EXHIBIT 10.23
ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated as of November 14, 1994 (the
"Agreement"), between FAMILY BOOKSTORES COMPANY, INC., a Michigan corporation
(the "Corporation"), and ELECTRA, INC., a Delaware corporation ("ELECTRA").
R E C I T A L S :
The Corporation, Electra Investment Trust P.L.C., a U.K.
corporation ("EIT"), and Electra Associates, Inc., a Delaware corporation
("Associates" and, together with EIT, the "Purchasers"), have entered into
that certain Securities Purchase Agreement, dated as of November 14, 1994
(the "Securities Purchase Agreement"), pursuant to which the Purchasers have
purchased from the Corporation its senior subordinated notes due 2003 in the
aggregate principal amount of $5,000,000, together with certain warrants in
respect of the Corporation's common stock (collectively the "Financing").
Capitalized terms used and not defined herein shall have the respective
meanings given to such terms in the Securities Purchase Agreement. Electra
has provided valuable financial, consulting and advisory services in
connection with the Financing.
Electra, by and through its officers, employees, agents and
affiliates, has expertise in the fields of management, finance, equity
markets and strategic planning. The Corporation desires to avail itself of
the expertise of Electra in these and other areas in which Electra is
acknowledged to have expertise.
AGREEMENT
The parties hereby agree as follows:
1. SERVICES. The Corporation hereby retains Electra to render
consulting services to the Corporation and its subsidiaries of up to an
aggregate of 50 hours per quarter to be provided by such of Electra's
personnel as Electra shall deem appropriate, and Electra hereby agrees to
render such services, for the period commencing on the date hereof and
continuing during the term of this Agreement. Electra shall render such
consulting services to the Corporation in connection with strategic planning,
financings, acquisitions and dispositions as the Board of Directors of the
Corporation may from time to time reasonably request.
2. TERM. This Agreement shall terminate on the earlier of (i) the
occurrence of a Triggering Event or (ii) the date on which (x) the Purchasers
(or any of their controlled affiliates) cease to own any combination of Common
Stock or Warrants exchangeable into Common Stock, collectively equivalent to at
least 5% of the Common Stock
on a Fully Diluted basis, and (y) the Notes have been repaid in full,
together with any accrued and unpaid interest thereon to the date of
repayment.
3. FEES AND EXPENSES.
(a) As compensation for Electra's consulting services
rendered pursuant to Section 1, so long as this Agreement shall be in effect,
the Corporation shall pay to Electra an annual fee of $100,000, which shall
be payable in four (4) equal quarterly installments of $25,000 each, payable
on the first day of each quarter during each fiscal year of the Corporation,
with the first such quarterly payment to be payable on the Closing Date (with
the first such payment pro rated from the Closing Date to December 31, 1994).
(b) In addition to the fees provided for above, upon
submission of an expense account with reasonably necessary supporting
documentation, the Corporation shall promptly reimburse Electra for
reasonable out-of-pocket costs and expenses incurred in connection with the
performance of the consulting services under this Agreement. Electra's
reimbursement requests will comply with the Company's expense and travel
policies generally available.
4. LATE PAYMENTS; DEFAULT.
(a) In the event that the Corporation shall fail to pay all
or any part of the fees described in Section 3 when due, and the Corporation
does not cure such failure prior to the 10th day of the quarter in which such
payment is due, then Electra shall be entitled to interest on the unpaid
amount equal to 14% per annum until paid.
(b) While a default hereunder is continuing, Electra shall be
excused from rendering any further services pursuant to this Agreement. The
right and privilege of Electra to withhold services is intended to be in
addition to any and all other remedies available because of the Corporation's
default, including Electra's right to payment of all fees set forth herein.
Further, in the event of a default by the Corporation, the Corporation shall
reimburse Electra for all costs and expenses incurred by Electra, including,
without limitation, reasonable attorney's fees, in connection with such
default and any litigation or other proceeds instituted for the collection of
payment due hereunder.
5. INDEMNITY. The Corporation shall indemnify and hold harmless
Electra and its controlling persons, and their respective stockholders,
partners, directors, officers, agents, representatives and employees, to the
full extent lawful, from and against any losses, claims, damages or
liabilities related to or arising out of the specific services rendered under
this Agreement and shall promptly reimburse Electra and any other party
entitled to be indemnified hereunder for all reasonable out-of-pocket
expenses (including attorney's fees and
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expenses) incurred by Electra or any such party in connection with
investigating, preparing or defending any claim in connection with pending or
threatened litigation in which Electra or any other party entitled to be
indemnified hereunder is a party or is threatened or otherwise likely to
become a party. The Corporation will not, however, be responsible for any
claims, liabilities, losses, damages or expenses to the extent they are
finally judicially determined to have resulted primarily from Electra's
willful misconduct after the expiration of all appeals or appeal periods,
recklessness, or material breach of its obligations hereunder. If such
indemnification is for any reason not available, the Corporation shall
contribute to the losses, claims, damages and liabilities involved in such
proportion as it is appropriate to reflect the relative fault of the
Corporation and its subsidiaries on the one hand and Electra on the other
hand. Under no circumstances shall Electra and the other parties entitled to
be indemnified hereunder be responsible for any amounts in excess of the
amount of any fees actually received and retained by Electra. The foregoing
agreement shall be in addition to any rights that Electra or any indemnified
party may have under any of the agreements executed in connection with the
Financing or at common law or otherwise.
The Corporation shall not, without Electra's prior consent, settle
or compromise any pending or threatened claim, action or suit in respect of
which indemnification or contribution may be sought hereunder unless the
foregoing contains an unconditional release of Electra and any other party
entitled to be indemnified hereunder from all liability and obligation
arising therefrom. Electra shall have no liability to the Corporation or any
of its subsidiaries arising out of or in connection with this engagement
except to the extent a loss results to the Corporation or any of its
subsidiaries that is finally judicially determined after the expiration of
all applicable appeals or appeal periods to have resulted primarily from
Electra's willful misconduct, recklessness, or material breach of its
obligations hereunder. The Corporation on its own behalf and on behalf of
each of its subsidiaries, hereby consents to personal jurisdiction, service
and venue in any court in which any claim which is subject to this Agreement
is brought against Electra or any other party entitled to be indemnified
hereunder. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION
ARISING OUT OF OR CONTEMPLATED BY THIS SECTION 5 IS HEREBY WAIVED. The
provisions of this Section 5 shall survive the expiration of this Agreement.
6. LITIGATION EXPENSES. In the event of any litigation or other
proceedings between the Corporation or any of its subsidiaries on the one
hand, and Electra on the other hand, relating to or arising out of this
Agreement, all costs, charges and expenses incurred by the prevailing party
in connection with such litigation or other proceedings (including attorneys'
fees) shall be borne by the other party in such litigation or other
proceedings.
7. NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and shall be deemed sufficient if (i) delivered
in person, (ii) mailed by certified mail or (iii) sent by facsimile
transmission, with a copy sent simultaneously by the U.S. mail,
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as follows:
If to the Corporation, 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 LLP
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 Electra to:
Electra, Inc.
00 X. 00xx Xxxxxx
(00xx Xxxxx)
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
With a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
One Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Any party, by notice to the other parties hereto, may designate additional or
different
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addresses for subsequent notices or communications.
8. PERMISSIBLE ACTIVITIES. Nothing herein shall in any way
preclude Electra from engaging in any business activities or from performing
services for its own account or for the account of others, including, without
limitation, EIT.
9. AMENDMENTS. This Agreement supersedes all prior agreements
among the parties with respect to its subject matter, is intended as a
complete and exclusive statement of the terms of the agreement among the
parties with respect thereto and cannot be changed or terminated orally. The
failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement. A waiver by any party of any breach of this
Agreement shall not operate as, or be construed to be, a waiver of any
subsequent breach. Any waiver must be in writing.
10. CONSULTING RELATIONSHIP. It is understood and agreed that
nothing contained herein shall be deemed to create any employer/employee
relationship or agency relationship between the Corporation or any of its
Subsidiaries, on the one hand, and Electra, on the other hand. No federal,
state or local withholding deductions shall be withheld from the fees payable
to Electra pursuant to this Agreement.
11. JURISDICTION. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against any of the parties in the courts of the State of New York, or
if it has or can acquire jurisdiction, in the United States District Court
for the Southern District of New York, and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue
laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world, whether
within or without the State of New York.
12. MISCELLANEOUS. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns, including any corporation into which the Corporation shall
consolidate or merge or to which it shall transfer substantially all of its
assets. This Agreement may not be assigned by the Corporation and may be
assigned by Electra only to a corporation or other entity controlled by or
under common control with Electra. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such state (without giving
effect to conflict of law rules).
IN WITNESS WHEREOF, the parties hereto have duly executed this
Advisory Agreement as of the day and year first above written.
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FAMILY BOOKSTORES, INC.
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
ELECTRA, INC.
By /s/ Xxxx X. Xxxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President
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