Exhibit 10.3


 


ADVISORY AGREEMENT


 


This Advisory Agreement (this “Agreement”) is
made and entered into as of April 1, 2004, by and between Samsonite
Corporation, a Delaware corporation (the “Company”), and 1448972 Ontario
Limited, trustee of OTPPB 2004 Trust and a corporation incorporated under the
laws of Ontario, (the “Advisor”), and designee of Ontario Teachers’
Pension Plan Board, a non-share capital corporation established under the laws
of Ontario (“OTPP”).


 


WHEREAS, the Company, OTPP (an affiliate of the
Advisor), ACOF Management, L.P., a Delaware limited partnership (“Ares”), and
Bain Capital (Europe) LLC, a Delaware limited liability company (“Bain” and
together with OTPP and Ares, the “Investors”) are parties to a
Recapitalization Agreement dated May 1, 2003 (the “Recapitalization
Agreement”);


 


WHEREAS, prior to completion of the negotiation of the
transactions contemplated by the Recapitalization Agreement, the Investors
notified the Company that following completion of such transactions they would be
requesting, subject to approval of the Company’s board of directors (the
“Board”), that the Company enter into advisory agreements with each of the
Investors or its designee (the “Agreements”);


 


WHEREAS, the shareholders of Samsonite Corporation, in
the proxy statement mailed to the shareholders of the Company seeking approval
of the transactions contemplated by the Recapitalization Agreement, were
informed of the Investors’ intentions;


 


WHEREAS, the Board desires to ratify management’s use
of the services of certain of the Investors prior to the date hereof and to
retain the Advisor with respect to the services described herein;


 


NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein, the parties agree as follows:


 


1.             Term.  Subject to the provisions for termination
set forth herein, this Agreement shall be in effect for a maximum five-year
term commencing as of July 31, 2003 (the “Effective Date”) and ending on
the fifth anniversary of the Effective Date (the “Term”); provided,
however, the Term shall terminate at such time as OTPP and its affiliates no
longer hold at least 33% of the capital stock of the Company that they owned as
of the date of the closing of the transactions under the Recapitalization
Agreement.  If the Advisor has acted
with willful misconduct or gross negligence in the performance of material
services for the Company hereunder or if the Advisor has materially breached
its obligations hereunder, the Board may terminate this Agreement; provided,
however, that such misconduct, gross negligence or material breach shall not
have been cured and shall be continuing for more than 30 days after receipt by
the Advisor from the Board of written notice detailing such misconduct or gross
negligence.


 


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2.             Services. The Advisor shall
perform or cause to be performed solely outside of the United States such
services for the Company and its subsidiaries as mutually agreed by the Advisor
and the Company in connection with the Company’s and its subsidiaries’
operations in Europe, Asia and certain other designated non-United States
jurisdictions (the “Services”), which may include, without limitation,
the following:


 


(a)           general executive and management
services;


 


(b)           services in obtaining and arranging
equity, debt and lease financing and support, identification, negotiation and
analysis of financing alternatives, including, without limitation, in
connection with mergers, acquisitions, divestitures, capital expenditures and
refinancing of existing indebtedness;


 


(c)           finance functions, including
assistance in the preparation of financial projections, and monitoring of
compliance with financing agreements;


 


(d)           marketing functions, including
monitoring of marketing plans and strategies;


 


(e)           human resource functions, including
searching and hiring of executives; and


 


(f)            other services for the Company and
its subsidiaries in such non-United States jurisdictions upon which the Board
and the Advisor may agree from time to time.


 


3.             Advisory Fee.


 


(a)           During the Term, the Advisor and/or
its designees shall receive an aggregate sum of $500,000 per annum (prorated
for partial years), plus VAT where applicable, payable by the Company on a
quarterly basis in advance (the “Advisory Fee”) (except for the first
two quarterly payments which shall be paid within 30 days of presentation of
invoices for the Advisory Fee from the Advisor to the Company); provided that
the parties to this Agreement agree to work in good faith to structure the
transactions contemplated by this Agreement in a manner tax-efficient for all
parties to the extent reasonably practicable. 
The parties to this Agreement further agree to work in good faith to
structure the transactions contemplated by this Agreement in a manner to
minimize United States withholding and other taxes, provided that if the
parties determine that any portion of the Advisory Fee is subject to United
States withholding or other taxes, the Advisory Fee shall be increased by such
amount as is required such that the Advisor receives an aggregate sum equal to
the amount it would have received pursuant to this Agreement if no such
withholding or other taxes were applicable. 
The Advisory Fee is intended to be a flat fee and, as such, shall be
payable by the Company to the Advisor irrespective of the actual level of
services provided.  In addition, the
Company shall reimburse the reasonable out-of-pocket expenses (“Expenses”) of
the Advisor and/or its affiliates incurred in connection with the Services
subject to the receipt of reasonable supporting documentation satisfactory to
the Company in its reasonable discretion. 
An amount equal to VAT paid by the Advisor on Expenses shall be
reimbursed by the Company


 


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in addition to
such Expenses to the extent that VAT on such Expenses is irrecoverable for the
Advisor (by credit, set off, reimbursement or otherwise).


 


(b)           Notwithstanding the forgoing four
sentences, if the Company is prohibited from paying any portion of the Advisory
Fee pursuant to the Credit Agreement dated July 31, 2003 between the Company,
Samsonite Europe N.V., General Electric Capital Corporation, KBC Bank N.V.,
GECC Capital Markets Group, Inc., and certain other parties thereto, or any subsequent
credit agreement(s) to which the Company is a party (the “Credit Agreements”),
or pursuant to the Indenture, dated as of June 24, 1998, governing the
Company’s 103⁄4% Senior Subordinated Notes due 2008 and any indenture governing
any future issuance of debt instruments issued by the Company (the “Bond
Indentures”), the non-payment of such portion shall not constitute a
default and such portion shall be paid to the Advisor immediately upon such
dates as such payment is no longer prohibited pursuant to the Credit Agreement
or the Bond Indentures and such unpaid portion of the Advisory Fee shall accrue
interest at a rate of 8% per annum (the “Accrued Advisory Fee”);


 


4.             Personnel.  The Advisor shall provide and devote to the
performance of this Agreement such partners, employees and agents of the
Advisor as the Advisor shall deem appropriate to the furnishing of the
Services, provided, however, that any such partners, employees and agents shall
perform the Services in jurisdictions outside of the United States.


 


5.             Liability.  Neither the Advisor nor any of its
affiliates, partners, members, employees or agents (collectively, the “Advisor
Group”) shall be liable to the Company or its subsidiaries or any of their
affiliates for any loss, liability, damage or expense (including attorney’s
fees and expenses) (collectively, a “Loss”) arising out of or in
connection with the performance of services contemplated by this Agreement,
except to the extent any such Loss results from the gross negligence, willful
misconduct or bad faith of any member of the Advisor Group as determined in a
final, non-appealable order by a court of competent jurisdiction.  The Advisor makes no representations or
warranties, express or implied, in respect of the Services to be provided by
the Advisor Group.  Except as the
Advisor may otherwise agree in writing after the date hereof and Section 7
hereof: (i) each member of the Advisor Group shall have the right to, and shall
have no duty (contractual or otherwise) not to, directly or indirectly: (A)
engage in the same or similar business activities or lines of business as the
Company or its subsidiaries or any of their affiliates and (B) do business with
any client or customer of the Company or its subsidiaries or any of their
affiliates; (ii) no member of the Advisor Group shall be liable to the Company
or its subsidiaries or affiliates for breach of any duty (contractual or
otherwise) by reason of any such activities or of such person’s participation
therein; and (iii) in the event that any member of the Advisor Group acquires
knowledge of a potential transaction or matter (but only to the extent the
Advisor acquires such knowledge outside his capacity as Advisor under this
Agreement) that may be a corporate opportunity for both the Company or any of
its subsidiaries or any of their affiliates, on the one hand, and the Advisor,
on the other hand, or any other person, no member of the Advisor Group shall
have any duty (contractual or otherwise) to communicate or present such
corporate opportunity to the Company or its subsidiaries or any of their
affiliates and, notwithstanding any provision of this Agreement to the
contrary, shall not be liable to the Company, its subsidiaries or any of their


 


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affiliates for
breach of any duty (contractual or otherwise) by reasons of the fact that any
member of the Advisor Group directly or indirectly pursues or acquires such
opportunity for itself, directs such opportunity to another person, or does not
present such opportunity to the Company, its subsidiaries or any of their
affiliates.  In no event will any of the
parties hereto be liable to any other party hereto for any indirect, special,
incidental or consequential damages, including lost profits or savings, whether
or not such damages are foreseeable, or in respect of any liabilities relating
to any third party claims (whether based in contract, tort or otherwise) other
than for the Claims (as defined in Section 6 below) relating to the
Services which may be provided by the Advisor hereunder.


 


6.             Indemnity.  The Company and its subsidiaries shall
defend, indemnify and hold harmless each member of the Advisor Group from and
against any and all Losses (including, without limitation, attorneys’ fees)
arising from any claim by any person with respect to, or in any way related to,
this Agreement (collectively, “Claims”) resulting from any act or
omission of any member of the Advisor Group, except to the extent such Claims
are the result of gross negligence, bad faith or willful misconduct by any
member of the Advisor Group as determined in a final, non-appealable order by a
court of competent jurisdiction.  The
Company and its subsidiaries shall defend at its own cost and expense any and
all suits or actions (just or unjust) which may be brought against the Company
or its subsidiaries and any member of the Advisor Group or in which any member
of the Advisor Group may be impleaded with others upon any Claims, or upon any
matter, directly or indirectly, related to or arising out of this Agreement or
the performance hereof by the Advisor Group, except to the extent such damage
shall be proven to be the direct result of gross negligence, bad faith or
willful misconduct by any member of the Advisor Group as determined in a final,
non-appealable order by a court of competent jurisdiction, to which extent the
Advisor shall reimburse the Company for the costs of defense and other costs
incurred by the Company associated therewith. 
The Company shall be liable for reasonable fees and expenses of no more
than one counsel (in addition to local counsel) in connection with the defense
of indemnifiable damages hereunder, except that the Company shall be liable for
the fees and expenses of additional separate counsel to the extent the member
of the Advisor Group concludes reasonably, based upon advice of counsel, that
(a) a conflict of interest exists between the member of the Advisor Group and
the Company or another member of the Advisor Group or (b) the named parties to
such action include both the Company and the member of the Advisor Group and
there may be one or more legal defenses available to such member of the Advisor
Group which are not available to the Company, or available to the Company, but
the assertion of which would be adverse to the interests of the Company.


 


7.             Confidentiality.  All material non-public information
concerning the Company which is given to the Advisor in its capacity as
such,  or to its directors, officers,
employees, agents, advisors (including, without limitation, attorneys,
accountants, consultants, bankers and financial advisors) or other person
associated with or acting on behalf of any such person in such person’s
capacity as such (collectively, “Representatives”), by the Company or
its Representatives from time to time will be used solely in the course of the
performance of the Advisor’s services hereunder or, in the case of any of such
person who is also an officer and/or director of the Company, in such person’s
capacity as an officer and/or director of the Company.  Except as contemplated by this Agreement or
as otherwise required by applicable law or judicial, regulatory or securities
exchange process, the Advisor will not disclose any material non-public
information so provided to it to a third party without the Company’s consent,
which shall not be unreasonably withheld or delayed.


 


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8.             Severability.  Should any provision of this Agreement be or
become invalid in whole or in part or should this Agreement or any provision
thereof be or become incomplete, this shall not affect the validity of the
remaining provisions hereof. In lieu of the invalid provision or in order to
cure any incompleteness, a provision shall apply which, to the extent legally
permissible, comes as close as possible to what the parties had intended or
would have agreed upon, if they had been aware of the invalidity or
incompleteness.


 


9.             Notices.  All notices hereunder shall be in writing
and shall be delivered personally or mailed by first class mail, postage
prepaid, addressed to the parties as follows:


 


To the Company:


 


Samsonite Corporation


11200 East 45th Street


Denver, Colorado 80239


Facsimile: (303) 373-6606


Attn: General Counsel


 


To the Advisor:


1448972 Ontario Limited,


trustee of OTPPB 2004 Trust


c/o Ontario Teachers’ Pension Plan Board


5650 Yonge Street


Toronto, Ontario M2M 4H5


Canada


Attn:  Michael Padfield


 


10.           Assignment.  No party may assign any obligations
hereunder to any other party without the prior written consent of each other
party (which consent shall not be unreasonably withheld); provided that the
Advisor may, without consent of the Company, assign its rights and obligations
under this Agreement to any of its affiliates, including without limitation affiliated
investment funds.  The assignor shall
remain liable for the performance of any assignee.


 


11.           Successors.  This Agreement and all the obligations and
benefits hereunder shall inure to the successors and assigns of the parties.


 


12.           Counterparts.  This Agreement may be executed and delivered
by each party hereto in separate counterparts, each of which when so executed
and delivered shall be deemed an original and all of which taken together shall
constitute but one and the same agreement.


 


13.           Entire Agreement; Modification;
Governing Law, Dispute Resolution. 
The terms and conditions hereof constitute the entire agreement between
the parties hereto with respect to the subject matter of this Agreement and
supersede all previous communications, either oral or written, representations
or warranties of any kind whatsoever, except as expressly set forth herein.


 


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The parties to
this Agreement may amend its terms and conditions, however, no modifications of
this Agreement nor waiver of the terms or conditions thereof shall be binding
upon either party unless approved in writing by an authorized representative of
such party.  All issues concerning this
agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any choice of law or conflict of
law provision or rule (whether of New York or any other jurisdiction) that
would cause the application of the law of any jurisdiction other than the State
of New York.


 


14.           Joint and Several Liability.  Each obligation described herein of the
Company shall be a joint and several obligation of the Company and its
subsidiaries.  If requested by the
Advisor, then the Company shall cause any of its respective subsidiaries to
sign a counterpart signature page to this Agreement to evidence such joint and
several liability.


 


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IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.


 


 


	
   

  	
  SAMSONITE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  1448972
  ONTARIO LIMITED,

  TRUSTEE OF OTPPB 2004 TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: