Document:

exhibit108.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

     Exhibit 10.8

        THIRD AMENDMENT TO THE SENIOR SECURED CREDIT AGREEMENT, dated as of March 30, 2009 (this “Amendment”), made by and among (a) Borders Group, Inc., a Michigan corporation (the “Borrower”), (b) Pershing Square Credit Partners LLC, a Delaware limited liability company (“Pershing Square” or a “Lender”), (c) PSRH, Inc., a Cayman Islands exempted company (a “Lender”, and collectively with Pershing Square, the “Lenders”), and (d) Pershing Square Capital Management, L.P., a Delaware limited partnership (the “Collateral Agent” and the “Administrative Agent”). Capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement (as hereinafter defined).

RECITALS

        WHEREAS, the Borrower, the Lenders, the Collateral Agent, the Administrative Agent and certain other parties entered into that certain Senior Secured Credit Agreement, dated as of April 9, 2008 as amended by the First Amendment to the Senior Secured Credit Agreement, dated as of December 22, 2008 and the Second Amendment to the Senior Secured Credit Agreement, dated as of February 13, 2009 (the “Credit Agreement”); and

        WHEREAS, the Borrower, the Lenders, the Collateral Agent and the Administrative Agent desire to amend the Credit Agreement in accordance with Section 14.12 of the Credit Agreement in the manner set forth in this Amendment in order to extend the Maturity Date until April 1, 2010.

        NOW, THEREFORE, in order to carry out their intent as expressed above and in consideration of the mutual agreements hereinafter contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	1.      	Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Maturity Date” and replacing it in its entirety with the following new definition: 
	 
	 	         	“Maturity Date. April 1, 2010.” 
	 
	2.      	References in the Credit Agreement to “this Credit Agreement” or any particular Section thereof shall be deemed to refer to the Credit Agreement or such Section as amended hereby. 
	 
	3.      	The Borrower represents and warrants to the Lenders and the Agents as follows: 
	 
	 	(i)      	All representations and warranties in the Credit Agreement other than Section 6.6.2, Section 6.18, Section 6.19, Section 6.26, Section 6.27 and Section 6.28 are true and correct with the same effect as if made at and as of the date hereof (except to the extent that such representations and warranties relate expressly to an earlier date); provided, that (a) clauses (c) and (d) of the definition of “Material Adverse Effect” shall be deemed to 
	 

 
	 
			be omitted for purposes of this representation, (b) the related disclosure schedules to the Credit Agreement shall be deemed amended by any facts set forth in the Borrower’s public filings with the Securities Exchange Commission from the date of the Credit Agreement to date hereof and the draft Form 10-K for the fiscal year ended January 31, 2009, a copy of which has been provided to the Administrative Agent’s Special Counsel prior to the date hereof, (c) there may be other changes to the related disclosure schedules to the Credit Agreement since the date of the Credit Agreement, and to the extent that such changes are not material and have resulted from the Borrower’s conduct of its business in the ordinary course, such changes shall not be deemed to be a breach of this representation; provided further that for purposes of Section 6.4.2 the term “FQ3 2007” shall be replaced with the term “FQ3 2008”. 
			
	 	(ii)      	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 Administrative Agent’s security interest in the Collateral, including, with respect to any United Kingdom security, the filing of any applicable UK security documents at the Companies Registration Office under Section 395 of the Companies Act of 1985 and such other filing as may be required under English law. The Collateral and the Administrative Agent’s rights with respect to the Collateral are not subject to any setoff, claims, withholdings or other defenses and the Borrower and all Subsidiaries of the Borrower that are a party to Pledge Agreement are the owners of the Collateral free from any Lien. 
			
		(iii)	The Credit Agreement or any of the other Loan Documents do not contain any untrue statement of a material fact or omit to state a material fact (known to the Borrower or any of its Subsidiaries in the case of any document or information not furnished by it or any of its Subsidiaries) necessary in order to make the statements herein or therein not misleading.
			
		(iv)	The representations and warranties of the Borrower and any of its Subsidiaries contained in Section 6.1.2, Section 6.1.3 and Section 6.2 of the Credit Agreement are true and correct at and as of the date hereof, with the same effect as if made with respect to this Amendment, at and as of the date hereof. 
	 
	4.      	Notwithstanding anything in this Amendment to the contrary, this Amendment shall become effective on March 31, 2009 (the “Effective Date”), provided that: 
	 
	 	(i)      	on or prior to the Effective Date, the Administrative Agent shall have received a duly executed copy of this Amendment by each of the parties hereto; 
	 

			
	 	(ii)      	the Borrower (including without limitation any of its affiliates) shall not have provided any notice of acceptance (or any other similar notice) to Pershing Square Capital Management, L.P. pursuant to the Purchase Offer Letter, including without limitation under Section 1 thereof, on or prior to the Effective Date;
			
		(iii)	the Administrative Agent shall have received a certificate of the Borrower signed by an authorized officer of the Borrower to the effect that each of the representations and warranties of the Borrower in this Amendment are true and correct at and as of the Effective Date; 
			
		(iv)	no Default or Event of Default shall have occurred and be continuing as of the Effective Date; 
			
		(v)	the Borrower shall have paid to the Lenders or the Administrative Agent, as appropriate, the fees and expenses of the Administrative Agent’s Special Counsel. 
	 
	5.      	Except as expressly amended hereby, the Credit Agreement remains unmodified and is in full force and effect.
	6.  	

This Amendment may be executed in two or more counterparts, each of which constitutes an original and all of which, when taken together, constitute one agreement. This Amendment may be delivered by facsimile and when executed and so delivered, shall be an original for all purposes.
		

	7.  	THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
	 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written.

	BORROWER:	  	  
	  
	  
	               		BORDERS GROUP, INC.
	  
	  
	              		By:  		/s/ Mark Bierley 
	 				Name: Mark Bierley
					Title:  EVP and Chief Financial
					          Officer
	                                        

 

	LENDERS:  	  	 
	  
	  
	                 		PERSHING SQUARE CREDIT 
	               		PARTNERS LLC 
	    
	  
	  	  	       		PERSHING SQUARE CAPITAL 
			 		MANAGEMENT, L.P., its Managing  
			By:		Member 
					   
					PS MANAGEMENT GP, LLC, its
			By:		General Partner
					   
			By:		/s/ Roy J. Katzovicz
					Name:  Roy J. Katzovicz
					Title:    Authorized Signatory and
					            Chief Legal Officer 
					   
			By:		/s/ Nicholas Botta
					Name:  Nicholas Botta
					Title:     Authorized Signatory and
					             Chief Financial Officer 
					   
			PSRH, INC.
					   
					PERSHING SQUARE CAPITAL
					MANAGEMENT, L.P., its Authorized
			By:		Representative
					   
					PS MANAGEMENT GP, LLC, its
			By:		General Partner
					   
			By:		/s/ Roy J. Katzovicz
					Name:  Roy J. Katzovicz
					Title:    Authorized Signatory and
					            Chief Legal Officer
					   
			By:		/s/ Nicholas Botta
					Name:  Nicholas Botta
					Title:     Authorized Signatory and
					             Chief Financial Officer 
	               	  	 

 

			ADMINISTRATIVE
	               		AGENT/COLLATERAL AGENT: 
	  
	  
	 		PERSHING SQUARE CAPITAL  
	               		MANAGEMENT, L.P.
	  
	     
	                            		 		PS MANAGEMENT GP, LLC, its 
	 		By:		General Partner
					   
	 		By:    		/s/ Roy J. Katzovicz
					Name:  Roy J. Katzovicz 
					Title:    Authorized Signatory and
					            Chief  Legal Officer
					   
			By: 		/s/ Nicholas Botta 
					Name:  Nicholas Botta
					Title:     Authorized Signatory and
					             Chief Financial Officerexhibit1010.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.10

Borders Group, Inc. 

100 Phoenix Drive 

Ann Arbor, Michigan 48108

March 30, 2009

Pershing Square Capital Management, L.P. 

888 Seventh Avenue, 42nd Floor 

New York, New York 10019

Attention:          William A. Ackman, Managing Member

                         Re:  Warrant Agreement

Ladies and Gentlemen:

     Reference is hereby made to the Warrant and Registration Rights Agreement dated as of April 9, 2008 by and between Borders Group, Inc. (the “Company”) and Computershare Inc. and Computershare Trust Company, N.A., as Warrant Agent (the “Warrant Agreement”), pursuant to which Warrants to purchase Common Stock of the Company were issued, and may in the future be issued, to Pershing Square Capital Management, L.P., its Affiliates and certain of their respective managed funds (collectively, “Pershing Square”). Capitalized terms used and not defined herein shall have the meaning set forth in the Warrant Agreement.

     The Company and Pershing Square hereby agree that the Warrants shall only be exercisable in the following amounts at the following times: (i) prior to June 30, 2009, 3,675,000 Warrants, (ii) prior to September 30, 2009, 7,350,000 Warrants and (iii) prior to December 31, 2009, 11,025,000 Warrants. For the avoidance of doubt, on or after December 31, 2009, all of the Warrants shall be exercisable. Notwithstanding the foregoing, in the event of the earlier of (i) a Change of Control Event, Public Stock Merger, Recapitalization Event or Reorganization Event, or (ii) the public announcement by the Company or any other party of such person’s intent to enter into a transaction, which if consummated would constitute a Change of Control Event, Public Stock Merger, Recapitalization Event or Reorganization Event, all of the Warrants shall immediately become exercisable.

     The Company and Pershing Square also hereby acknowledge and agree that: (i) as a result of the issuance of common stock to Pershing Square, L.P. pursuant to the Subscription Agreement between Pershing Square, L.P. and the Company dated as of the same date as this letter agreement, and in accordance with Section 5.6 of the Warrant Agreement, the Exercise Price has been adjusted to $0.65 per share, which Exercise Price shall be subject to further adjustments to be made on or prior to the date of exercise thereof as provided and in accordance with the provisions of the Warrant Agreement, and (ii) the requirements of Section 5.10 of the Warrant Agreement in relation to the adjustment of the Exercise Price to $0.65 per share shall be

deemed satisfied in full, with respect to each Holder only, by this letter agreement without any further action by the Company.

     The Company and Pershing Square hereby further agree that, the Company shall comply with its obligations under Section 4.1 of the Warrant Agreement,
provided, that the reference to “October 1, 2008” in Section 4.1(a) shall be deemed
“June 30, 2009”, the reference to “January 1, 2009” in Section 4.1(a) shall be deemed “September 30, 2009”, and the term “Registrable Securities” shall be deemed to include, in addition to all Warrants and
Common Stock issuable under the Warrants, any other shares of Common Stock owned by Pershing Square, from time to time.

     This letter agreement may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the parties hereto.
This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York. This letter agreement may be executed in any number of counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one agreement.

     Please indicate your agreement with the foregoing by executing a copy of this letter and returning it to the undersigned.

	Very truly yours,  
	  
	  
	BORDERS GROUP, INC.  
	  
	By:  /s/ Mark Bierley                     
	Name:  Mark Bierley
	Title:     Executive Vice President and

            Chief Financial Officer

	Agreed to and accepted this  
	30th day of March, 2009  
	  
	  
	PERSHING SQUARE CAPITAL MANAGEMENT, L.P.  
	By:  PS Management GP, LLC, its General Partner  
	  
	By:  /s/ Roy J. Katzovicz                                          
	Name:  Roy J. Katzovicz  
	Title:  Authorized Signatory and Chief Legal Officer  
	  
	By:  /s/ Nicholas Botta                                               
	Name:  Nicholas Botta  
	Title:  Authorized Signatory and Chief Financial Officer

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