Maker”), promises to pay to the order of Robert D. Duncan, or any successor holder of
this Note (“Holder”), at Holders office, or such other place as Holder may designate, the
principal amount of Three Hundred Seventy-five Thousand Dollars ($375,000).

     1. Security. Payment of this note and interest is secured by 3 shares of issued, fully paid
and outstanding common stock of the Maker for each one dollar ($1.00) of principal amount, One
Million One Hundred Twenty-five Thousand shares (1,125,000). Such shares are fully paid issued and
outstanding and are owned by certain members and affiliated entities of the Granader family, and
shall be accompanied by executed stock powers. Such shares shall be held in trust by Holder, and
upon payment of the principal Holder shall release all such shares.

     2. Interest. As soon as practical after delivery of this Note to Holder and transfer of funds
to Maker, Maker shall deliver to Holder One Hundred Twenty-five Thousand shares (125,000) of
common stock of Maker issued in the name of Holder as interest. Holder shall be entitled to retain
all such shares regardless whether the Note may be prepaid. At the end of each month following
default in payment of principle and continuing until principle is paid in full, Forty-one Thousand
Six Hundred Sixty-seven shares (41,667) of Makers common stock shall be transferred to Holder from
the shares held as security, as additional interest.

     3. Payments. All outstanding principal shall be payable on June 19, 2007 (the “Maturity
Date”).

     4. Guaranty. Payment of this Note is and shall be guaranteed by this performance pledge (the
“Guaranty”) by Alan Granader and Dan Granader (the “Guarantors”). This Guaranteed
Promissory Note is an absolute, continuing, irrevocable, and unconditional guaranty of payment and
performance, and not a guaranty of collection, and Maker shall remain liable on its obligations
hereunder until the payment in full of the principal and interest (the “Guaranteed
Obligations”).

          (a) In the event of default by Maker in payment of the Guaranteed Obligations, or any
part thereof, when such Guaranteed Obligations are due to be paid or performed by Maker, the
Guarantors shall promptly pay the Guaranteed Obligations then due in full without notice or demand,
and it shall not be necessary for Holder, in order to enforce such payment by the Guarantors, to
institute suit or exhaust its remedies against Maker or others. THE GUARANTORS HEREBY IRREVOCABLY
AGREE THAT, UNTIL PAYMENT IN FULL TO HOLDER OF THE GUARANTEED OBLIGATIONS, THE GUARANTORS SHALL
HAVE NO RIGHT TO RECOVER FROM MAKER ANY CLAIMS THE GUARANTORS HAVE OR MIGHT HAVE AGAINST MAKER (AS
SUCH TERM “CLAIM” IS DEFINED IN THE UNITED STATES BANKRUPTCY CODE 11 U.S.C. § 101[5] AS AMENDED
FROM TIME TO TIME) IN CONNECTION WITH PAYMENTS MADE BY OR ON BEHALF OF THE GUARANTORS TO HOLDER
UNDER THIS GUARANTY INCLUDING, WITHOUT IMPLIED LIMITATION, ALL RIGHTS THE GUARANTORS MAY NOW OR
HEREAFTER HAVE UNDER ANY AGREEMENT OR AT LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, ANY LAW
SUBROGATING THE GUARANTORS TO THE RIGHTS OF HOLDER) TO ASSERT ANY CLAIM AGAINST OR SEEK
CONTRIBUTION, INDEMNIFICATION OR ANY OTHER FORM OF REIMBURSEMENT FROM MAKER OR ANY OTHER PARTY
LIABLE FOR PAYMENT OF ANY OR ALL OF THE INDEBTEDNESS.

          (b) If acceleration of the time for payment by Maker of all or any portion of the
indebtedness is stayed upon the insolvency, bankruptcy, or reorganization of Maker, the Guaranteed
Obligations shall nonetheless be payable by the Guarantors hereunder forthwith on demand by Holder.

     5. Prepayment. Maker may pay all or any part of the principal owing on this Note at any time
or times prior to maturity without payment of any premium or penalty.

     6. Default. Each of the following events shall constitute an event of default (“Event of
Default”) and Holder, in addition to any remedies available to it at law or in equity, shall
thereupon have the option to declare Maker in default under this Note and declare due all
obligations of Maker to Holder (it also being understood that the occurrence of any of the Events
of Default set forth in subsections (c) or (d) automatically shall constitute an Event of Default
and cause an immediate acceleration of Maker’s indebtedness to Holder):

 

 

          (a) the failure of Maker to make any payment required hereunder when due;

          (b) default by Maker in the performance or observance of any other term, covenant,
condition or obligation contained in this Note, which default is not cured within 15 days after
Maker’s written notice thereof;

          (c) the filing of any petition by Maker under any provision of the Federal Bankruptcy
Code or any state law relating to insolvency; or the filing of any such petition against Maker,
unless such petition and all proceedings thereunder are dismissed within 60 days from such filing;
or the appointment of a trustee or receiver for all or any assets of Maker, unless such appointment
is vacated or dismissed within 60 days from the date of such appointment;

          (d) an adjudication that Maker is insolvent or bankrupt.

     7. Collection Costs. Upon the occurrence of any Event of Default, Maker agrees to pay
Holder, upon demand, any and all costs, expenses and fees, including without limitation,
reasonable attorneys’ fees incurred before or after suit is commenced in order to enforce payment
hereof, and in the event suit is brought to enforce payment hereof, that such costs, expenses and
fees shall be determined by a court proceeding without a jury.

     8. Waiver. Maker hereby acknowledges and agrees that the failure by Holder to insist upon
Maker’s strict performance of this Note or the failure by Holder to exercise its remedies
hereunder shall not be deemed a waiver of such default, and shall not be a waiver by Holder of any
of Holder’s rights or remedies hereunder or at law or in equity.

     9. Transfer. This Note is not transferable by the Holder without the express written
permission of Maker which shall not be unreasonably withheld.

     10. Governing Law. All amounts payable hereunder are payable in lawful money of the United
States of America. This Note shall be governed by and construed in accordance with the laws of
the State of Texas, without regard to its conflicts of laws principles.

     11. Representations and Warranties of Maker. Maker hereby represent and warrants to Holder
as follows:

          (a) Maker has full power, authority and capacity to issue this Note and to perform
and comply with all covenants and obligations contained herein.

          (b) This Note has been duly executed and delivered by Maker and constitutes the
legal, valid and binding obligations of Maker, enforceable against Maker in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors’ rights generally.

     12. Representations and Warranties of Guarantors. Each Guarantor individually represents and
warrants to Holder as follows:

          (a) Guarantor has the power and authority and legal right to execute, deliver, and
perform its obligations under the Guaranty and the Guaranty constitutes the legal, valid, and
binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, except
as limited by bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditor’s rights.

          (b) The execution, delivery, and performance by Guarantor of this Guaranteed
Promissory Note do not and will not violate or conflict with any law, rule, or regulation or any
order, writ, injunction, or decree of any court, governmental authority or agency, or arbitrator.

          (c) No authorization, approval, or consent of, and no filing or registration with,
any court, governmental authority, or third party is necessary for the execution, delivery, or
performance by Guarantor of this Guaranty Agreement or the validity or enforceability thereof.

          (d) Guarantor has, independently and without reliance upon Maker and based upon such
documents and information as Guarantor has deemed appropriate, made its own analysis and decision
to become a Guarantor of this Guaranteed Promissory Note

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IN WITNESS WHEREOF, this Note has been duly executed to be effective as of the 19 day of
December, 2006.

	 	 	 	 	 	 	 	 	 
	Holders Address

	 	 	 	Maker:	 	 	 	 
	                                                            
                                                            	 	 	 	REMOTE KNOWLEDGE, INC.,

a Delaware Corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Randy S. Bayne	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Name:
	 	Randy S. Bayne	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Guarantor:	 	Alan Granader	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Alan Granader	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Dan Granader	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Dan Granader	 	 
	 	 	 	 	 	 	 

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