X0202 4 2008-04-09 0 0000940510 BORDERS GROUP INC BGP 0001336528 Pershing Square Capital Management, L.P. 888 SEVENTH AVENUE, 29TH FLOOR NEW YORK NY 10019 0 0 1 0 0001336477 PS Management GP, LLC 888 SEVENTH AVENUE, 29TH FLOOR NEW YORK NY 10019 0 0 1 0 0001336476 Pershing Square GP, LLC 888 SEVENTH AVENUE, 29TH FLOOR NEW YORK NY 10019 0 0 1 0 0001056513 ACKMAN WILLIAM A 888 SEVENTH AVENUE, 29TH FLOOR NEW YORK NY 10019 0 0 1 0 0001432266 BGP Holdings Corp. 888 SEVENTH AVENUE, 29TH FLOOR NEW YORK NY 10019 0 0 1 0 Warrants to purchase shares of common stock 7.00 2008-04-09 4 J 0 9550000 A 2008-04-09 2014-10-09 Common Stock 9550000 9550000 I See footnotes In consideration for certain transactions described in PS Capital's Amendment No. 7 to Schedule 13D filed April 14, 2008, PS I, PSII and BGP (defined below) received warrants to purchase an aggregate of 9,550,000 shares of common stock. PS Capital has agreed not to exercise any warrants or transfer any warrants or shares of common stock of the Issuer until the earlier of (i) January 1, 2009 and (ii) the public announcement of the Issuer's entry into a definitive agreement with respect to, or the completion of, a change of control or other extraordinary transaction involving the Issuer to which PS Capital is not a party, and not to exercise warrants if that would cause a "change of control" under the Issuer's existing credit facility. In addition to Pershing Square Capital Management, L.P. ("PS Capital"), this Form 4 is being filed jointly by PS Management GP, LLC ("PS Management"), Pershing Square GP, LLC ("PSGP"), BGP Holdings Corp. ("BGP") and William A. Ackman, each of whom has the same business address as PS Capital and may be deemed to have a pecuniary interest in securities beneficially owned by the investment funds referred to herein. Represents 3,782,100 warrants beneficially owned by Pershing Square, L.P. ("PSI"), 52,200 warrants beneficially owned by Pershing Square II, L.P. ("PSII") and 5,715,700 warrants beneficially owned by BGP. Each of PSI and PSII is an investment fund for which PS Capital acts as investment adviser and may be deemed the beneficial owner of securities beneficially owned by it. Each of PSI and PSII has ownership interests in BGP and may be deemed beneficial owners of securities beneficially owned by it. PS Management is general partner of PS Capital and may be deemed beneficial owner of securities beneficially owned by it. PSGP is general partner of PSI and PSII and may be deemed beneficial owner of securities beneficially owned by them. Mr. Ackman is the managing member of PSGP and PS Management and may be deemed beneficial owner of securities beneficially owned by them. Each of PS Capital, PS Management, PSGP, BGP and Mr. Ackman disclaims beneficial ownership of the securities reported hereon except to the extent of its or his pecuniary interest therein. /s/ William A. Ackman, Managing Member, PERSHING SQUARE CAPITAL MANAGEMENT, L.P. 2008-04-14 /s/ William A. Ackman, Managing Member, PS MANAGEMENT GP, LLC 2008-04-14 /s/ William A. Ackman, Managing Member, PERSHING SQUARE GP, LLC 2008-04-14 /s/ William A. Ackman 2008-04-14 /s/ William A. Ackman, Authorized Representative, BGP HOLDINGS CORP. 2008-04-14