BRAND LICENCE AGREEMENT

(1)

BORDERS PROPERTIES, INC. , a company incorporated in the State of Delaware, USA and having its principal place of business at 100 Phoenix Drive, Ann Arbor, MI 48108, USA (“ Licensor ”); and

(2)

BORDERS (UK) LIMITED , a company incorporated under the laws of England and Wales with registered number 01580771, and having its registered office at 120 Charing Cross Road, London, WC2H 0JR; and

(3)

BORDERS BOOKS IRELAND LIMITED , a company incorporated in the Republic of Ireland with registered number 404624, and having its registered office at 70 Sir John Rogerson’s Quay, Dublin 2, together parties (2) and (3) each being (the “ Licencee ”).

(A)

Licensor is the registered proprietor of, or has the right to license and/or sub-license, the Trade Marks (as defined below).

(B)

Pursuant to an agreement between BGI (UK) Limited and Bookshop Acquisitions Limited (the “ Purchaser ”) of the same date as this agreement for the sale and purchase of the entire issued share capital of Borders (UK) Limited (the “ Company ”) and Borders Books Ireland Limited (the “ Share Purchase Agreement ”), Licensor has agreed to license Licensee to use the Trade Marks on the terms of this Agreement.

(C)

Licensor has registered the Domain Names (as defined below) and holds all right, title and interest in and to the registration of such Domain Names.

(D)

Licensor has agreed to provide a licence to Licensee to make use of the Domain Names on the terms set out in this Agreement.

1.

DEFINITIONS AND INTERPRETATION

a physical retail outlet operated by the Licensee
under the Trade Marks in relation to the sale of
Goods and the provision of Services;

a day (excluding Saturday) on which the banks are
generally open for business in the City of London
and New York for the transaction of normal banking
business;

a company engaged in business relating to the
manufacture and supply of books, music and other
media;

in relation to a body corporate, the power of a person
to secure that the affairs of the body corporate are

conducted in accordance with the wishes of that
person:

(a)     by means of the holding of shares, or the
          exercise of voting power, in or in relation to
          that or any other body corporate, or

(b)     by virtue of any powers conferred by the
          constitutional or corporate documents,
          regulating that or any other body corporate, or
          any other document,

and a “ Change of Control ”, in relation to that body
corporate, occurs if a person who Controls it ceases
to do so or if another person acquires Control of
it;

in relation to either party, information (whether in
written, electronic or oral form) belonging or relating
to that party or, in the case of Licensor, belonging to
a member of Licensor’s Group, relating to its or their
business, affairs, activities, products or services
which is not in the public domain and which (i)
either party has marked as proprietary or
confidential; (ii) either party, orally or in writing, has
advised the other party is of a confidential nature; or
(iii) due to its character or nature, a reasonable
person in a like position to the recipient of such
information under this Agreement, and under like
circumstances, would treat as confidential;

means the amount of additional consideration
payable (if any) for the Shares and the Irish Shares
pursuant to schedule 10 of the Share Purchase
Agreement;

the domain names

“borders.co.uk”;
“bordersstores.co.uk”;
“bordersmobile.co.uk”;
“bordersrewards.co.uk”;
“borders.ie”;
“bordersstores.ie”;
“bordersrewards.ie” ;
and any other “.co.uk” or “.ie” domain name
incorporating any of the Trade Marks owned by a
member of the Licensor’s Group as at the date of
signing this Agreement;

the date of this Agreement;

the goods and services set out in Schedule 2 to this
Agreement for which the Trade Marks are registered;

a company that falls within either the meaning
attributed to that term in ss736 and 736A Companies

Act 1985 or the meaning attributed to the term
“parent undertaking” in s258 Companies Act 1985;

means:

(a) the guarantee provided by Borders Group, Inc in
relation to the lease between (1) Dempsey Assets
Limited and (2) Borders (UK) Limited relating to the
property at 98 Buchanan Street, Royal Exchange
Square, Glasgow, Scotland, G1 3HA;

(b) the guarantee provided by Borders Group, Inc in
relation to the lease between (1) Standard Life
Investment Fund Limited and (2) Borders (UK) Limited
relating to the property at 94-96 Briggate, Leeds,
West Yorkshire, LS1 6NP;

(c) the guarantee provided by Borders Group, Inc in
relation to the lease between (1) Superdrug PLC and
(2) Borders (UK) Limited relating to the property at
203-207 Oxford Street, London, W1D 2LE;

(d) the guarantee required to be provided by Borders
Group, Inc in respect of the completion of the
agreement for lease dated 24 March 2006 between (1)
Cosgrave Property Developments Limited, (2) Joseph
Cosgrave, Peter Cosgrave and Michael Cosgrave and
(3) Borders Books Ireland Limited relating to the
property at Unit 3B & 4, West End Retail Park,
Blanchardstown, Dublin 15, Republic of Ireland;

has the meaning given in schedule 10 of the Share
Purchase Agreement;

the group of companies comprising Licensor, any
Holding Company from time to time of Licensor and
any Subsidiary of Licensor or any such Holding
Company and “ member of Licensor’s Group ” shall
be construed accordingly;

all Goods and Services sold or offered for sale or
supply under the Trade Marks, including the
provision of such goods and services using the
Domain Names or corresponding website addresses;

the beneficiary of any sub-license granted pursuant
to Clause 8.3;

a company or other entity that falls within either
the meaning attributed to that term in ss736 and 736A
Companies Act 1985 or the meaning attributed to the
term “subsidiary undertaking” in s258 Companies Act 1985;

means the deed relating to Tax in the agreed form
between BGI (UK) Limited and the Purchaser of
even date;

United Kingdom and the Republic of Ireland;

the trade marks short particulars of which are set out
in Schedule 1 to this Agreement;

the agreement entered between Borders International
Services, Inc. and the Company in relation to the
provision of certain services; and

the period from the Effective Date to midnight on the
following 31 December, and any subsequent period
of twelve (12) months commencing the following 1
January or any anniversary of that date while this
Agreement remains in force (provided that the final
Year of this Agreement may be a shorter period
ending on the effective date of termination of this Agreement).

1.2

Interpretation

In this Agreement:

2.

GRANT OF RIGHTS

2.1

Subject to the terms and conditions of this Agreement, in consideration of the payment of £1 Licensor grants to Licensee, with effect from the Effective Date and without limit of period, an exclusive:

via the Internet using any domain name or other electronic media save as aforesaid; and

(b)

worldwide right to use the Domain Names in relation to the Goods and Services, including, without limitation, in connection with the development, manufacture, marketing, use, distribution, sale and disposal of the Goods and Services. The right to use the Domain Names in this context means the right to use the Domain Names in any manner whatsoever including the right to establish uniform resource locators within the Domain Names, to display at such uniform resource locators such content relating to the Goods and Services as Licensee shall determine in its absolute discretion and to establish email addresses using the Domain Names.

3.

LICENSEE OBLIGATIONS

3.1

use the Trade Marks only in the form, colour, design, style and manner directed or approved by Licensor as specified in Schedule 3 and/or as communicated by Licensor in writing from time to time, and with appropriate legends as directed or approved by Licensor in writing clearly identifying Licensor as the owner of the Trade Marks and indicating, in the form and manner directed by Licensor, that the Trade Marks are used under licence from Licensor;

3.2

at Licensee’s reasonable expense, ensure that all manufacturing, packaging, storage, marketing and supply operations by which the Goods and Services are manufactured, packaged, stored, marketed or supplied under this Agreement are conducted to a standard consistent with good manufacturing, packaging, storage, marketing and sales practice and in accordance with such other reasonable standards, specifications and procedures as specified in Schedule 4 and/or as communicated by Licensor in writing from time to time;

3.3

at Licensee’s reasonable expense, provide Licensor, at its reasonable request, with samples of the goods comprised in the Licensed Products and promptly comply with all instructions and directions issued by Licensor following examination of the same. Without limitation, samples of such Licensed Products proposed to be marketed or sold by Licensee or any Sub-Licensee shall be submitted to Licensor for approval before first commercial production and Licensee shall (i) not market or sell any such Licensed Products; and (ii) procure that any Sub-Licensee(s) shall not market or sell any such Licensed Products, before Licensee has received Licensor’s prior written approval, it being understood by Licensee that the giving of such approval shall in no way dilute or diminish Licensee’s obligations and liabilities with respect to such Licensed Products it markets or sells and Services it supplies. Licensee shall (i) not make any changes to any such Licensed Products; and (ii) procure that any Sub-Licensee(s) shall not make any changes to any such Licensed Products, approved by Licensor without first seeking the further approval of Licensor pursuant to this Clause 3.3;

3.4

at Licensee’s expense, submit all proposed (whether by Licensee or any Sub-Licensee) advertising copy and all other proposed promotional or marketing materials regarding the Licensed Products and other materials featuring the Trade Marks, including, without limitation, stationery, wrappings, packaging, point of purchase materials, product catalogues and television commercials, to Licensor, at its request, for its written approval prior to publication or use by Licensee or Sub-Licensee (as appropriate) and not proceed, or allow Sub-Licensee to proceed) with publication or use without such approval having first been obtained (such approval not to be unreasonably withheld or delayed);

3.5

not use the Trade Marks or Domain Names on or in relation to any goods or services (other than the Goods and Services) without the Licensor’s prior consent;

3.6

not use on or in relation to any goods or services any mark or name confusingly similar to the Trade Marks;

3.7

not, without Licensor’s prior written consent, use or apply on or in relation to the Licensed Products (including as or as part of a corporate, business or trading name) any other trade mark, logo, domain name or other proprietary or commercial name or designation, excluding the trade mark “Books Etc”;

3.8

not make any representation or do any act which may be taken to indicate that it has any right, title or interest in or to the ownership or use of any of the Trade Marks or Domain Names other than under the terms of this Agreement;

3.9

not do, cause or authorise to be done anything which will or may impair, damage or be detrimental to the reputation or goodwill associated with Licensor or the Trade Marks or Domain Names, which will or may adversely affect the value or validity of the Trade Marks or Domain Names, which may bring the Trade Marks or Domain Names into disrepute or which might jeopardise or invalidate any registration or application for registration of the Trade Marks or Domain Names or Licensor’s title to the Trade Marks or Domain Names (save that Licensor’s remedy for any challenge by Licensee to Licensor’s ownership of the Trade Marks or Domain Names shall be as set out in Clause 9.2(d));

3.10

not register, in the Territory or elsewhere, the Domain Names, Trade Marks or any other trade mark or domain name which is in Licensor’s reasonable opinion identical or confusingly

similar to the Trade Marks or Domain Names or that constitutes any translation thereof into any language spoken in the Territory;

3.11

upon Licensor’s request, provide