First Amendment to Senior Secured Credit Agreement by and among Borders Group, Inc., Pershing Square Credit Partners LLC, PSRH, Inc., and Pershing Square Capital Management, L.P.

Exhibit 10.4     

          FIRST AMENDMENT TO THE SENIOR SECURED CREDIT AGREEMENT, dated as of December 22, 2008 (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 hereinaf ter 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 (the “Credit Agreement”);

          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 February 16, 2009;

          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:

“Administrative Agent’s Office. The Administrative Agent’s office located at 888 Seventh Avenue, 42^nd Floor, New York, NY 10019 or at such other location as the Administrative Agent may designate from time to time.”

“Maturity Date. February 16, 2009.”

“Repayment Premium. The Borrower agrees to pay to Pershing Square Capital for the account of the Lenders (i) an amount in Dollars equal to 2.25% of any principal amount of Loans repaid between the date hereof until January 15, 2009, on the date of any such repayment, and (ii) on January 15, 2009, an amount in Dollars equal to 2.25% of the principal amount of Loans then outstanding (together, (i) and (ii) shall constitute the “Repayment Premium”). Payment of the Repayment Premium shall be a condition to (i) the extension of the Maturity Date from January 15, 2009 to February 16, 2009, and (ii) the effectiveness of the repayment of the principal amount of the Loans.”

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