EXHIBIT 10.12
SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT ("AGREEMENT") made as of November 14, 1994 by
and among ELECTRA INVESTMENT TRUST P.L.C., a corporation organized under
the laws of England ("EIT"), ELECTRA ASSOCIATES, INC., a Delaware
corporation ("ASSOCIATES" and, together with EIT and any permitted
transferee, the "INSTITUTIONAL SHAREHOLDERS"), the individuals listed on
the signature pages hereto (the "INVESTORS", and each, an "INVESTOR", and,
together with the Institutional Shareholders, the "SHAREHOLDERS", and each,
a "SHAREHOLDER") and FAMILY BOOKSTORES COMPANY, INC., a Michigan
corporation (the "COMPANY"). Capitalized terms used and not defined herein
shall have the respective meanings given such terms in the Securities
Purchase Agreement described below.
WHEREAS, the Institutional Shareholders have been granted the right to
purchase certain shares of Common Stock, par value $1.00 per share (the
"COMMON STOCK"), of the Company pursuant to that certain Securities
Purchase Agreement of even date herewith, among the Institutional
Shareholders and the Company (the "SECURITIES PURCHASE AGREEMENT") and the
Warrants, designated as Series A, B, C and D, issued thereunder
(collectively, together with all warrants issued upon transfer, division or
combination, or in exchange or substitution therefor, as provided in the
respective Warrant, the "WARRANTS"). Except as expressly provided to the
contrary herein, for purposes of this Shareholders' Agreement, each holder
of a Warrant, as permitted under the Warrant, shall be treated as if such
holder held that number of shares of the Company's Common Stock or other
securities for which such Warrant may at the time be exercised as if, at
such time, all such Warrants had been exercised in full. Each
Institutional Shareholder shall be deemed to be a Shareholder hereunder and
each share of Warrant Stock (as defined in the Warrants and as provided in
the immediately preceding sentence) shall be deemed to be a Share (as
defined below);
WHEREAS, the Shareholders are the holders of all of the shares of
Common Stock currently outstanding and are the holders of all outstanding
Warrants (such outstanding Common Stock, all shares of Common Stock issued
or issuable from time to time upon exercise of the Warrants, all Common
Stock which is now or may hereafter be held by the Shareholders and all
Common Stock which may be issued to the Shareholders in a dividend,
distribution, reclassification of the Common Stock, spin-off, split-up,
recapitalization, merger, consolidation or any similar corporate event or
arrangement of securities of the Company shall be collectively referred to
herein as the "SHARES");
WHEREAS, the Shareholders desire to promote their mutual interests and
the interests of the Company by providing in this Agreement for the terms
and conditions governing the transfer of shares of Common Stock, the
management and operation of the Company, the relations among the
Shareholders and certain other matters; and
WHEREAS, the Board of Directors of the Company has determined that it
is in the best interests of the Company that the Company enter into this
Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledge, the parties hereby
covenant and agree as follows.
1. GENERAL PROVISIONS
1.1 SHARES SUBJECT TO THIS AGREEMENT. The Shareholders expressly
agree that the terms and restrictions of this Agreement shall apply to all
Shares which any of them now owns or hereafter acquires by any means,
including without limitation by purchase, assignment or operation of law,
or as a result of any stock dividend, stock split, reorganization,
reclassification, whether voluntary or involuntary, or other similar
transaction.
1.2 NO PARTNERSHIP RELATIONSHIP. Notwithstanding, but not in
limitation of, any other provision of this Agreement, the parties
understand and agree that the creation, management and operation of the
Company shall not create or imply a general partnership between or among
the Shareholders and shall not make any Shareholder the agent or partner of
any other Shareholder for any purpose.
2. BOARD OF DIRECTORS
2.1 ELECTION OF DIRECTORS. Each Shareholder agrees that, for so long
as such Shareholder holds any Shares, such Shareholder shall take or cause
to be taken such actions as may be required from time to time to establish
and maintain the number of persons comprising the Board of Directors of the
Company up to a maximum of five (5), prior to the consummation of an
Initial Public Offering and, from and after the consummation of an Initial
Public Offering, for so long as the Institutional Shareholders own at least
10% of the Shares on a Fully Diluted Basis, up to a maximum of eight (8),
as the Shareholders, in their discretion, may determine from time to time,
and to elect two persons (the "INSTITUTIONAL DIRECTORS") designated by the
holders of a majority of the Shares held by the Institutional Shareholders
(the "MAJORITY INSTITUTIONAL SHAREHOLDERS"); PROVIDED, HOWEVER, (i) if the
Institutional Shareholders cease to own at least 10% of the Shares on a
Fully Diluted basis, the Shareholders shall elect one Institutional
Director designated by the Majority Institutional Shareholders, and (ii) if
the Institutional Shareholders cease to own at least 5% of the Shares on a
Fully Diluted basis, the Shareholders shall have no further obligation to
elect Institutional Directors under this Section 2.1. The Company shall
cause such Institutional Directors to be included in the list of persons
nominated by the Company for election as directors of the Company at any
meeting of Shareholders called for such purpose. Without limiting the
-2-
generality of the foregoing, at each annual meeting of the Shareholders,
and at each special meeting of the Shareholders called for the purpose of
electing directors of the Company, and at any time at which the
Shareholders have the right to, or shall, elect directors of the Company,
then, and in each event, the Shareholders shall vote all Shares owned by
them (or shall consent in writing in lieu of a meeting of Shareholders, as
the case may be) to set the number of, and to elect persons as, directors
of the Company in accordance with the preceding provisions of this Section
2.1. It is hereby acknowledged and agreed that nothing herein contained
shall limit or in any way affect any voting rights which Institutional
Shareholders may have.
2.2 REMOVAL OF DIRECTORS; FILLING OF VACANCIES. The Shareholders and
the Company (i) shall each take all actions necessary to remove forthwith
the Institutional Directors when such removal is requested for any reason,
with or without cause, by the Majority Institutional Shareholders, and (ii)
may take action to remove, by the vote of a majority of the outstanding
Shares on a Fully Diluted Basis, any director of the Company for cause. In
the case of the death, resignation or removal as herein provided of the
Institutional Directors, each Shareholder shall vote all Shares directly or
indirectly owned by him to elect another person designated by the Majority
Institutional Shareholders. Unless time is of the essence to take any
action, the Shareholders and the Company each agree to use his or its best
efforts to prevent any action from being taken by the Board of Directors
during the pendency of any vacancy due to the death, resignation or removal
of the Institutional Directors unless the Majority Institutional
Shareholders shall have failed for a period of thirty (30) days after
written notice of such vacancy to designate a replacement.
2.3 AUDIT AND COMPENSATION COMMITTEES. The Shareholders and the
Company shall each take or cause to be taken such actions as may be
required from time to time to establish and maintain audit and compensation
committees of the Board of Directors of the Company, each comprised of no
more than three members, having such duties and responsibilities customary
for such committees, and to elect no more than one of the Institutional
Directors to each of such committees.
2.4 DIRECTOR EXPENSES. The Company shall reimburse the Institutional
Directors for all reasonable out-of-pocket costs and expenses (including
travel expense) incurred in connection with their attendance at meetings of
the Board of Directors or committees thereof consistent with the Company's
general reimbursement policies.
2.5 TRANSFER. The right under this Section 2 to designate any
Institutional Director, and the other rights related thereto set forth in
this Section 2, shall inure to the benefit of, and be enforceable by: (i)
the initial transferee of 50% or more of the Warrants or the shares of
Common Stock issued upon exercise of the Warrants, as permitted thereunder
(the "INITIAL TRANSFEREE"), and (ii) the subsequent transferees of the
-3-
entire interest of such Initial Transferee; PROVIDED, HOWEVER, that (a) so
long as the Institutional Shareholders shall have the right to designate
two Institutional Directors as provided in Section 2.1, then the Initial
Transferee, and the subsequent transferees of such Initial Transferee,
shall have the right to designate one of such two Institutional Directors,
and (b) in the event that the Institutional Shareholders shall have the
right to designate only one Institutional Director as provided in Section
2.1, then EIT and Associates shall have the right to designate such
Institutional Director, PROVIDED, FURTHER, that such right to designate
such Institutional Director shall inure to the benefit of, and be
enforceable by, the transferee of the entire remaining interest of EIT and
Associates in the Warrants.
3. CERTAIN SHAREHOLDER MATTERS
3.1 PERCENTAGE MAINTENANCE.
3.1.1 NOTICE OF NEW ISSUANCE. Subject to Sections 7E and 7Q of
the Securities Purchase Agreement, from and after the date hereof
until the consummation of an Initial Public Offering, except with
respect to "Exempt Issuances" as defined in Section 3.1.3, in the
event that the Company proposes to issue any (i) shares of Common
Stock, (ii) warrants, options or other rights to purchase Common Stock
(collectively, "RIGHTS"), or (iii) any debentures or other securities
convertible into or exchangeable for shares of Common Stock
(collectively, "CONVERTIBLE SECURITIES"), the Company will deliver to
the Institutional Shareholders a notice (the OFFER NOTICE") not more
than 30 nor less than 10 days prior to the completion of such issuance
(the "NEW ISSUANCE"), stating the price and other terms and conditions
thereof. In addition, the Company shall promptly notify each
Institutional Shareholder of any proposed New Issuance upon the
retention of any investment banking or financial advisory firm in
connection with such issuance or upon the execution of any letter of
intent or agreement relating to any such issuance or if any action is
taken by the Board of Directors of the Company concerning any proposal
to make any New Issuance.
3.1.2 RIGHT TO PURCHASE SHARES, RIGHTS OR CONVERTIBLE
SECURITIES. In the event of any proposed New Issuance (other than an
Exempt Issuance), each Institutional Shareholder shall have the right
to purchase with the Investors a pro rata portion of the shares of
Common Stock, Rights or Convertible Securities proposed to be issued
by the Company in such New Issuance at the price and on the terms upon
which the Company proposes to make the New Issuance, such price to be
paid in full, at the time of issuance of such securities to the
Institutional Shareholders, in cash or, if the consideration for such
New Issuance is other than cash, the fair market value of the non-cash
consideration offered, such fair market value to be determined by an
investment banking firm acceptable to the Institutional Shareholders.
-4-
The PRO RATA portion of the shares of Common Stock, Rights or
Convertible Securities proposed to be issued in such New Issuance that
each Institutional Shareholder shall be entitled to purchase hereunder
shall be determined as of the date immediately preceding the proposed
New Issuance, by treating each Institutional Shareholder, for the
purpose of such computation, as the holder of the number of shares of
Common Stock then held by it and the number of shares of Common Stock
which would be issuable to it upon conversion, exercise and exchange
of all Rights and Convertible Securities then held by it and assuming
the like conversion, exercise and exchange of all such securities held
by other persons. The rights set forth in this Section 3.1.2 shall be
exercised by the Institutional Shareholders, if at all, by written
notice to the Company delivered not later than thirty (30) days after
the receipt by the Institutional Shareholders of the Offer Notice in
accordance with the terms and conditions stated therein, and such
right shall expire with respect to each Institutional Shareholder at
the end of the thirtieth day after the day of the receipt by such
Institutional Shareholders of the Offer Notice; PROVIDED, HOWEVER,
that if, subsequent to the Offer Notice, a price change of more than
five percent occurs, or if any change occurs in the type of
consideration to be received by the Company in such New Issuance, the
Company shall provide the Institutional Shareholder with notice of the
change in price or consideration, and the Institutional Shareholder's
rights shall expire at the later of the end of the thirtieth day after
the day of receipt of the original Offer Notice or the fifth day after
receipt of the notice of such change in price or consideration, as the
case may be. The rights of the Institutional Shareholders under this
Section 3.1 shall inure to the benefit of and be enforceable by any
transferee of the Institutional Shareholders which is an Initial
Transferee of the Institutional Shareholders.
3.1.3 EXEMPT ISSUANCES. For purposes of this Agreement,
"Exempt Issuances" are issuances that are otherwise not prohibited by
the Securities Purchase Agreement and the Warrants and in which shares
of Common Stock or Rights or Convertible Securities of the Company are
issued (i) as a dividend or distribution payable pro rata to all
holders of Common Stock or Convertible Securities (in which case the
Institutional Shareholders shall receive additional Shares or Warrants
pursuant to the terms of Section 4 of the Warrants); (ii) to
employees, officers, directors, consultants, advisors and other
persons performing services for the Company pursuant to the
Performance Plan (a "STOCK PLAN ISSUANCE"); (iii) in connection with
the conversion or exercise of any Rights or Convertible Securities
existing on the date hereof or hereinafter issued in compliance
herewith; (iv) pursuant to an Initial Public Offering, the closing of
which is on or after the date hereof; (v) pursuant to Warrants or
Warrant Stock as defined in and pursuant to the Warrants; (vi) with
respect to an issuance of Shares as to which an Institutional
Shareholder has had the opportunity to participate pursuant to this
-5-
Section 3.1 and has elected not to; or (vii) requiring an adjustment
pursuant to Section 4 of the Warrants as a result thereof.
3.2 LEGEND ON STOCK CERTIFICATES. The Company will cause all
certificates or other instruments representing shares of the Company's
Capital Stock, now issued and outstanding or hereafter issued and to which
the provisions of this Agreement apply, to be endorsed conspicuously on the
face thereof with the following legend:
"The shares represented by this certificate are subject to a certain
Shareholders' Agreement, dated as of November 14, 1994, and a Buy and
Sell Agreement, dated as of November 14, 1994, by and among the
Company and the stockholders of the Company, as amended from time to
time, copies of which agreements are available for inspection at the
offices of the Company or may be available upon request."
3.3 VOTING RIGHTS. The Investors agree that for any resolution
submitted to the Investors for a vote or written consent of shareholders of
the Company, (i) the Institutional Shareholders shall receive prompt
written notice of the proposed resolution, and (ii) before the Investors
take any action on such resolution (the "FINAL VOTE"), on a preliminary
basis, the Investors and the Institutional Shareholders will be entitled to
indicate their desired result on such resolution as if the Institutional
Shareholders were shareholders of the Company (the "PRELIMINARY VOTE") by
submitting preliminary votes, by ballot or otherwise. The result of the
Preliminary Vote shall be determined by the persons holding a majority of
the shares that are voted in the Preliminary Vote, unless a higher
percentage would be required by applicable law. For purposes of the
Preliminary Vote, the Institutional Shareholders shall be deemed to hold as
of the record date the number of shares of Common Stock for which any
Warrants that are held by the Institutional Shareholders as of the record
date may at the time be exercised as if, at such time, all such Warrants
have been exercised in full. Each Investor agrees that for so long as such
Investor is a shareholder of the Company, such Investor shall take or cause
to be taken such actions as may be required to cause the vote or written
consent in the Final Vote to be for or against such resolution as
determined by the result of the Preliminary Vote on the resolution. It is
hereby acknowledged and agreed that nothing herein contained shall limit or
in any way affect the right of any Investor to dissent from any vote of the
shareholders of the Company. Notwithstanding the foregoing, for so long as
the Institutional Shareholders own at least 10% but no more than 28% of the
Shares on a Fully Diluted Basis, the Institutional Shareholders shall have
no rights under this Section 3.3 with respect to the election of directors
of the Company other than the election or removal of Institutional
Directors or the filling of vacancies in respect thereof. The rights under
this Section 3.3 are intended to be for the benefit of all holders from
time to time of the Warrants, in accordance with the provisions thereof,
and shall be enforceable by any such holder.
-6-
4. REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF INSTITUTIONAL SHAREHOLDERS.
Each Institutional Shareholder hereby represents and warrants to the
Company and to each other Shareholder as follows:
(a) ORGANIZATION AND AUTHORITY. Such Shareholder is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated. Such
Shareholder has the corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
(b) CORPORATE ACTION. Such Shareholder has taken all corporate
action necessary for it to enter into this Agreement and to consummate
the transactions contemplated hereby.
(c) BINDING OBLIGATION. This Agreement constitutes a valid and
binding obligation of such Shareholder, enforceable in accordance with
its terms, except to the extent that such enforceability may be
limited by bankruptcy, insolvency and other similar laws affecting the
rights and remedies of creditors generally, and by general principles
of equity.
4.2 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each
Shareholder who is an individual hereby represents and warrants to the
Company and to each other Shareholder as follows:
(a) NO VIOLATION. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will constitute a violation of, or default under, or conflict with, or
require any consent under any term or provision of, any contract,
commitment, indenture, lease or other agreement to which such
Shareholder is a party or by which such Shareholder or any of his
assets is bound.
(b) BINDING OBLIGATION. This Agreement constitutes a valid and
binding obligation of such Shareholder, enforceable in accordance with
its terms, except to the extent that such enforceability may be
limited by bankruptcy, insolvency and other similar laws affecting the
rights and remedies of creditors generally, and by general principals
of equity.
4.3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to the Shareholders as follows:
(a) ORGANIZATION AND AUTHORITY. The Company is a corporation
duly organized, validly existing and in good standing under the laws
of the jurisdiction in which it is incorporated. The Company has the
corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.
-7-
(b) CORPORATE ACTION. The Company has taken all corporate
action necessary for it to enter into this Agreement and to consummate
the transactions contemplated hereby.
(c) BINDING OBLIGATION. This Agreement constitutes a valid and
binding obligation of the Company, enforceable in accordance with its
terms, except to the extent that such enforceability may be limited by
bankruptcy, insolvency and other similar laws affecting the rights and
remedies of creditors generally, and by general principles of equity.
(d) CAPITALIZATION. The Company's representation contained in
Section 9C of the Securities Purchase Agreement is true and complete
as of the date hereof.
5. MISCELLANEOUS
5.1 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a
party may designate by notice hereunder, and shall be either (i) delivered
by hand, (ii) made by telex or facsimile transmission, (iii) sent by
overnight courier, or (iv) sent by registered mail, return receipt
requested, postage prepaid:
If to the Company to:
Family Bookstores Company, Inc.
0000 Xxxxxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: President
With a copy to:
Xxxxxx Xxxxxxxx & Xxxx
000 Xxx Xxxx Xxxxxxxx
000 Xxxx Xxxxxx, X.X.
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Xx., Esq.
If to EIT or Associates:
00 Xxxxxxxx
Xxxxxx, Xxxxxxx XX0X 0XX
Telecopier: 011-44-71-404-5388
Attention: Xxxxxx X. Xxxx
-8-
With copies to:
Electra, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attn: Xxxx X. Xxxxxxxxx, Senior Vice President
With copies to:
Xxxxxxx Xxxx & Xxxxxxxxx
One Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Investors:
To the respective addresses set forth under such Investors' names
on the signature pages hereto.
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the
delivery thereof to the receiving party at the address of such party set
forth above, (ii) if made by telex or facsimile transmission, at the time
that receipt thereof has been acknowledged by electronic confirmation or
otherwise, (iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier service, or (iv)
if sent by registered mail, on the fifth business day following the day
such mailing is made. Any party, by notice to the other parties hereto,
may designate additional or different addresses for subsequent notices or
communications.
5.2 ENTIRE AGREEMENT. This Agreement and the other documents
referenced herein embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersede all
prior oral or written agreements and understandings relating to the subject
matter hereof. No statement, representation, warranty, covenant or
agreement of any kind not expressly set forth in this Agreement shall
affect, or be used to interpret, change or restrict, the express terms and
provisions of this Agreement. The Company and the Shareholders acknowledge
and agree that nothing contained herein shall limit the effect of the
provisions of, or constitute a waiver or consent under, the Securities
Purchase Agreement or the Warrants.
-9-
5.3 AMENDMENTS. The terms and provisions of this Agreement may be
modified or amended only by written agreement executed by the Company, the
Majority Institutional Shareholders and the holders of a majority of the
Shares held by the Investors; PROVIDED, that no amendment or modification
which would materially adversely affect an Investor can be made without the
Investor's written consent.
5.4 WAIVERS AND CONSENTS. The terms and provisions of this Agreement
may be waived, or consent for the departure therefrom may be granted, only
by written document executed by the Company and the Institutional
Shareholders. No such waiver or consent shall be deemed to be or shall
constitute a waiver or consent with respect to any other terms or
provisions of this Agreement, whether or not similar. Each such waiver or
consent shall be effective only in the specific instance and for the
purpose for which it was given, and shall not constitute a continuing
waiver or consent.
5.5 SUCCESSOR AND ASSIGNS. The rights and obligations under this
Agreement may not be assigned by any party hereto unless expressly
permitted by the provisions hereof.
5.6 BENEFIT. All statements, representations, warranties, covenants
and agreements in this Agreement shall be binding on the parties hereto and
shall inure to the benefit of the respective successors and permitted
assigns of each party hereto. Nothing in this Agreement shall be construed
to create any rights or obligations except among the parties hereto, and no
person or entity shall be regarded as a third-party beneficiary of this
Agreement.
5.7 GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereunder shall be construed in accordance with and governed by
the law of the State of New York, without giving effect to the conflict of
law principles thereof.
5.8 JURISDICTION AND SERVICE OF PROCESS. Any legal action or
proceeding with respect to this Agreement shall be brought in the courts of
the State of New York or of the United States of America for the Southern
District of New York. By execution and delivery of this Agreement, each of
the parties hereto accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts but
such acceptance shall be only for any claims or proceedings relating to
this Agreement. Each of the parties hereto irrevocably consents to the
service of process of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by certified mail, postage
prepaid, to the party at its address set forth in Section 5.1 hereof.
5.9 SEVERABILITY. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unenforceable in any respect, then
-10-
such provision shall be deemed limited to the extent that such court deems
it enforceable, and as so limited shall remain in full force and effect.
In the event that such court shall deem any such provision, or portion
thereof, wholly unenforceable, the remaining provisions of this Agreement
shall nevertheless remain in full force and effect.
5.10 INTERPRETATION. The parties hereto acknowledge and agree that:
(i) each party and its or their counsel has reviewed and negotiated, or has
had the opportunity to review and negotiate, the terms and provisions of
this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this
Agreement; and (iii) the terms and provisions of this agreement shall be
construed fairly as to all parties hereto and not in favor of or against
any party, regardless of which party was generally responsible for the
preparation of this Agreement.
5.11 HEADINGS AND CAPTIONS. The headings and captions of the various
subdivisions of this Agreement are for convenience of reference only and
shall in no way modify or affect the meaning or construction of any of the
terms or provisions hereof.
5.12 SPECIFIC PERFORMANCE. Each of the parties hereto acknowledges
and agrees that the rights acquired by each party hereunder are unique and
that irreparable damage would occur in the event that any of the provisions
of this Agreement to be performed by the other parties were not performed
in accordance with their specific terms or were otherwise beached.
Accordingly, in addition to any other remedy to which the parties hereto
are entitled at law or in equity, each party hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement by any
other party and to enforce specifically the terms and provisions hereof in
any federal or state court to which the parties have agreed hereunder to
submit to jurisdiction.
5.13 NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or delay by
a party hereto in exercising any right, power or remedy under this
Agreement, and no course of dealing among the parties hereto, shall operate
as a waiver of any such right, power or remedy of the party. No single or
partial exercise of any right, power or remedy under this Agreement by a
party hereto, nor any abandonment or discontinuance of steps to enforce any
such right, power or remedy, shall preclude such party from any other or
further exercise thereof or the exercise of any other right, power or
remedy hereunder. The election of any remedy by a party hereto shall not
constitute a waiver of the right of such party to pursue other available
remedies. No notice to or demand on a party not expressly required under
this Agreement shall entitle the party receiving such notice or demand to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the party giving such notice or demand
to any other or further action in any circumstances without such notice or
demand.
-11-
5.14 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants made by the parties hereto in
this Agreement or in any other agreement, certificate or instrument
provided for or contemplated hereby, shall survive (i) the execution and
delivery hereof, and (ii) any investigations made by or on behalf of the
parties, and shall remain in full force and effect for a period of ten (10)
years following the date hereof. No claim shall be made by a party for any
alleged misrepresentation or breach of warranty by the other party unless
notice for such claim shall have been given to the other party in
accordance with the notice provisions hereof prior to the expiration of the
survival period specified above with respect to such representation or
warranty.
5.15 EXPENSES. It is hereby agreed that the Company shall pay the
reasonable fees and expenses (including the reasonable fees of any
attorneys, accountants, appraisers or others engaged by such party) of the
Institutional Shareholders in connection with the preparation or
enforcement of, or of any requests for consents or waivers under, this
Agreement, including any subsequent amendments or waivers; PROVIDED,
HOWEVER, that the Company shall be obligated to reimburse the Institutional
Shareholders for such fees of only a single attorney, accountant, appraiser
or other person, as applicable, engaged on behalf of the Institutional
Shareholders, and such fees shall exclude any fees for services and costs
related to any disputes among the Institutional Shareholders with respect
to any consent or waiver under or enforcement of this Agreement.
5.16 NO BROKER OR FINDER. Each of the parties hereto represents and
warrants to the others that no broker, finder or other financial
consultant, has acted on its behalf in connection with this Agreement or
the transactions contemplated hereby in such a way as to create any
liability on the other. Each of the parties hereto agrees to indemnify and
save the others harmless from any claim or demand for commission or other
compensation by any broker, finder, financial consultant or similar agent
claiming to have been employed by or on behalf of such party and to bear
the cost of legal expenses incurred in defending against any such claim.
5.17 PUBLICITY. No party shall issue any press releases or otherwise
make any public statement with respect to the transactions contemplated by
this Agreement without the prior written consent of the other parties,
except as may be required by law.
5.18 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
5.19 CERTAIN TRANSFERS. Notwithstanding the foregoing, no Shares held
by the Investors may be sold, transferred or otherwise disposed of unless
the transferee of such Shares agrees in writing to be bound by all terms of
this Agreement.
-12-
5.20 INAPPLICABILITY TO CERTAIN LENDERS. Except (a) with respect to
the election of directors of the Company to the extent and as provided in
Sections 2.1, 2.2 and 2.3 hereof (whether before or after any acceleration
of the maturity of the Loans or the Agent's foreclosure on any pledged
shares), (b) with respect to the provisions of Section 3.3 hereof (but not
after any acceleration of the maturity of the Loans or any foreclosure by
the Agent on any pledged shares), and (c) with respect to preemptive rights
as provided in Section 3.1 of this Agreement, nothing contained in this
Agreement shall be applicable to (w) the Bank of Scotland, either
individually or as a Bank party to the Loan Agreement, (x) any other
financial institution from time to time party to the Loan Agreement (but
only in its capacity as a "Bank" under the Loan Agreement), (y) the Bank of
Scotland (or any successor agent) in its capacity as agent for the Banks
(the "AGENT"), or (z) any Bank Transferee.
As used in this Section 5.20, the following terms have the following
meanings:
"LOANS" shall have the meaning provided for such term in the Loan
Agreement.
"BANK TRANSFEREE" shall mean and include (a) each Person (an "INITIAL
BANK TRANSFEREE") who acquired any equity security issued by the Company
from any person or entity referenced in any of clauses (w), (x) or (y)
above and (b) each Person who acquires the relevant (or any successor)
shares, directly or indirectly, from any Initial Bank Transferee or any
subsequent transferee.
The provisions of this Section 5.20 may not be amended, supplemented
or otherwise modified without the consent of the Bank of Scotland and (if
different) the Agent.
IN WITNESS WHEREOF, the parties hereto have executed this
Shareholders' Agreement or caused this Shareholders' Agreement to be
executed by their duly authorized representatives, as of the date first
written above.
FAMILY BOOKSTORES COMPANY, INC.
By: /S/ XXXXXX X. XXXXXXXX
----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
-13-
ELECTRA INVESTMENT TRUST P.L.C.
By:_____________________________
Name:
Title:
ELECTRA ASSOCIATES, INC.
By:_________________________________
Name:
Title:
-14-
IN WITNESS WHEREOF, the parties hereto have executed this
Shareholders' Agreement or caused this Shareholders' Agreement to be
executed by their duly authorized representatives, as of the date first
written above.
FAMILY BOOKSTORES COMPANY, INC.
By:_____________________________
Name:
Title:
ELECTRA INVESTMENT TRUST P.L.C.
By: /S/ H.A.L.H. MUMFORD
----------------------------
Name: H.A.L.H. Mumford
Title: Director
ELECTRA ASSOCIATES, INC.
By: /S/ X.X. XXXXX
----------------------------
Name: X.X. Xxxxx
Title: Director
INVESTORS:
/S/ XXXXXX XXXXX
----------------------------
Name: Xxxxxx Xxxxx
/S/ XXXXXX X. XXXXXXXX
----------------------------
Name: Xxxxxx X. Xxxxxxxx
NBD Bank, N.A., Trustee for the
Xxxxxx X. Xxxxxxxx Individual
Retirement Account
By:_____________________________
Name:
Title:
/S/ XXXX XXXXXX
----------------------------
Name: Xxxx Xxxxxx
-15-
Xxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx,
Co-Trustees of the Xxxxx X. Xxxxxxx Living
Trust
By:_________________________________
Name: Xxxxx X. Xxxxxxx
Title: Co-Trustee
By:_________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Co-Trustee
Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx,
Co-Trustees of the Xxxxxxx X. Xxxxxxx Living
Trust
By:_________________________________
Name: Xxxxx X. Xxxxxxx
Title: Co-Trustee
By:_________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Co-Trustee
INVESTORS:
____________________________________
Name: Xxxxxx Xxxxx
____________________________________
Name: Xxxxxx X. Xxxxxxxx
NBD Bank, N.A., Trustee for the
Xxxxxx X. Xxxxxxxx Individual
Retirement Account
By: /S/ XXXXXXX X. XXXX
----------------------------
Name: Xxxxxxx X. Xxxx
Title: Assistant Vice President & Trust
Officer
________________________________
Name: Xxxx Xxxxxx
-16-
Xxxxx X .Xxxxxxx and Xxxxxxx X. Xxxxxxx,
Co-Trustees of the Xxxxx X. Xxxxxxx
Living Trust
By: /S/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-Trustee
By: /S/ XXXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Co-Trustee
Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx,
Co-Trustees of the Xxxxxxx X. Xxxxxxx
Living Trust
By: /S/ XXXXX X. XXXXXXX
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-Trustee
By: /S/ XXXXXXX X. XXXXXXX
---------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Co-Trustee
INVESTORS:
____________________________________
Name: Xxxxxx Xxxxx
____________________________________
Name: Xxxxxx X. Xxxxxxxx
NBD Bank, N.A., Trustee for the
Xxxxxx X. Xxxxxxxx Individual
Retirement Account
By:_________________________________
Name:
Title:
____________________________________
Name: Xxxx Xxxxxx
-17-
Xxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx,
Co-Trustees of the Xxxxx X. Xxxxxxx Living
Trust
By: /S/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-Trustee
By: /S/ XXXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Co-Trustee
Xxxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx,
Co-Trustees of the Xxxxxxx X. Xxxxxxx
Living Trust
By: /S/ XXXXX X. XXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Co-Trustee
By: /S/ XXXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Co-Trustee
/S/ XXXXXXX X. XXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxx
Old Kent Bank and Trust Company,
Custodian for the Xxxxxxx X. Xxxxxx
Individual Retirement Account
By:_________________________________
Name:
Title:
/S/ XXXXXX X. XXXX
----------------------------
Name: Xxxxxx X. Xxxx
-00-
Xxx Xxxx Xxxx and Trust Company,
Custodian for the Xxxxxx X. Xxxx
Individual Retirement Account
By:_________________________________
Name:
Title:
/S/ XXXXX X. XXXXXX
----------------------------
Name: Xxxxx X. Xxxxxx
Old Kent Bank and Trust Company,
Custodian for the Xxxxx X. Xxxxxx
Individual Retirement Account
By:_________________________________
Name:
Title:
/S/ J. XXX XXXXXX
----------------------------
Name: J. Xxx Xxxxxx
/S/ XXXXXXX X. XXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxx
Old Kent Bank and Trust Company,
Custodian for the Xxxxxxx X. Xxxxxx
Individual Retirement Account
By:/S/______________________________
Name:
Title:
/S/ XXXXXX X. XXXX
----------------------------
Name: Xxxxxx X. Xxxx
-00-
Xxx Xxxx Xxxx and Trust Company,
Custodian for the Xxxxxx X. Xxxx
Individual Retirement Account
By:/S/______________________________
Name:
Title:
/S/ XXXXX X. XXXXXX
----------------------------
Name: Xxxxx X. Xxxxxx
Old Kent Bank and Trust Company,
Custodian for the Xxxxx X. Xxxxxx
Individual Retirement Account
By:/S/______________________________
Name:
Title:
/S/ J. XXX XXXXXX
----------------------------
Name: J. Xxx Xxxxxx
Old Kent Bank and Trust Company,
Custodian for the J. Xxx Xxxxxx
Individual Retirement Account
By:/S/______________________________
Name:
Title:
____________________________________
Name: Xxxxxx Xxxxxxx
____________________________________
Name: Xxxxxxx X. Xxxxx
____________________________________
Name: Xxxxxx Xxxx
-20-
Old Kent Bank and Trust Company,
Custodian for the J. Xxx Xxxxxx
Individual Retirement Account
By:_________________________________
Name:
Title:
____________________________________
Name: Xxxxxx Xxxxxxx
/S/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
/S/ XXXXXX XXXX
Name: Xxxxxx Xxxx
-21-
