exv10w43



 





Exhibit 10.43




DATED                 2007




(1) BOOKSHOP ACQUISITIONS LIMITED




(2) LUKE JOHNSON




(3) BGI (UK) LIMITED




 






SUBSCRIPTION AND

SHAREHOLDERS’ AGREEMENT




 





















 








CONTENTS




	 	 	 	 	 	 	 
	Clause	 	 	 	Page	 
	 
	1
	 	INTERPRETATION	 	 	1	 
	2
	 	COMPLETION	 	 	4	 
	3
	 	PROVISION OF INFORMATION AND APPOINTMENT OF OBSERVER	 	 	5	 
	4
	 	MATTERS REQUIRING CONSENT	 	 	5	 
	5
	 	NEW SHAREHOLDERS	 	 	5	 
	6
	 	ANNOUNCEMENTS	 	 	6	 
	7
	 	COSTS, FEES AND EXPENSES	 	 	6	 
	8
	 	SUPREMACY OF THIS AGREEMENT	 	 	6	 
	9
	 	ENTIRE AGREEMENT AND NON-RELIANCE	 	 	7	 
	10
	 	GENERAL	 	 	7	 
	11
	 	NOTICES	 	 	8	 
	12
	 	GOVERNING LAW AND JURISDICTION	 	 	8	 
	SCHEDULE 1 - DETAILS OF THE COMPANY AT THE DATE OF THIS AGREEMENT	 	 	9	 
	SCHEDULE 2 - DEED OF ADHERENCE	 	 	10	 
	SCHEDULE 3 - INFORMATION RELATING TO THE GROUP	 	 	14	 
	SCHEDULE 4 - MATTERS REQUIRING CONSENT	 	 	15	 
	SCHEDULE 5 - DETAILS OF THE COMPANY IMMEDIATELY AFTER COMPLETION	 	 	16	 
	 
	Agreed Form Documents	 	 	 	 
	 
	Loan Note Instrument	 	 	 	 






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THIS AGREEMENT is made on            2007




BETWEEN





	(1)	 	BOOKSHOP ACQUISITIONS LIMITED a Company incorporated under the laws of England and Wales with
registered number 6301376 and having its registered office at 32 Bedford Row, London WC1R 4HE
(the “Company”);
	 
	(2)	 	LUKE JOHNSON, of 32 Clarendon Gardens, London, W9 1AZ; and
	 
	(3)	 	BGI (UK) LIMITED, a company incorporated in England and Wales (registered number 3434022),
whose registered office is at 100 New Bridge Street, London EC4V 6JA (“Borders”).





INTRODUCTION





	(A)	 	The Company intends to acquire the entire issued share capital of the Target and Borders
Books Ireland Limited;
	 
	(B)	 	The Company is constituted immediately prior to the date of this Agreement as set out in
Schedule 1 and intended to be constituted immediately after Completion as set out in Schedule
5; and
	 
	(C)	 	This Agreement sets out the terms on which Luke Johnson and Borders are willing to invest in
the Company.





THE PARTIES AGREE as follows:-





	1.	 	INTERPRETATION






	1.1	 	In this Agreement:-





	 	 	 
	“Act ”

	 	means the Companies Act 1985
	 
	 	 
	“A Ordinary Shareholder”

	 	means a person entered in the register of members of the
Company as the holder from time to time of an A Ordinary Share
	 
	 	 
	“A Ordinary Shares”

	 	means the A ordinary shares of 1p each in the capital of the
Company, having the rights and being subject to the
restrictions set out in the Articles of Association
	 
	 	 
	“Articles of Association”

	 	means the new articles of association of the Company in the
agreed form to be adopted prior to Completion pursuant to the
Resolutions and, once adopted, those articles of association
as amended from time to time, and references in this Agreement
to an “Article” shall be construed accordingly
	 
	 	 
	“Board”

	 	means the board of directors of the Company from time to time;
	 
	 	 
	“B Ordinary Shareholder”

	 	means a person entered in the register of members of the
Company as the holder from time to time of a B Ordinary Share
	 
	 	 
	“B Ordinary Shares”

	 	means the B ordinary shares of 1p each in the capital of the
Company, having the rights and being subject to the
restrictions set out in the Articles of Association
	 
	 	 
	“Business Day”

	 	means a day other than a Saturday, Sunday or public holiday in
England and Wales
	 
	 	 
	“Completion”

	 	means the fulfilment by the parties to this Agreement of their
obligations under, and completion of this Agreement in
accordance






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	 	with, Clause 2.1
	 
	 	 
	“Confidential Information”

	 	means all information:-
	 
	 	 
	 

	 	(a)     which is marked as, treated as or is by its nature
confidential and which is used in or otherwise relates to the
business, customers, suppliers, financial, technical or other
affairs of any member of the Group including, without
limitation, information relating to:-

	 
	 	 
	 

	 	(i)      the marketing of goods or services including, without
limitation, customer names and lists and other details of
customers, sales targets, sales statistics, market share
statistics, discount rates, prices, market research reports
and surveys and advertising or other promotional materials;
and

	 
	 	 
	 

	 	(ii)     future projects, business development or planning,
commercial relationships and negotiations; or

	 
	 	 
	 

	 	(b)      which has been supplied to any member of the Group in
confidence; or

	 
	 	 
	 

	 	(c)     in relation to which any member of the Group is bound by
an obligation of confidence to a third party;

	 
	 	 
	“connected person”

	 	has the meaning given to that expression in section 839 Income
and Corporation Taxes Act 1988 and “person connected” shall be
construed accordingly (except that the parties to this
Agreement shall not be deemed to be connected persons solely
because they are parties to the Agreement)
	 
	 	 
	“Dispose”

	 	means, in relation to any share or any legal or beneficial
interest in any share, to:-
	 
	 	 
	 

	 	(a)     sell, assign, transfer or otherwise dispose of it;

	 
	 	 
	 

	 	(b)     create or permit to subsist any Encumbrance over it;

	 
	 	 
	 

	 	(c)     assign any right to it or direct (by way of renunciation
or otherwise) that another person should receive it;

	 
	 	 
	 

	 	(d)     enter into any agreement in respect of the votes or any
other rights attached to the share; or

	 
	 	 
	 

	 	(e)     agree, whether or not subject to any condition precedent
or subsequent, to do any of the foregoing,

	 
	 
	 	 
	 

	 	
and “Disposed” and “Disposal” shall be construed accordingly.
	 
	 	 
	“Dispute”

	 	has the meaning set out in Clause 12.2
	 
	 	 
	“Encumbrance”

	 	means a mortgage, charge, pledge, lien, option, restriction,
right of first refusal, right of pre-emption, third party
right or interest, other encumbrance or security interest of
any kind, or another type of agreement or arrangement having
similar effect
	 
	 	 
	“FSMA”

	 	means the Financial Services and Markets Act 2000 as amended
or 






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its successor legislation
	 
	 	 
	“Group”

	 	means the Company and its subsidiary undertakings from time to
time and “member of the Group” or “Group Company” shall be
construed accordingly
	 
	 	 
	“Investors”

	 	means Luke Johnson, together with any person who acquires A
Ordinary Shares after the date of this Agreement in accordance
with this Agreement and the Articles of Association and who
signs a deed of adherence as an Investor
	 
	 	 
	“Investor Affiliate”

	 	has the meaning set out in the Articles of Association
	 
	 	 
	“Investors’ Solicitors”

	 	means Pinsent Masons of CityPoint, One Ropemaker Street,
London, EC2Y 9AH
	 
	 	 
	“Loan Notes”

	 	means the £11,700,000 unsecured loan notes to be issued by the
Company and to be constituted by the Loan Note Instrument
	 
	 	 
	“Loan Note Instrument”

	 	means the instrument in the agreed form to be executed by the
Company constituting the Loan Notes
	 
	 	 
	“LSE”

	 	means the London Stock Exchange plc
	 
	 	 
	“Majority Investors”

	 	means the holders of at least 51 per cent. of the A Ordinary
Shares from time to time in issue
	 
	 	 
	“New Shareholder”

	 	has the meaning set out in Clause 5.1
	 
	 	 
	“Notice”

	 	has the meaning set out in Clause 11.1
	 
	 	 
	“Observer”

	 	means any person designated to attend meetings of the Board or
any committee of the Board pursuant to Clause 3.2
	 
	 	 
	“Recognised Investment
Exchange”

	 	has the meaning given to it in section 285 FSMA
	 
	 	 
	“Resolutions”

	 	means the written resolutions of the Company in the agreed form
	 
	 	 
	“Share Purchase Agreement”

	 	means the agreement of even date between Borders and the
Company for the sale and purchase of the entire issued share
capital of the Target and Borders Books Ireland Limited
	 
	 	 
	“Target”

	 	means Borders (UK) Limited, a company incorporated in England
and Wales (registered no. 1580771), whose registered office is
at 120 Charing Cross Road, London WC2H 0JR
	 
	 	 
	“Target Group”

	 	means the Target and its subsidiary undertakings at the date
of this Agreement and “member of the Target Group” shall be
construed accordingly







	1.2	 	In this Agreement, a reference to:-






	 	1.2.1	 	a “subsidiary undertaking” or a “group undertaking” is to be construed in
accordance with sections 258 and 259 respectively of the Act and a reference to a
“subsidiary” or “holding company” is to be construed in accordance with section 736 of
the Act;






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	 	1.2.2	 	a document in the “agreed form” is a reference to a document in a form
approved and for the purposes of identification initialled by or on behalf of the
Company, the Investors and Borders;
	 
	 	1.2.3	 	a statutory provision includes a reference to:-






	 	(a)	 	the statutory provision as modified or re-enacted or both
from time to time before the date of this Agreement; and
	 
	 	(b)	 	any subordinate legislation made under the statutory
provision (as so modified or re-enacted) before the date of this Agreement;






	 	1.2.4	 	a “person” includes a reference to any individual, firm, company,
corporation or other body corporate, government, state or agency of a state or any
joint venture, association or partnership, works council or employee representative
body (whether or not having a separate legal personality);
	 
	 	1.2.5	 	a “party” is a reference to a party to this Agreement (either by virtue of
having executed this Agreement or having entered into a deed of adherence to it) and
includes a reference to that party’s legal personal representatives, successors and
permitted assigns, and “parties to this Agreement” shall be construed accordingly;
	 
	 	1.2.6	 	a Clause, paragraph or Schedule, unless the context otherwise requires, is a
reference to a Clause or a paragraph of, or a Schedule to, this Agreement; and
	 
	 	1.2.7	 	(unless the context otherwise requires) the singular shall include the
plural and vice versa.






	1.3	 	Words and expressions defined in the Articles of Association have the same meanings when used
in this Agreement, unless otherwise defined in this Agreement and a reference in this
Agreement to a numbered Article shall be to the corresponding Article in the Articles of
Association.
	 
	1.4	 	The headings in this Agreement do not affect its interpretation.






	2.	 	COMPLETION
	 
	2.1	 	Completion will take place at the offices of Borders’ Solicitors immediately after the
Agreement has been executed. At Completion all of the following shall take place (to the
extent that it has not taken place prior to Completion):-






	 	2.1.1	 	Luke Johnson shall procure that a meeting of the Board is held to approve,
and authorise (or ratify) the execution by the Company of this Agreement, the Share
Purchase Agreement, and the Loan Note Instrument and all matters or documents
contemplated or required by such agreements;
	 
	 	2.1.2	 	Luke Johnson shall procure that the Resolutions are passed;
	 
	 	2.1.3	 	Luke Johnson (having agreed to be a member and having consented to the entry
of his name in the register of members and/or register of noteholders, as appropriate)
shall subscribe in cash for 7,9001 A Ordinary Shares at an aggregate
subscription price of £8,000, and shall subscribe £9,992,000 for £9,992,000 principle
amount of Loan Notes;
	 
	 	2.1.4	 	the Company shall:-






	 	(a)	 	allot and issue to:







 




			
	1	 	The one subscriber share of £1 held by Luke
Johnson was subdivided into 100 Ordinary Shares of 1p each.




4









 











	 	(i)	 	Luke Johnson the A Ordinary Shares and
Loan Notes subscribed by him in accordance with Clause 2.1.3;
	 
	 	(ii)	 	Borders, the B Ordinary Shares and Loan
Notes to be issued to it pursuant to the Share Purchase Agreement;






	 	(b)	 	enter the name of Luke Johnson and Borders in the register
of members of the Company as the registered holder of such shares and in the
register of noteholders of the Company as the registered holder of such Loan
Notes; and
	 
	 	(c)	 	issue and deliver to Luke Johnson and Borders share
certificates and loan note certificates duly executed by the Company.






	2.2	 	Luke Johnson waives any rights of pre-emption and other restrictions on the issue of shares
conferred on him or it which may exist by virtue of the Articles of Association or otherwise
and which may affect or otherwise prevent any subscriptions and allotments made in accordance
with the Acquisition Agreement.
	 
	2.3	 	Luke Johnson and Borders are not obliged to complete this Agreement unless the Company
complies with all its obligations under this Clause 2.






	3.	 	PROVISION OF INFORMATION AND APPOINTMENT OF OBSERVER
	 
	3.1	 	The Company shall supply Borders with the information set out in Schedule 3 and shall use
reasonable endeavours to supply it within the timeframe specified in it.
	 
	3.2	 	Borders shall be entitled to appoint a person as an Observer, to attend and speak but not
vote, at meetings of the Board or any committee of the Board.
	 
	4.	 	MATTERS REQUIRING CONSENT
	 
	4.1	 	Each of the Investors severally undertakes to Borders that he will use his rights and powers
as a director, shareholder or otherwise to procure (so far as he is able) that none of the
acts specified in Schedule 4 shall be carried out without the written consent of Borders.
	 
	4.2	 	The Company undertakes to Borders (except to the extent that this would constitute an
unlawful fetter on its statutory powers, for which purpose each paragraph of Schedule 4 shall
be a separate and severable undertaking by the Company) that none of the acts specified in
Schedule 4 will be carried out by it and that it will use its rights as shareholder or
otherwise to procure (so far as it is able) that none of the acts specified in Schedule 4 are
carried out by any other member of the Group without the written consent of Borders.
	 
	4.3	 	If an Investor, or an Investor’s Affiliate, is proposing to lend any member of the Group any
sum that will have priority over the Loan Notes then prior to the loan of such sum the
Investors shall notify Borders of such intention (providing reasonable details of the amount
and terms) offering it the opportunity to loan a percentage of such sum equal to its
proportion of all Loan Notes in issue at the date of such notice. Such offer shall be open
for acceptance for five Business Days following the date of the notice. At the end of such
offer period, if Borders has not unconditionally accepted the offer, the Investors may proceed
with such loan.
	 
	5.	 	NEW SHAREHOLDERS
	 
	5.1	 	Without prejudice to the provisions in Articles 8, 9 and 10, no shares in the capital of the
Company shall be allotted, issued or Disposed of to a person (other than an Employee) who is
not already a party to this Agreement (a “New Shareholder”) (and the Board shall not enter the
New Shareholder in the register of members) unless:-






	 	5.1.1	 	in the case of the issue or transfer of A Ordinary Shares, the New
Shareholder has executed and delivered a deed of adherence in the form set out in Part
A of Schedule 2; and




5









 












	 	5.1.2	 	in the case of the issue or transfer of B Ordinary Shares, the New
Shareholder has executed and delivered a deed of adherence in the form set out in Part
B of Schedule 2.






	5.2	 	All executed deeds of adherence shall be delivered to and held by the Company (for both
itself and the other parties to the Agreement).
	 
	5.3	 	A person who has entered into a deed of adherence pursuant to this Agreement shall have the
benefit of and be subject to the burden of all the provisions and continuing obligations of
this Agreement as if he had been an original party in the capacity designated in the deed of
adherence, and this Agreement shall be interpreted accordingly. Nothing in this Clause 5.3
shall affect a party’s accrued rights and obligations under this Agreement or shall be
construed as requiring any party to perform again any obligation or discharge again any
liability already performed or discharged, or as entitling any party to receive again any
benefit already enjoyed.
	 
	5.4	 	The parties hereby agree that up to 1,764 of the authorised but unissued “C” Ordinary Shares
(the “Allocated Shares”) in existence as at the date of this Agreement may be offered and
issued to Employees appointed by the Majority Investors, whether by way of subscription for
shares or the granting of options.
	 
	5.5	 	Without prejudice to Clause 5.4, each of the parties to this Agreement hereby waives any and
all pre-emptive and other rights such party may have, gives any and all consents and approvals
as may be required, and undertakes to pass such resolutions as may be required whether under
this Agreement or the Articles of Association to the extent necessary to enable the issue of
shares pursuant to an offer made in accordance with Clause 5.4.
	 
	6.	 	ANNOUNCEMENTS
	 
	6.1	 	Subject to Clause 6.2, no announcement, communication or circular concerning the transactions
contemplated by this Agreement shall be made or issued by any party without the written
consent of the Majority Investors.
	 
	6.2	 	Clause 6.1 does not apply to an announcement, communication or circular required by law, by a
rule of a stock exchange or by a governmental authority or other authority with relevant
powers to which a party is subject or submits, whether or not the requirement has the force of
law provided that such announcement, communication or circular shall, so far as is
practicable, be made after consultation with the other parties to this Agreement and after
taking into account the reasonable requirements of the other parties to this Agreement as to
its timing, content and manner of making or despatch.
	 
	7.	 	COSTS, FEES AND EXPENSES
	 
	7.1	 	At Completion, the Company shall pay:-






	 	7.1.1	 	all of Luke Johnson’s costs and expenses (plus any VAT or overseas
equivalent) in connection with the negotiation, preparation, execution and performance
of this Agreement and all documents referred to in it; and
	 
	 	7.1.2	 	the costs and expenses (plus any VAT) of the Investor’s Solicitors and any
other relevant advisers to incurred in connection with the transactions contemplated
by the Share Purchase Agreement and all documents referred to in it.






	8.	 	SUPREMACY OF THIS AGREEMENT
	 
	 	 	If there is any conflict or inconsistency between the provisions of this Agreement and the
Articles of Association or the articles of association of any other member of the Group,
this Agreement shall prevail and, if requested to do so by the Majority Investors, each of
Borders and the Investors will use its rights and powers to procure (so far as it is able) that the terms of the Articles
of Association are amended so as to accord with the provisions of this Agreement and each
of the parties to this Agreement shall procure (so far as it is able) that the articles of
association of any other member of the Group are amended so as to accord with the
provisions of this Agreement.




6









 












	9.	 	ENTIRE AGREEMENT AND NON-RELIANCE
	 
	9.1	 	This Agreement and each document referred to in it constitute the entire agreement and
supersede any previous agreements between the parties to this Agreement relating to the
subject matter of this Agreement.
	 
	9.2	 	Each party acknowledges and represents that it has not relied on or been induced to enter
into this Agreement by a representation, warranty or undertaking (whether contractual or
otherwise) given by the other parties to this Agreement otherwise as expressly set out in this
Agreement or in each document referred to in it.
	 
	9.3	 	No party is liable to another party (in equity, contract or tort (including negligence),
under the Misrepresentation Act 1967 or in any other way) for a representation, warranty or
undertaking that is not set out expressly in this Agreement or in any document referred to in
it.
	 
	9.4	 	Nothing in this Clause 9 shall have the effect of restricting or limiting any liability
arising as a result of any fraud.
	 
	10.	 	GENERAL
	 
	10.1	 	This Agreement may be executed in any number of counterparts, each of which when executed and
delivered is an original and all of which together evidence the same agreement.
	 
	10.2	 	A variation of this Agreement is only valid if it is in writing and signed by or on behalf of
each party.
	 
	10.3	 	The failure to exercise or delay in exercising a right or remedy provided by this Agreement
or by law does not impair or constitute a waiver of the right or remedy or an impairment of or
a waiver of other rights or remedies. No single or partial exercise of a right or remedy
provided by this Agreement or by law prevents further exercise of the right or remedy or the
exercise of another right or remedy.
	 
	10.4	 	The Parties’ rights and remedies contained in this Agreement are cumulative and are not
exclusive of any rights or remedies provided by law.
	 
	10.5	 	Nothing contained in this Agreement (and no action taken by a party pursuant to its terms) is
to be construed as creating a partnership or agency relationship between any of the parties to
this Agreement.
	 
	10.6	 	The invalidity, illegality or unenforceability of any provision of this Agreement does not
affect the continuation in force of the remainder of this Agreement.
	 
	10.7	 	The provisions of this Agreement shall be binding upon the parties’ respective legal personal
representatives, successors and permitted assigns, but such persons shall not be entitled to
the benefit of its provisions unless they have entered into a deed of adherence in accordance
with Clause 5.
	 
	10.8	 	All obligations and undertakings in this Agreement are, unless otherwise provided for herein,
several and not joint or joint and several.
	 
	10.9	 	Except where expressly provided in this Agreement, a person who is not a party to this
Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any
term of this Agreement, but this does not affect any right or remedy of a third party which
exists or is available apart from that Act. Notwithstanding any benefits or rights conferred
by this Agreement on any third party by virtue of the Contracts (Rights of Third Parties) Act
1999, the parties to this Agreement may vary, terminate or rescind this Agreement without obtaining the consent of
any such third party.
	 
	10.10	 	The Company shall not be bound by any provision of this Agreement to the extent that it
would constitute an unlawful fetter on any of its statutory powers, but that provision shall
remain valid and binding as regards the other parties to this Agreement to which it is
expressed to apply.




7









 












	10.11	 	Each of the parties to this Agreement agrees to use its or his reasonable endeavours to take
all such action or procure that all such action is taken as is reasonable in order to
implement the terms of this Agreement or any transaction, matter or thing contemplated by this
Agreement.
	 
	10.12	 	A party’s rights and obligations under this Agreement shall terminate upon them ceasing to
be a Shareholder, provided that such termination shall not prejudice any rights and
obligations accrued prior to such termination, nor prejudice any rights and obligations of any
person to whom they have transferred their shares pursuant to such person’s deed of adherence.
	 
	11.	 	NOTICES
	 
	11.1	 	Any notice or other communication under or in connection with this Agreement (a “Notice”)
shall be:-






	 	11.1.1	 	in writing and in English;
	 
	 	11.1.2	 	delivered personally or sent by first class post, pre-paid recorded delivery (and
air mail if overseas) or by fax to the party due to receive the Notice at the address
referred to in Clause 11.2 or such other address as a party may specify by not less
than seven days’ notice in writing to the other parties received before the Notice was
despatched; and
	 
	 	11.1.3	 	copied to the Investors’ Solicitors (marked for the attention of Tom Leman and
Gareth Edwards).






	11.2	 	For the purposes of Clause 11.1.2, notices shall be given to the addresses set out in the
case of Luke Johnson, Borders or the Company at the front of this Agreement (for notices
served on Borders or the Company, marked “for the attention of the Company Secretary”).
	 
	11.3	 	Unless there is evidence that it was received earlier, a Notice is deemed given if:-






	 	11.3.1	 	delivered personally, when left at the address referred to in Clause 11.1;
	 
	 	11.3.2	 	sent by post other than air mail, two Business Days after posting it; and
	 
	 	11.3.3	 	sent by air mail, six Business Days after posting it.






	12.	 	GOVERNING LAW AND JURISDICTION
	 
	12.1	 	This Agreement is governed by English law.
	 
	12.2	 	The courts of England have exclusive jurisdiction to settle any dispute arising from or
connected with this Agreement (a “Dispute”), including a dispute regarding the existence,
validity or termination of this Agreement or the consequences of its nullity.
	 
	12.3	 	The parties to this Agreement agree that the courts of England are the most appropriate and
convenient courts to settle any Dispute and, accordingly, that they will not argue to the
contrary.




IN WITNESS WHEREOF this Agreement has been executed by the parties to this Agreement and is
intended to be and is delivered as a deed on the date written at the beginning of this Agreement.




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SCHEDULE 1




DETAILS OF THE COMPANY AT THE DATE OF THIS AGREEMENT




AUTHORISED AND ISSUED SHARE CAPITAL




MEMBERS




	 	 	 
	 	 	Number of A Ordinary
	Name	 	Shares of 1p each
	 	 	 
	Luke Johnson
	 	100






DIRECTORS




	 	 	 
	Name	 	Address
	 
	 	 
	Luke Johnson
	 	32 Clarendon Gardens, London W9 1AZ
	 
	 	 
	Mark Farrer-Brown
	 	Flat 15, 22 Brook Mews North, London






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SCHEDULE 2




DEED OF ADHERENCE




Part A



THIS DEED OF ADHERENCE is made on [   ] 200[   ]



BY [   ] of [   ] (the “Covenantor”) in favour of the persons whose names are set out in the
Schedule to this Deed [and for the benefit of any other person who becomes a party to the Agreement
(as subsequently defined) after the date of this Deed] and is SUPPLEMENTAL to a Subscription and
Shareholders’ Agreement dated [   ] 2007 made by (1) Bookshop Acquisitions Limited (the
“Company”), (2) Luke Johnson and (3) Borders (the “Agreement”).




INTRODUCTION:





	(A)	 	The Covenantor has agreed to acquire shares [and loan notes] in the capital of the Company.
	 
	(B)	 	This Deed is made in compliance with Clause 5.1.1 of the Agreement under which it is a
condition of the transaction referred to in (A) above that the Covenantor executes a deed of
adherence to the Agreement prior to such acquisition.
	 
	(C)	 	Words and expressions defined in the Agreement shall have the same meaning when used in this
Deed.





THIS DEED WITNESSES as follows:-





	1.	 	The Covenantor confirms that it has been given and has read a copy of the Agreement and,
pursuant to Clause 5.1.2 of the Agreement, covenants with and for the benefit of each person
named in the Schedule to this Deed and for the benefit of any other person who becomes a party
to the Agreement after the date of this Deed to perform, comply with and be bound by all the
terms of the Agreement in so far as they remain to be observed (except Clause 2 (Completion))
as if the Covenantor was an original party to the Agreement and was named in it as an Investor
with the intent that the Covenantor shall also be entitled to the benefit of the Agreement as
if it had been an original party to the Agreement and was named in it as an Investor.
	 
	2.	 	The Covenantor covenants to acquire from [   ] [   ] A Ordinary Shares at a price of [   ]
per share and the principal amount of [   ] unsecured Loan Notes at par value and agrees to
hold such shares with the benefit of the rights, and subject to the restrictions, set out in
the memorandum of association of the Company and the Articles of Association and consents to
its name being entered in the register of members of the Company as the holder of the shares
acquired, and agrees to hold such Loan Notes on the terms of the Loan Note Instrument and
consents to its name being entered in the register of noteholders of the Company in respect of
the Loan Notes acquired.
	 
	3.	 	If the Covenantor is beneficially entitled to shares in the Company which are held from time
to time by a nominee or trustee who is not a party to this Agreement, it undertakes to the
other parties to this Agreement to procure that the nominee or trustee observes the provisions
of this Agreement which would be binding on it if it were named in this Agreement as an
Investor.
	 
	4.	 	The address of the Covenantor for the purposes of Clause 11 (Notices) of the Agreement is as
follows:-
	 
	 	 	Fax No:      [                    ]





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	 	 	(attention of:                               [          ])
	 
	5.	 	This Deed is governed by English law and the Covenantor agrees to submit to the exclusive
jurisdiction of the courts of England. The terms of Clause 12 (Governing Law and
Jurisdiction) of the Agreement shall apply to the Deed as if it was incorporated in it.




IN WITNESS WHEREOF this Deed has been executed by the Covenantor and is intended to be and is
delivered as a deed on the date written at the beginning of this Deed.




SCHEDULE



[Parties to Agreement]




11









 








Part B



THIS DEED OF ADHERENCE is made on [   ] 200[   ]



BY [   ] of [   ] (the “Covenantor”) in favour of the persons whose names are set out in the
Schedule to this Deed [and for the benefit of any other person who becomes a party to the Agreement
(as subsequently defined) after the date of this Deed] and is SUPPLEMENTAL to a Subscription and
Shareholders’ Agreement dated [   ] 2007 made by (1) Bookshop Acquisitions Limited (the
“Company”), (2) Luke Johnson and (3) Borders (the “Agreement”).




INTRODUCTION:





	(A)	 	The Covenantor has agreed to acquire shares [and loan notes] in the capital of the Company.
	 
	(B)	 	This Deed is made in compliance with Clause 5.1.2 of the Agreement under which it is a
condition of the transaction referred to in (A) above that the Covenantor executes a deed of
adherence to the Agreement prior to such acquisition.
	 
	(C)	 	Words and expressions defined in the Agreement shall have the same meaning when used in this
Deed.





THIS DEED WITNESSES as follows:-





	1.	 	The Covenantor confirms that it has been given and has read a copy of the Agreement and,
pursuant to Clause 5.1.2 of the Agreement, covenants with and for the benefit of each person
named in the Schedule to this Deed and for the benefit of any other person who becomes a party
to the Agreement after the date of this Deed to perform, comply with and be bound by all the
terms of the Agreement in so far as they remain to be observed (except Clause 2 (Completion))
as if the Covenantor was an original party to the Agreement and was named in it as Borders
with the intent that the Covenantor shall also be entitled to the benefit of the Agreement as
if it had been an original party to the Agreement and was named in it as Borders.
	 
	2.	 	The Covenantor covenants to acquire from [   ] [   ] B Ordinary Shares at a price of [   ]
per share and the principal amount of [   ] unsecured Loan Notes at par value and agrees to
hold such shares with the benefit of the rights, and subject to the restrictions, set out in
the memorandum of association of the Company and the Articles of Association and consents to
its name being entered in the register of members of the Company as the holder of the shares
acquired, and agrees to hold such Loan Notes on the terms of the Loan Note Instrument and
consents to its name being entered in the register of noteholders of the Company in respect of
the Loan Notes acquired.
	 
	3.	 	If the Covenantor is beneficially entitled to shares in the Company which are held from time
to time by a nominee or trustee who is not a party to this Agreement, it undertakes to the
other parties to this Agreement to procure that the nominee or trustee observes the provisions
of this Agreement which would be binding on it if it were named in this Agreement as Borders.
	 
	4.	 	The address of the Covenantor for the purposes of Clause 11 (Notices) of the Agreement is as
follows:-
	 
	 	 	Fax No:      [                    ]
	 
	 	 	(attention of:                                [          ])





12









 











	5.	 	This Deed is governed by English law and the Covenantor agrees to submit to the exclusive
jurisdiction of the courts of England. The terms of Clause 12 (Governing Law and
Jurisdiction) of the Agreement shall apply to the Deed as if it was incorporated in it.




IN WITNESS WHEREOF this Deed has been executed by the Covenantor and is intended to be and is
delivered as a deed on the date written at the beginning of this Deed.




SCHEDULE



[Parties to Agreement]




13









 








SCHEDULE 3




INFORMATION RELATING TO THE GROUP





	1.	 	The Group’s group accounts (as that term is used in section 227 of the Act) and cash flow
statement for each financial year, the auditors’ report on those accounts, the directors’
report for that year, the notes to those accounts and the auditors’ internal recommendations
report, as soon as practicable, and at the latest within 180 days after the end of that
financial year.
	 
	2.	 	Monthly management accounts in respect of each calendar month.
	 
	3.	 	The monthly management accounts will:-






	 	3.1	 	be supplied as soon as practicable, and at the latest within 21 days after
the end of each month;
	 
	 	3.2	 	be prepared on a consolidated basis for the Group.






	4.	 	Details of any transaction, contract or arrangement entered into between any member of the
Group and any Investor or Investor Affiliate, such details to be provided at or as soon as
reasonably practical after the same has been entered into.




14









 











SCHEDULE 4




MATTERS REQUIRING CONSENT





	1.	 	Any amendment to the Loan Notes (save in respect of any amendment which is required by law or
is made to correct a manifest error);
	 
	2.	 	Any change to the rights attaching to the B Ordinary Shares;
	 
	3.	 	The purchase or redemption by the Company of any share capital of the Company held by an
Investor;
	 
	4.	 	The creation or issue of any class of shares having rights on a sale of the Company, on a
winding up of the Company, in respect of rights to dividends or other distributions or in
respect of votes that are preferential to the shares held by Borders, or the variation of the
rights of any class of shares so as to give them any such preferential rights;
	 
	5.	 	Transfer all or any material parts of its business or assets or of any member of the Group to
any other person other than at fair market value, or the entry into or variation of any
contract or arrangement by any member of the Group with any Investor or Investor Affiliate
other than on arm’s length terms and at fair market value in the ordinary course of business;
	 
	6.	 	Any expansion, development or evolution of the Company’s business or that of the Group being
effected otherwise than through the Company or a subsidiary of the Company;
	 
	7.	 	Agreeing to do any of the matters or things referred to in paragraphs 1 to 9 above
(inclusive) on a conditional, suspensive or any other basis whatsoever.




15









 











SCHEDULE 5




DETAILS OF THE COMPANY IMMEDIATELY

AFTER COMPLETION




AUTHORISED AND ISSUED SHARE CAPITAL




	 	 	 	 	 	 	 	 	 
	 	 	Authorised	 	Issued
	 
	 	 	 	 	 	 	 	 
	A Ordinary Shares

	 	 	96,235	 	 	 	8,000	 
	B Ordinary Shares

	 	 	2,000	 	 	 	2,000	 
	C Ordinary Shares

	 	 	1,765	 	 	 	0	 






MEMBERS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number of A Ordinary	 	Number of B Ordinary	 	Principal Amount
	Name	 	Shares of 1p each	 	Shares of 1p each	 	of Loan Notes
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Luke Johnson

	 	 	8,000	 	 	 	—	 	 	£	9,992,000	 
	Borders

	 	 	—	 	 	 	1,999	 	 	£	1,698,000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Total

	 	 	8,000	 	 	 	1,999	 	 	£	11,690,000	 






DIRECTORS




	 	 	 
	Name	 	Address
	 
	 	 
	Luke Johnson

	 	32 Clarendon Gardens, London, W9 1AZ
	 
	 	 
	Mark Farrer-Brown

	 	Flat 15, 22 Brook Mews North, London






16









 





EXECUTED by the parties:-




	 	 	 	 	 
	EXECUTED as a Deed (but not delivered

	 	)	 
	until the date hereof) by

	 	)	 
	BOOKSHOP ACQUISITIONS LIMITED acting:

	 	)	 
	 
	 	 	 	 
	 

	 	Director /s/ Luke Johnson


	 
	 	 	 	 
	 

	 	Director/Secretary
/s/ Mark Farrer - Brown


	 
	 	 	 	 
	EXECUTED as a Deed (but not delivered

	 	)	 
	until the date hereof) by

	 	)	 
	LUKE JOHNSON

	 	)     /s/ Luke Johnson


	 

	 	)	 
	in the presence of:

	 	)	 
	 
	 	 	 	 
	Signature
of witness: /s/ Paul Amis

	 	 	 	 
	 
	 	 	 	 
	Name of witness: Paul Amis
	 	 	 	 
	 
	 	 	 	 
	Address:
One Ropemaker Street
London

	 	 	 	 
	 
	 	 	 	 
	Occupation: 
	 	 	 	 
	 
	 	 	 	 
	EXECUTED as a Deed (but not delivered

	 	)	 
	until the date hereof) by

	 	)     /s/
Edward W. Wilhelm


	BGI (UK) LIMITED acting:

	 	)	 
	 
	 	 	 	 
	 

	 	          Director

	 
	 	 	 	 
	 

	 	          Director/Secretary








17