AMENDMENT NO. 3 to the SECOND AMENDED AND RESTATED MULTICURRENCY REVOLVING CREDIT AGREEMENT

Exhibit 10.3

EXECUTION VERSION

AMENDMENT NO. 3
to the
SECOND AMENDED AND RESTATED MULTICURRENCY
REVOLVING CREDIT AGREEMENT

     This AMENDMENT NO. 3 , dated as of April 9, 2008 (this “ Amendment ”), to the SECOND AMENDED AND RESTATED MULTICURRENCY REVOLVING CREDIT AGREEMENT is by and among (a) BORDERS GROUP, INC. (“ BGI ”), a Michigan corporation, BORDERS, INC. , a Colorado corporation (“ Borders ”), WALDEN BOOK COMPANY, INC. , a Colorado corporation (“ Walden ”), BGP (UK) LIMITED, a company with limited liability organized under the laws of England and Wales (“ BGP (UK) ” and together with BGI, Borders and Walden, the “ Co-Borrowers ”), (b) BORDERS AUSTRALIA PTY LIMITED, a company organized under the laws of Australia (the “ Australian Borrower ”), (c) any other Subsidiary of BGI which becomes a Borrower hereunder pursuant to §5.16 (together with the Co-Borrowers and the Australian Borrower, the “ Borrowers ”), (d) the lending institutions from time to time party to the Credit Agreement (as defined herein) (the “ Lenders ”), (e) BANK OF AMERICA, N.A. , as administrative agent and as collateral agent for itself and such other lending institutions (the “ Administrative Agent ”), (f) JPMORGAN CHASE BANK, N.A. and WELLS FARGO RETAIL FINANCE, LLC , each as a syndication agent for itself and such other lending institutions (collectively, the “ Co-Syndication Agents ”), (g) GENERAL ELECTRIC CAPITAL CORPORATION and LASALLE RETAIL FINANCE , a division of LA SALLE BUSINESS CREDIT, LLC, each as documentation agent for itself and such other lending institutions (collectively, the “ Co-Documentation Agents ”) and (h) BANK OF AMERICA, N.A. , as an Issuing Bank hereunder, and with BANC OF AMERICA SECURITIES LLC and JPMORGAN SECURITIES INC., as Co-Lead Arrangers. Capitalized terms used herein and not otherwise defined shall be defined as provided in §1.

      WHEREAS , the Borrowers, the Lenders and the Agents are parties to that certain Second Amended and Restated Multicurrency Revolving Credit Agreement dated as of July 31, 2006 (as amended by that certain Amendment No. 1, dated as of April 2, 2007, as amended by that certain Amendment No. 2, dated as of August 28, 2007 (the “ Second Amendment ”), as amended by this Amendment, and as may be further amended, restated, amended and restated, supplemented, modified and otherwise in effect from time to time, the “ Credit Agreement ”);

      WHEREAS , the Borrowers request that the Lenders and the Agents amend certain of the terms and provisions of the Credit Agreement as set forth herein to allow for, among other things, (i) the Pershing Square Transactions (as hereinafter defined), and (ii) the extension of the completion deadline for certain Permitted Restructuring Transactions, and, subject to the terms and conditions hereof, the Lenders and Agents, have agreed to amend the Credit Agreement as set forth herein;

      NOW, THEREFORE, the Borrowers, the Lenders and the Agents hereby agree as follows:

      §1. Defined Terms . Capitalized terms used herein without definition, including in the foregoing Recitals, that are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement.

      §2. Certain Amendments to the Credit Agreement . Subject to the satisfaction of the conditions to effectiveness set forth in Section 6 of this Amendment, the Credit Agreement is hereby amended as follows:

      (a) Amendment to the definition of “Aggregate Borrowing Base” . The definition of “Aggregate Borrowing Base” in §1.1 of the Credit Agreement is hereby amended by deleting

the phrase “ten (10) Business Days” “ in the last paragraph of such definition and substituting the phrase “five (5) Business Days” in lieu thereof.

      (b) Amendment to the definition of “Applicable Margin” . The definition of “Applicable Margin” in §1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

     “ Applicable Margin . For each period commencing on an Adjustment Date through the date immediately preceding the next Adjustment Date (each a “ Rate Adjustment Period ”), the Applicable Margin shall be the applicable margin set forth below with respect to the arithmetic mean of the daily Aggregate Excess Availability as determined for the Fiscal Quarter of BGI and its Subsidiaries ended immediately prior to the applicable Rate Adjustment Period.

														Standby				Documentary
		Aggregate				Base				Eurocurrency				Letter of				Letter of
		Excess				Rate				Rate				Credit				Credit
Level		Availability				Loans				Loans				Fees				Fees
I		Greater than or					0.25	%			2.00	%			2.00	%			1.00	%
		equal to
		$	350,000,000
II		Greater than or					0.50	%			2.25	%			2.25	%			1.125	%
		equal to
		$150,000,000
		but less than
		$	350,000,000
III		Less than					0.75	%			2.50	%			2.50	%			1.25	%
		$	150,000,000

     Notwithstanding the foregoing, (i) if the Borrowers fail to deliver any Compliance Certificate pursuant to §8.4(c) hereof then, for the period commencing on the next Adjustment Date to occur subsequent to such failure through the date immediately following the date on which such Compliance Certificate is delivered, the Applicable Margin shall be the Applicable Margin set forth in Level III above and (ii) the Applicable Margin for the period from the Third Amendment Effective Date through December 31, 2008 shall be the Applicable Margin set forth in Level III above. For the avoidance of doubt, for the period from January 1, 2009 to the date immediately preceding the next Adjustment Date, the Applicable Margin shall be calculated with reference to the Compliance Certificate delivered by the Borrowers with respect to the Fiscal Quarter of the Borrowers ending November 1, 2008.

     Notwithstanding anything to the contrary in the foregoing, in the event either the Borrowers or the Administrative Agent determines, in good faith, that the calculation of the Aggregate Excess Availability on which the Applicable Margin for any particular period was determined is inaccurate and, as a consequence thereof, the Applicable Margin was lower or higher than it would have been, (i) the Borrowers shall promptly (but in any event within ten (10) Business Days) deliver (after the Borrowers discover such inaccuracy or the Borrowers are notified by the Administrative Agent of such inaccuracy, as the case may be) to the Administrative Agent correct financial and

borrowing base information for such period, (ii) the Administrative Agent shall determine and notify the Borrowers of the amount of interest that would have been due in respect of any of the outstanding Obligations, if any, during such period had the Applicable Margin been calculated based on the correct Aggregate Excess Availability and (iii) the Borrowers shall promptly pay to the Administrative Agent the difference, if any, between that amount and the amount actually paid in respect of such period. The foregoing shall in no way limit the rights of the Administrative Agent or the Lenders to exercise their rights to impose the rate of interest applicable during an Event of Default as provided herein.”

      (c) Amendment to the definition of “Cash Dominion Event” . Solely for the period from the Third Amendment Effective Date to and including December 15, 2008, the definition of “Cash Dominion Event” in §1.1 of the Credit Agreement is hereby amended by adding the following proviso at the end of such definition (it being understood that after December 15, 2008 the definition of “Cash Dominion Event” contained in §1.1 of the Credit Agreement shall revert back to the definition in effect immediately prior to the effectiveness of this Amendment):

     “ provided that, solely for the purposes of §10.1 (Fixed Charge Coverage Ratio) for the period from the Third Amendment Effective Date to and including December 15, 2008, “Cash Dominion Event” shall mean any time either (a) an Event of Default shall have occurred or (b) the Total Facility Usage Ratio exceeds 92.5%.”

      (d) Amendment to the definition of “Domestic Borrowing Base” . The definition of “Domestic Borrowing Base” in §1.1 of the Credit Agreement is hereby amended by deleting the phrase “ten (10) Business Days” in the last paragraph of such definition and substituting the phrase “five (5) Business Days” in lieu thereof.

      (e) Amendment to the definition of “Indebtedness” . The definition of “Indebtedness” in §1.1 of the Credit Agreement is hereby amended by adding the following text at the end of such definition:

     “Notwithstanding anything to the contrary in this definition of Indebtedness, the obligations (whether for cash, common shares of BGI or otherwise) of BGI and its Subsidiaries to settle the Pershing Square Warrants, any stock appreciation rights issued in lieu thereof or any debt or equity instruments (including interest and fees thereon) issued as a result of or in connection with the deferral of any payment in respect of the Pershing Square Warrants or any settlement, exercise, purchase, redemption, defeasance, retirement, payment, acquisition or otherwise thereof shall not constitute Indebtedness hereunder.”

      (f) Amendment to the definition of “Last Out Applicable Margin” . The definition of “Last Out Applicable Margin” in §1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

     “ Last Out Applicable Margin . For each period commencing on an Adjustment Date through the date immediately preceding the next Adjustment Date (each a “ Rate Adjustment Period ”), the Last Out Applicable Margin shall be the applicable margin set forth below with respect to the Consolidated EBITDA as determined for the four (4)

Fiscal Quarters of BGI and its Subsidiaries ended immediately prior to the applicable Rate Adjustment Period.

										Eurocurrency
										Rate
Level		Consolidated EBITDA				Base Rate Loans				Loans
I		Greater than or equal to
		$	250,000,000				1.25	%			3.00	%
		Greater than or equal to
		$225,000,000 but less than
II		$	250,000,000				1.50	%			3.25	%
III		Less than $225,000,000					1.75	%			3.50	%

     Notwithstanding the foregoing, (i) if the Borrowers fail to deliver any Compliance Certificate pursuant to §8.4(c) hereof then, for the period commencing on the next Adjustment Date to occur subsequent to such failure through the date immediately following the date on which such Compliance Certificate is delivered, the Last Out Applicable Margin shall be the Last Out Applicable Margin set forth in Level III above and (ii) the Applicable Margin for the period from the Third Amendment Effective Date through December 31, 2008 shall be the Applicable Margin set forth in Level III above. For the avoidance of doubt, for the period from January 1, 2009 to the date immediately preceding the next Adjustment Date, the Applicable Margin shall be calculated with reference to the Compliance Certificate delivered by the Borrowers with respect to the Fiscal Quarter of the Borrowers ending November 1, 2008.

     Notwithstanding anything to the contrary in the foregoing, in the event either the Borrowers or the Administrative Agent determines, in good faith, that the calculation of the Consolidated EBITDA on which the Last Out Applicable Margin for any particular period was determined is inaccurate and, as a consequence thereof, the Last Out Applicable Margin was lower or higher than it would have been, (i) the Borrowers shall promptly (but in any event within ten (10) Business Days) deliver (after the Borrowers discover such inaccuracy or the Borrowers are notified by the Administrative Agent of such inaccuracy, as the case may be) to the Administrative Agent correct financial statements and information for such period, (ii) the Administrative Agent shall determine and notify the Borrowers of the amount of interest that would have been due in respect of any of the outstanding Obligations, if any, during such period had the Last Out Applicable Margin been calculated based on the correct Consolidated EBITDA and (iii) the Borrowers shall promptly pay to the Administrative Agent the difference, if any, between that amount and the amount actually paid in respect of such period. The foregoing shall in no way limit the rights of the Administrative Agent or the Lenders to exercise their rights to impose the rate of interest applicable during an Event of Default as provided herein.”

      (g) Amendment to the definition of “Other Reserves” . The definition of “Other Reserves” in §1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

     “ Other Reserves . As determined by the Administrative Agent in its reasonable discretion exercised in a commercially reasonable manner, such amounts as the Administrative Agent may from time to time establish and revise (a) to reflect events,

conditions, contingencies or risks which do, or which the Administrative Agent believes may reasonably be expected to, (i) adversely affect either (A) any Collateral, the rights of the Administrative Agent, the Collateral Agent or any of the Lenders in any Collateral or its value or (B) the security interest and other rights of the Administrative Agent , the Collateral Agent or any of the Lenders in the Collateral (including the enforceability, perfection and priority thereof) or (ii) adversely affect in any material respect the business or financial condition of any of the Borrowers individually or the Borrowers and their Subsidiaries taken as a whole, (b) to reflect the belief of the Administrative Agent that any Borrowing Base Report or other collateral report or financial information furnished (or not furnished) by or on behalf of the Borrowers to the Administrative Agent or any of the Lenders is or may have been incomplete, inaccurate or misleading in any material respect or (c) to reflect any obligations (other than the Loans and Letters of Credit) secured by the Collateral (including, without limitation, Cash Management Obligations and/or obligations in respect of Hedging Agreements). The amount of any Other Reserves established or revised by the Administrative Agent shall in each case be based on the Administrative Agent’s determination that such amount bears a reasonable relationship to the applicable event, condition, contingency or risk described in clause (a) of this definition, the applicable report or information described in clause (b) or the applicable obligations described in clause (c) of this definition.”

      (h) Amendment to the definition of “Restricted Payment” . The definition of “Restricted Payment” in §1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

     “ Restricted Payments . In relation to BGI and its Subsidiaries, any (a) Distribution, (b) payment in cash or other property (other than common shares or additional warrants or rights to acquire common shares or other equity securities or stock appreciation rights of BGI) arising or resulting from the settlement, exercise, purchase, redemption, defeasance, retirement, payment, acquisition or otherwise of the Pershing Square Warrants or any debt or equity instruments (including interest and fees thereon) issued as a result of or in connection with the deferral of any payment in respect of the Pershing Square Warrants or any settlement, exercise, purchase, redemption, defeasance, retirement, payment, acquisition or otherwise thereof or (c) derivatives or other transactions with any financial institution, fund, commodities or stock exchange, clearinghouse or other Person (a “ Derivatives Counterparty ”) obligating BGI or any of its Subsidiaries to make payments to such Derivatives Counterparty as a result of any change in market value of any Capital Stock of BGI or such Subsidiary.”

      (i) Amendments to §1.1 of the Credit Agreement . Section 1.1 of the Credit Agreement is hereby amended by adding the following new definitions in the appropriate alphabetical order:

     “ Borders Bookshop . Bookshop Acquisitions Ltd., a company organized under the laws of England and Wales.”

     “ Borders New Zealand . Borders New Zealand Limited, a company organized under the laws of New Zealand, and its Subsidiaries.”

     “ Borders Singapore . Borders PTE. Ltd (Singapore), a company organized under the laws of Singapore.

     “ Paperchase . Paperchase Products Limited, a company with limited liability organized under the laws of England and Wales, and its Subsidiaries.”

     “ Permitted Pershing Square Term Loan Payments . Collectively, (a) interest and fees payable on the Pershing Square Term Loan Facility in amounts no greater than those provided in the Pershing Square Term Loan Documents as in effect on the Pershing Square Transaction Effective Date, (b) the payment of the outstanding principal amount of the Pershing Square Term Loan Facility on or after the maturity date thereof in accordance with the Pershing Square Term Loan Documents as in effect on the Pershing Square Transaction Effective Date and (c) any mandatory prepayment of principal made no earlier and in no greater amount than required by the Pershing Square Term Loan Documents as in effect on the Pershing Square Transaction Effective Date.”

     “ Pershing Square . Pershing Square Capital Management, L.P. and/or its Affiliates (other than BGI and its Subsidiaries).”

     “ Pershing Square Commitment Letter . The Commitment Letter, dated as of March 19, 2008, by and between BGI and Pershing Square Capital Management, L.P., together with all Exhibits attached thereto.”

     “ Pershing Square Purchase Offer . The purchase offer, dated as of the Pershing Square Transaction Effective Date, made by Pershing Square to BGI, pursuant to which BGI may elect to sell, and provided that such sales are consummated on or prior to January 15, 2009 (or, subject to Section 9.5.2(d)(iv)(B), such later date as may be agreed to by BGI and Pershing Square), any or all of the following (directly or through the sale of one or more holding companies with no other assets): (i) one hundred percent (100%) of the Capital Stock of each of the Australian Borrower, Borders New Zealand, Borders Singapore and Paperchase and BGI’s interest in seventeen percent (17%) of the Capital Stock of Borders Bookshop for a minimum aggregate purchase price of $125 million (minus attributable indebtedness and customary purchase price adjustments as contemplated thereunder), (ii) one hundred percent (100%) of the Capital Stock of Paperchase and BGI’s interest in seventeen percent (17%) of the Capital Stock of Borders Bookshop for a minimum aggregate purchase price of $55 million (minus attributable indebtedness and customary purchase price adjustments as contemplated thereunder) or (iii) one hundred percent (100%) of the Capital Stock of Borders Singapore, Paperchase and BGI’s interest in seventeen percent (17%) of the Capital Stock of Borders Bookshop for a minimum aggregate purchase price of $57.5 million (minus attributable indebtedness and customary purchase price adjustments as contemplated thereunder) and, in each case, the documentation related to such proposed purchases (including, without limitation, any stock purchase agreement relating to such purchases), all with terms and conditions materially consistent with the purchase offer transaction described in the Pershing Square Commitment Letter and the terms of the Pershing Square Purchase Offer Documents delivered on or prior to the Pershing Square Transaction Effective Date (except as such documents may be changed in a manner not materially adverse to the Agents and the Lenders).”

     “ Pershing Square Purchase Offer Documents . The Pershing Square Purchase Offer, together with all agreements, documents, instruments and certificates relating to the transactions contemplated thereby, all with terms and conditions materially consistent with the purchase offer described in the Pershing Square Commitment Letter and the terms of the Pershing Square Purchase Offer Documents delivered on or prior to the

Pershing Square Transaction Effective Date (except as such documents may be changed in a manner not materially adverse to the Agents and the Lenders).”

     “ Pershing Square Purchase Offer Subsidiaries . Those Subsidiaries of BGI who are subject to the purchase offer under the Pershing Square Purchase Offer Documents, who are the Australian Borrower, Borders New Zealand, Borders Singapore and Paperchase.”

     “ Pershing Square Term Loan Agent . Pershing Square, in its capacity as term administrative agent and collateral agent under the Pershing Square Term Loan Documents and any successor or permitted assigns of Pershing Square in such capacity.”

     “ Pershing Square Term Loan Documents . The term loan agreement dated on or about the Pershing Square Transaction Effective Date, among BGI, the Pershing Square Term Loan Agent, the Pershing Square Term Loan Lenders and the other parties thereto, together with all agreements, documents, instruments and certificates relating to the transactions contemplated thereby, all with terms and conditions materially consistent with the term loan transaction described in the Pershing Square Commitment Letter and the terms of the Pershing Square Term Loan Documents delivered on or prior to the Pershing Square Transaction Effective Date (except as such documents may be changed in a manner not materially adverse to the Agents and the Lenders).”

     “ Pershing Square Term Loan Facility . That certain term loan facility in an aggregate principal amount not to exceed $42,500,000 to be provided to BGI by the Pershing Square Term Loan Agent and the Pershing Square Term Loan Lenders pursuant to the Pershing Square Term Loan Documents.”

     “ Pershing Square Term Loan Lenders . Collectively, the lenders under the Pershing Square Term Loan Documents.”

     “ Pershing Square Term Loan Payment . See §9.19.”

     “ Pershing Square Transaction Effective Date . The date upon which the conditions to effectiveness of all of the Pershing Square Term Loan Facility are satisfied or waived in accordance with the terms thereof, the transactions contemplated thereby are consummated (including the issuance of the Pershing Square Warrants and the receipt by BGI of the Pershing Square Purchase Offer) and BGI receives the net proceeds from the Pershing Square Term Loan Facility.”

     “ Pershing Square Transactions . Collectively, the transactions contemplated by the Pershing Square Term Loan Documents, the transactions contemplated by the Pershing Square Purchase Offer Documents and the Pershing Square Warrant Transaction, including without limitation the performance by BGI and its Subsidiaries of their respective obligations thereunder.”

     “ Pershing Square Warrants . The warrants to purchase common stock issued by BGI to Pershing Square on the Pershing Square Transaction Effective Date under the Pershing Square Warrant Transaction, and including any stock appreciation rights and/or derivatives issued in lieu of all or a portion thereof under the Pershing Square Warrant Transaction.”

     “ Pershing Square Warrant Transaction . The issuance by BGI to Pershing Square on the Pershing Square Transaction Effective Date of warrants to purchase BGI common stock at $7.00 per share for a term of 7.5 years (and including any stock appreciation rights or derivatives issued in lieu thereof or in addition thereto), such warrants to represent 19.99% of the fully-diluted shares of BGI on a pro forma basis giving effect to the issuance of the shares underlying such warrants (but excluding employee stock options, and any obligations in respect thereof) and/or the issuance of stock appreciation rights or derivatives in lieu of Pershing Square Warrants, all on terms and conditions materially consistent with the warrant transaction described in the Pershing Square Commitment Letter and the terms of the documents relating to the Pershing Square Warrant Transaction delivered on or prior to the Pershing Square Transaction Effective Date (except as such documents may be changed in a manner not materially adverse to the Agents and the Lenders).”

     “ Third Amendment Effective Date . April 9, 2008.”

      (j) Amendment to §2.2.1 of the Credit Agreement . Section 2.2.1 of the Credit Agreement is hereby amended by deleting the reference to “0.20%” in such Section 2.2.1 and substituting “0.25%” in lieu thereof.

      (k) Amendment to §4.1.1 of the Credit Agreement . Section 4.1.1 of the Credit Agreement is hereby amended by amending and restating the clause “one or more standby or documentary letters of credit” of the first sentence of such Section 4.1.1 in its entirety as follows:

     “one or more standby or documentary letters of credit, including without limitation, any bankers’ acceptance issued on account of any such standby or documentary letter of credit”

      (l) Amendment to §6.1 of the Credit Agreement . Section 6.1 of the Credit Agreement is hereby amended by adding the following new sentence at the end of such section:

     “Notwithstanding anything to the contrary contained in this Section 6, the parties hereto agree that Paperchase shall not be required to be a guarantor of any of the Obligations hereunder.”

      (m) Amendment to §8.5 of the Credit Agreement . Section 8.5 of the Credit Agreement is hereby amended by adding the following new Sections 8.5.7, 8.5.8 and 8.5.9:

     “ Section 8.5.7. [Reserved].

      Section 8.5.8. Notice of Default under the Pershing Square Term Loan Documents .

     The Borrowers shall, and shall cause each of their Subsidiaries to, deliver to the Lenders notice of any occurrence of any Event of Default (or event or circumstance that with the giving of notice or the passage of time, or both, could become an Event of Default) under the Pershing Square Term Loan Documents, such delivery to be made promptly after becoming aware of such event or circumstance or after such notice or other communication is received by any such Borrower or any such Subsidiary.”

      Section 8.5.9. Notices under the Pershing Square Purchase Offer Documents and the Pershing Square Warrant Transaction .

     The Borrowers shall, and shall cause each of their Subsidiaries to, deliver to the Lenders notice of (a) BGI’s exercise of any of its purchase options under the Pershing Square Purchase Offer prior to or concurrently with the delivery of any purchase option notice delivered to Pershing Square pursuant to the terms of the Pershing Square Purchase Offer Documents, (b) any default or event of default under the Pershing Square Purchase Offer by any party thereto promptly after becoming aware thereof and (c) any notice of election to exercise or otherwise settle any of the Pershing Square Warrants, such delivery to be made promptly after becoming aware of any such notice.”

      (n) Amendment to §8.9 of the Credit Agreement . Sections 8.9.2 and 8.9.3 of the Credit Agreement are hereby amended and restated in their entirety as follows:

     “8.9.2 Collateral Reports . Up to four (4) times in each Fiscal Year, and more frequently upon the request of the Administrative Agent, the Borrowers will obtain and deliver to the Administrative Agent, or, if the Administrative Agent so elects, will cooperate with the Administrative Agent in the Administrative Agent’s obtaining, a report of an independent collateral auditor satisfactory to the Administrative Agent (which may be affiliated with one of the Lenders) with respect to the Accounts Receivable and inventory components included in the Aggregate Borrowing Base and/or the Domestic Borrowing Base and/or the Last Out Borrowing Base, which report shall indicate whether or not the information set forth in the Borrowing Base Report most recently delivered is accurate and complete in all material respects based upon a review by such auditors of such Accounts Receivable (including verification with respect to the amount, aging, identity and credit of the respective account debtors and the billing practices of the Borrowers or its applicable Subsidiary) and inventory (including verification as to the value, location and respective types). Such collateral value reports shall be conducted at the Borrowers’ expense no more frequently than four (4) times during each Fiscal Year, unless an Event of Default has occurred and is continuing, in which event additional collateral value reports requested by the Administrative Agent shall also be conducted and made at the expense of the Borrowers.

     8.9.3 Appraisals .

     Up to four (4) times in each Fiscal Year, and more frequently upon the request of the Administrative Agent, the Borrowers will obtain and deliver to the Administrative Agent appraisal reports in form and substance and from appraisers satisfactory to the Administrative Agent, stating the then current fair market, orderly liquidation and forced liquidation values of all or any portion of the inventory owned by the Borrowers and their Subsidiaries. Such appraisals shall be conducted at the Borrowers’ expense no more frequently than four (4) times during each Fiscal Year, unless an Event of Default has occurred and is continuing, in which event additional appraisals requested by the Administrative Agent shall also be conducted and made at the expense of the Borrowers.”

      (o) Amendment to §9.2 of the Credit Agreement . Section 9.2 of the Credit Agreement is hereby amended by (a) amending and restating §9.2(xiv) of the Credit Agreement in its entirety as set forth below; (b) amending and restating §9.2(xv) of the Credit Agreement in its entirety as set forth below and (c) adding the following new §9.2(xvi) of the Credit Agreement:

     “(xiv) (A) Liens securing Indebtedness under the Pershing Square Term Loan Facility (as in effect on the Pershing Square Transaction Effective Date) on up to sixty-five percent (65%) of the Capital Stock of Paperchase (together with any “proceeds” thereof as such term is defined in the Uniform Commercial Code of the State of New York), whether such Liens are directly on the Capital Stock of Paperchase or indirectly on the Capital Stock of Paperchase through intermediate Subsidiaries of BGI or (B) at any time that the Liens described in §9.2(xiv)(A) are not in effect, Liens on assets of BGI and its Subsidiaries (other than Collateral) not otherwise permitted by clauses (i) through (xiii) above, so long as any Indebtedness secured thereby is permitted under the terms of §9.1, and the aggregate fair market value of all property secured by such Liens does not at any time exceed 10%