BORDERS GROUP INC
EXHIBIT 10.50 AMENDMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>f02-ex10_49.htm
<DESCRIPTION>EXHIBIT 10.50 AMENDMENT
<TEXT>
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<head><title>Exhibit 10.49</title></head>
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<H1><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT 10.49</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BORDERS
GROUP, INC.</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AMENDMENT NO. 2<br>
 to the<br>
CREDIT AGREEMENT</FONT></H1>

<br>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This   AMENDMENT   NO.  2
dated as of August 12, 2002 (the  "Amendment") to the CREDIT AGREEMENT is by and
among  BORDERS  GROUP,  INC  ("BGI"),  BORDERS,  INC.  ("Borders"),  WALDEN BOOK
COMPANY,  INC.  ("Walden"),  WALDEN  BOOKS  PROPERTIES,  INC.  ("WPI"),  BORDERS
PROPERTIES,  INC. ("BPI"),  PLANET MUSIC, INC.  ("Planet"),  BORDERS ONLINE, LLC
("OnlineLLC"),  BORDERS  OUTLET,  INC.  ("Outlet"),  BORDERS  FULFILLMENT,  INC.
("Fulfillment"),   THE  LIBRARY,   LTD.   ("Library"),   BORDERS  ONLINE,   INC.
("OnlineInc"),  WILMINGTON TRUST COMPANY,  not in its individual  capacity,  but
solely as Owner  Trustee  ("Owner  Trustee"),  SAM  PROJECT  FUNDING  CORP I, as
Investor ("Investor"), SUNTRUST BANK, as Co-Arranger, Administrative Agent, Real
Estate  Administrative Agent and Documentation Agent, FLEET NATIONAL BANK (f/k/a
Bank Boston,  N.A.), as Co Arranger and Syndication Agent, and the Lenders party
hereto.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,  Owner  Trustee,
Investor, the Co-Arrangers, the Administrative Agent, the Syndication Agent, the
Real Estate Administrative Agent, the Documentation Agent, the Syndication Agent
and the  Lenders  are  parties  to that  certain  Amended  and  Restated  Credit
Agreement  dated as of November 22,  1995,  which was Amended and Restated as of
October 17, 1997, and further amended by the Omnibus Amendment, dated as of June
21, 2002 (the &#147;<U>Omnibus Amendment</U>&#148;), among BGI, Borders, Walden,
WPI, BPI, the Owner Trustee, the Investor, PNC Bank, National Association,  Bank
One, NA, Deutsche Bank Trust Company Americas,  SunTrust Bank and Fleet National
Bank  (as  heretofore   amended,   the   &#147;<U>Credit   Agreement</U>&#148;);
</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
BGI, Borders, Walden, WPI, BPI, Planet, OnlineLLC, Outlet, Fulfillment, Library
and OnlineInc are parties to that certain Guarantee, dated as of November 22,
1995, which was Amended and Restated as of October 17, 1997 and further amended
by the Omnibus Amendment (as heretofore amended, the
&#147;<U>Guarantee</U>&#148;); </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS,
at the Lessees&#146; and the Guarantors&#146; request, the parties hereto,
subject to the terms and conditions hereof, have agreed to amend the Credit
Agreement as set forth herein; </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE,
the parties hereby agree as follows:</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.1.
Defined  Terms.  Capitalized  terms used herein without  definition  that are defined in the Credit  Agreement  shall have
the same meanings herein as in the Credit Agreement.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.2.
Amendments to the Credit  Agreement.  (a) The  definition of "Restricted  Payment  Amount" set forth in Appendix A to the
Credit Agreement is amended and restated in its entirety to read as follows:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U>Restricted
Payment Amount</U>.&#148; means (a) over the term of the Revolving Credit
Agreement, an amount not to exceed the sum of (i) $100,000,000 <U>plus</U> (ii)
the aggregate amount paid to the Company (whether in cash or in shares of the
Company&#146;s stock), from time to time and at any time since the Omnibus
Amendment Effective Date, by officers, employees or directors of the Company or
any of its Subsidiaries in connection with the exercise of options to purchase
shares of the Company&#146;s stock, <U>plus</U> (iii) the realized tax benefit
(as calculated by the Company in a manner satisfactory to the Administrative
Agent) for tax years ending after the Omnibus Amendment Effective Date,
resulting from the exercise, from time to time and at any time since the Omnibus
Amendment Effective Date, of such options or resulting from the lapse, from time
to time and at any time since the Omnibus Amendment Effective Date, of
restrictions on (and vesting of rights in) certain shares of the Company&#146;s
stock subject to the Management Stock Purchase Plan or any similar successor
plan and (b) during any Fiscal Year, an amount not to exceed the sum of (i)
$50,000,000 <U>plus</U> (ii) the aggregate amount paid to the Company (whether
in cash or in shares of the Company&#146;s stock), from time to time and at any
time during such Fiscal Year, by officers, employees or directors of the Company
or any of its Subsidiaries in connection with the exercise of options to
purchase shares of the Company&#146;s stock, plus (iii) the realized tax benefit
(as calculated by the Company in a manner satisfactory to the Bank Agents) for
such Fiscal Year, resulting from the exercise, from time to time and at any time
since January 28, 2002, of such options or resulting from the lapse, from time
to time and at any time since January 28, 2002, of restrictions on (and vesting
of rights in) certain shares of the Company&#146;s stock subject to the
Management Stock Purchase Plan or any similar successor plan. For purposes of
calculating the Restricted Payment Amount, to the extent shares of the
Company&#146;s stock are delivered to the Company in payment of the exercise
price of options, or in payment of taxes associated with the exercise of options
or the vesting of restricted shares, such delivered shares are deemed to be
repurchased by the Company at fair market value (as defined in the
Company&#146;s stock option plan) on the date of delivery to the Company. Such
delivered share repurchases will serve to reduce the available Restricted
Payment Amount. </FONT>
</TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
Section 5.02 of the Credit  Agreement is hereby  amended by deleting the date  "November 1, 2002" that appears in the
second proviso at the end of the first sentence thereof, and substituting therefor the date "December 1, 2002".</FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
Notwithstanding  the  provisions of Section 11.16 of the Guarantee,  the parties hereto hereby agree that,  only with
respect to the five Properties  located in California (the  "California  Properties"),  the Guarantors  shall not be required to comply
with the  provisions  of Section  11.16 of the  Guarantee,  provided,  however,  that on or before  December  1,  2002,  either (i) the
Guarantors  shall cause the Loans related to the  California  Properties  to be repaid in full or (ii) with respect to each  California
Property  which has not been  refinanced  pursuant to clause (i),  the  Guarantor  that is the Lessee with  respect to such  California
Property  will execute and deliver to the Real Estate  Administrative  Agent,  and  appropriate  UCC  financing  statements  (including
fixture  filings) for such  California  Property,  which deed of trust shall directly secure the obligations of the Owner Trustee under
the Credit  Agreement,  and will cause  such deeds of trust to be  recorded  in the  appropriate  recording  offices in the  applicable
jurisdictions.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.3.
Affirmation of the Lessees and  Guarantors.  Each of the Lessees hereby  affirms its absolute and  unconditional  promise
to pay its obligations  under the Operative  Agreements as amended hereby,  at the times and in the amounts provided for therein.  Each
of the Guarantors hereby affirms its guaranty of the Obligations in accordance with the provisions of the Guarantee.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.4.
Conditions to  Effectiveness.  Upon  satisfaction of the following  conditions,  this Amendment shall be deemed effective
as of the date hereof (the "Effective Date"):</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;(a) Operative  Agreements.  This  Amendment  shall have been duly executed and  delivered by the  respective  parties
         thereto, shall be in full force and effect and shall be in form and substance satisfactory to the Required Lenders.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;(b) Corporate  Action.  All corporate  action  necessary for the valid  execution,  delivery and  performance  by the
         Lessees and Guarantors shall have been duly and effectively  taken, and evidence  thereof  satisfactory to the  Administrative
         Agent shall have been provided to the Administrative Agent.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.5.
Representations  and  Warranties.  The Lessees  and the  Guarantors  hereby  represent  and warrant to the other  parties
hereto as follows:</FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;(a)      Representations and Warranties in Credit Agreement.  The representations and warranties of the Lessees,  the
         Guarantors,  and their  Subsidiaries  contained in the Operative  Agreements,  as amended hereby,  are true and correct on the
         date  hereof  (except to the extent of  changes  resulting  from  transactions  contemplated  or  permitted  by the  Operative
         Agreements  and changes  occurring in the  ordinary  course of business  that singly or in the  aggregate  are not  materially
         adverse,  and to the extent that such  representations  and warrants relate  expressly to an earlier date),  and no Default or
         Event of Default has occurred and is continuing.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;(b)      Authority,  No Conflicts,  Etc. The  execution,  delivery and  performance of this Amendment and all related
         documents  and the  consummation  of the  transactions  contemplated  hereby and thereby (a) are within the  corporate (or the
         equivalent  company)  authority of such Person,  (b) have been duly  authorized by all necessary  corporate (or the equivalent
         company)  proceedings,  (c) do not and will not conflict  with or result in any breach or  contravention  of any  provision of
         law, statute,  rule or regulation to which any of the Lessees,  any of the Guarantors or any of their  Subsidiaries is subject
         or any judgment,  order, writ,  injunction,  license or permit applicable to any of the Lessees,  any of the Guarantors or any
         of their  Subsidiaries  and (d) do not conflict with any  provision of the  Governing  Documents of, or any agreement or other
         instrument binding upon, any of the Lessees, any of the Guarantors or any of their Subsidiaries.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;(c)      Enforceability  of  Obligations.  This Amendment and the Credit  Agreement as amended hereby  constitute the
         legal, valid and binding obligations of each Lessee,  each Guarantor and each of their respective  Subsidiaries party thereto,
         enforceable  against  each  Lessee,  each  Guarantor  and each of their  respective  Subsidiaries,  in  accordance  with their
         respective terms, except as limited by bankruptcy,  insolvency,  fraudulent conveyance,  reorganization,  moratorium, or other
         laws relating to or affecting  creditors' rights generally,  general equitable  principles (whether considered in equity or at
         law) and an implied  covenant  of good faith and fair  dealing,  and except to the extent that  availability  of the remedy of
         specific  performance or injunctive relief is subject to the discretion of the court before which any proceeding  therefor may
         be brought.</FONT>
</TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.6.
No Other  Amendments.  Except as expressly  provided in this  Amendment,  all of the terms,  conditions  and provisions of
the Credit  Agreement  and the other  Operative  Agreements  shall  remain the same.  It is declared  and agreed by each of the parties
hereto that the Credit Agreement,  as amended hereby,  shall continue in full force and effect,  and that this Amendment and the Credit
Agreement shall be read and construed as one instrument.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.7.
Execution  in  Counterparts.  This  Amendment  may be  executed  in any  number of  counterparts  and by each  party on a
separate  counterpart,  each of which when so executed and delivered shall be an original,  but all of which together shall  constitute
one instrument.  In proving this Amendment,  it shall not be necessary to produce or account for more than one such counterpart  signed
by the party against whom enforcement is sought.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.8.
Governing  Law. THIS  AMENDMENT IS INTENDED TO TAKE EFFECT AS AN AGREEMENT  UNDER SEAL UNDER THE LAWS OF THE STATE OF NEW
YORK AND SHALL FOR ALL  PURPOSES  BE  CONSTRUED  IN  ACCORDANCE  WITH AND  GOVERNED  BY THE LAWS OF SAID  STATE  WITHOUT  REFERENCE  TO
PRINCIPLES OF CONFLICTS OR CHOICE OF LAW (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.9.
Headings.  Headings or captions used in this  Amendment  are for  convenience  or reference  only and shall not define or
limit the provisions hereof.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ss.10.
Expenses.  The  lessees  jointly  and  severally  hereby  agree to pay to the  Administrative  Agent,  on  demand by the
Administrative  Agent, all reasonable  out-of-pocket costs and expenses incurred or sustained by the Administrative Agent in connection
with the preparation of this Amendment (including reasonable legal fees).</FONT></P>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
IN WITNESS WHEREOF, the parties have executed this Amendment under seal as of the date first
above written.</FONT></P>



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