Document:

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                                                                   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, JP Morgan Chase Bank and Wells 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.

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      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, JP
      Morgan Chase Bank and Wells 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
Dickinson Wright, 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 Chapman and

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Cutler 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.

                                      -11-

<PAGE>

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-

<PAGE>

      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/ Edward W. Wilhelm
                                    --------------------------------------------
                                    Name: Edward W. Wilhelm
                                    Title: Senior Vice President, Finance
                                           and Chief Financial Officer
<PAGE>

The foregoing is hereby agreed to
as of the date first written above.

                                      TEACHERS INSURANCE AND ANNUITY
                                         ASSOCIATION OF AMERICA

                                      By   /s/ JOHN GOODREDS
                                           -------------------------------------
                                           Name: JOHN GOODREDS
                                           Title: DIRECTOR

                                      TIAA-CREF LIFE INSURANCE COMPANY

                                      By: Teachers Insurance and Annuity
                                          Association of America, as Investment
                                          Manager

                                      By   /s/ JOHN GOODREDS
                                           -------------------------------------
                                           Name: JOHN GOODREDS
                                           Title: DIRECTOR

<PAGE>

                                      JEFFERSON-PILOT LIFE INSURANCE COMPANY

                                      By   /s/ James E. McDonald
                                           ----------------------------------
                                           Name: James E. McDonald, Jr.
                                           Title: Vice President

                                      JEFFERSON PILOT LIFEAMERICA INSURANCE
                                        COMPANY

                                      By   /s/ James E. McDonald
                                           ----------------------------------
                                           Name: James E. McDonald, Jr.
                                           Title: Vice President

<PAGE>

                                      THE TRAVELERS INSURANCE COMPANY

                                      By   /s/ DENISE DUFFEE
                                           ----------------------------------
                                           Name: DENISE DUFFEE
                                           Title: INVESTMENT OFFICER

                                      THE TRAVELERS LIFE AND ANNUITY COMPANY

                                      By   /s/ DENISE DUFFEE
                                           ----------------------------------
                                           Name: DENISE DUFFEE
                                           Title: INVESTMENT OFFICER

                                      PRIMERICA LIFE INSURANCE COMPANY

                                      By   /s/ DENISE DUFFEE
                                           ----------------------------------
                                           Name: DENISE DUFFEE
                                           Title: INVESTMENT OFFICER

<PAGE>

                                      ALLSTATE LIFE INSURANCE COMPANY

                                      By   /s/ JEFFREY CANNON
                                           -------------------------------
                                           Name: JEFFREY CANNON
                                           Title: AUTHORIZED SIGNATORY

                                      By   /s/ JERRY CANNON
                                           -------------------------------
                                           Name: JERRY D. ZINKULA
                                           Title: AUTHORIZED SIGNATORY

<PAGE>

             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.

<PAGE>

      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/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President
                                                 and Treasurer

                                      WALDEN BOOK COMPANY, INC.

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President
                                                 and Treasurer

                                      PLANET MUSIC, INC.

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President and
                                                 Treasurer

                                      BORDERS PROPERTIES, INC.

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President and
                                                 Treasurer

                                      WALDENBOOKS PROPERTIES, INC.

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President and
                                                 Treasurer

<PAGE>

                                      BORDERS ONLINE, LLC

                                      By: Borders, Inc., its sole Member

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President and
                                                 Treasurer

                                      BORDERS OUTLET, INC.

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President and
                                                 Treasurer

                                      BORDERS FULFILLMENT, INC.

                                      BY: /s/ Edward  W. Wilhelm
                                          --------------------------------
                                          Name: Edward  W. Wilhelm
                                          Title: Senior Vice President and
                                                 Chief Financial Officer

                                      THE LIBRARY, LTD.

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President and
                                                 Treasurer

                                      BGP (UK) LIMITED

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Director

<PAGE>

                                      BORDERS ONLINE, INC.

                                      By: /s/ Edward W. Wilhelm
                                          --------------------------------
                                          Name: Edward W. Wilhelm
                                          Title: Senior Vice President and
                                                 Treasurer

<PAGE>

                           FORM OF SECURITY AGREEMENT

                                    EXHIBIT A
                (to Amendment No. 1 to Note Purchase Agreements)

<PAGE>

                         FORM OF INTERCREDITOR AGREEMENT

                                    EXHIBIT B
                (to Amendment No. 1 to Note Purchase Agreements)
<PAGE>
                   DESCRIPTION OF OPINION OF COMPANY COUNSEL

      The opinion of Dickinson Wright, 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)

<PAGE>

      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 Dickinson Wright, 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
<PAGE>

                         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)

<PAGE>

      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<PAGE>
                                                                   EXHIBIT 10.62

                              TERMINATION AGREEMENT

      THIS TERMINATION AGREEMENT, dated as of July 22, 2004 (this "Agreement"),
is among BORDERS GROUP, INC. (the "Company"), BORDERS, INC. ("Borders"), WALDEN
BOOK COMPANY, INC. ("Walden"), WALDENBOOKS PROPERTIES, INC. ("WPI"), BORDERS
PROPERTIES, INC. ("BPI"), WILMINGTON TRUST COMPANY, not in its individual
capacity, except as expressly stated herein, but solely as Owner Trustee ("Owner
Trustee"), SAM PROJECT FUNDING CORP. I, as Investor ("Investor"), SUNTRUST BANK,
as Co-Arranger, Administrative Agent ("Administrative Agent"), Real Estate
Administrative Agent ("Real Estate Administrative Agent") and Documentation
Agent ("Documentation Agent"), and the Lenders party thereto (the "Lenders").

                                   BACKGROUND

      1. The Company, Borders, Walden, WPI, BPI, Owner Trustee, Investor,
Administrative Agent, Real Estate Administrative Agent, Documentation Agent and
certain of the Lenders are parties to that certain Participation Agreement,
dated as of November 22,1995, which was Amended and Restated October 17, 1997,
and which was amended pursuant to the Omnibus Amendment dated as of June 21,
2002 and Omnibus Amendment No. 2 dated as of May 20, 2003 (as heretofore
amended, the "Participation Agreement")

      2. The parties hereto desire to terminate the facility provided pursuant
to the Participation Agreement and the documents related thereto.

      NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

      SECTION 1. Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein, shall have the meanings assigned thereto in the
Participation Agreement.

      SECTION 2. Termination. As of the Effective Date (as hereinafter defined),
the parties hereto hereby agree that all of rights and obligations of the
Lessees, the Owner Trustee, the Investor, the Lenders, the Guarantors, the Real
Estate Administrative Agent, the Documentation Agent and the Administrative
Agent pursuant to the Participation Agreement and the other Operative Agreements
(other than the Ground Leases), including the Commitments of the Lenders
pursuant to the Participation Agreement and the Credit Agreement, shall be
terminated and shall be of no further force and effect, provided that the
obligations of the Lessees and the Guarantors set forth in Sections 13.01,
13.02, 15.01 and 15.14 of the Participation Agreement, Section 5.6 of the Credit
Agreement and all other provisions of the Operative Agreements which explicitly
survive the termination of the Operative Agreements shall survive the
termination effected by this Agreement; provided that any obligation of the
Owner Trustee that survives the termination of the Operative Documents is hereby
assigned to the Lessees and the Lessees hereby accept such assignment. The
"Effective Date" shall mean the date on which the Administrative Agent shall
have received, in immediately available funds, an amount equal to (i)
$13,809,826.27, which amount reflects the sum of the outstanding Revolving
Credit Loans, accrued interest thereon, outstanding Facility Fee and amounts due
under Section 5.6 of the

<PAGE>

Credit Agreement owing to the Lenders to and including July 22, 2004, plus (ii)
$9,052.50 for legal fees and disbursements due to Mayer, Brown, Rowe & Maw LLP.

      SECTION 3. UCC Terminations. The Lenders, the Owner Trustee, the Investor,
the Real Estate Administrative Agent, the Documentation Agent and the
Administrative Agent hereby authorize the Lessees to file any terminations of
any UCC financing statements filed against any Lessee in favor of the Real
Estate Documentation Agent or the Administrative Agent in connection with the
Operative Documents.

      SECTION 4. Instruction to Trustee. By its execution hereof, each of the
Lessees and the Agents hereby authorizes and instructs Wilmington Trust Company,
as Owner Trustee, to execute, delivery and perform this Agreement

      SECTION 5. Miscellaneous. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York. This Agreement
may be executed by the parties hereto on separate counterparts, each of which
shall constitute an original, and all of which together shall constitute one and
the same agreement.

                         [Signatures on following page]

                                       2
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date above written.

                                  BORDERS GROUP, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President
                                         and Chief Financial Officer

                                  BORDERS, INC., as a Lessee and as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  PLANET MUSIC, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  BORDERS PROPERTIES, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  WALDENBOOKS PROPERTIES, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                      S-1
<PAGE>

                                  BORDERS ONLINE, LLC , as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  BORDERS OUTLET, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  BORDERS FULFILLMENT, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  THE LIBRARY, LTD., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  WALDEN BOOK COMPANY, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                  BORDERS ONLINE, INC., as a Guarantor

                                  By: /s/ Edward W. Wilhelm
                                      ------------------------------------------
                                  Name Printed: Edward W. Wilhelm
                                  Title: Senior Vice President and Treasurer

                                      S-2
<PAGE>

                                  WILMINGTON TRUST COMPANY, not in its
                                  individual capacity, but solely as Owner
                                  Trustee

                                  By: /s/ Joseph B. Fell
                                      ------------------------------------------
                                  Name Printed: Joseph B. Fell
                                  Title: Assistant Vice President

                                  SAM PROJECT FUNDING CORP. I

                                  By:___________________________________________
                                  Name Printed:_________________________________
                                  Title: _______________________________________

                                      S-3
<PAGE>

                                WILMINGTON TRUST COMPANY, not in its
                                individual capacity, but solely as Owner Trustee

                                By: ____________________________________________
                                Name Printed: __________________________________
                                Title: _________________________________________

                                SAM PROJECT FUNDING CORP. I

                                BY: /s/ Lori Gebron
                                    --------------------------------------------
                                Name Printed: Lori Gebron
                                Title: Vice President

                                       S-3

<PAGE>

                                SUNTRUST BANK, as Documentation Agent,
                                Administrative Agent and a Lender

                                By: /s/ Charles B. Biggers, III
                                    --------------------------------------------
                                Name Printed: Charles B. Biggers, III
                                Title: Director

                                       S-4

<PAGE>

                                HIBERNIA NATIONAL BANK, as a Lender

                                By: /s/ Laura K. Watts
                                    -------------------------------------------
                                Name Printed: Laura K. Watts
                                Title: V.P.

                                       S-5

<PAGE>

                                MERRILL LYNCH BUSINESS FINANCIAL
                                SERVICES INC., as a Lender

                                BY: /s/ Patrick A. LUCAS
                                    --------------------------------------------
                                Name Printed: Patrick A. Lucas
                                Title: VP

                                       S-6

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