Document:

Exhibit 10.16

 

SEK 312,500,000

 

REVOLVING CREDIT AND TERM LOAN FACILITY

 

AGREEMENT

 

between

 

ELFA INTERNATIONAL AB

as

Borrower

 

and

 

TJUSTBYGDENS SPARBANK AB

as

Bank

 

dated April 27th, 2009

 

 

	
TABLE OF CONTENTS
    
	
PREAMBLE
    
	
1.
    	
 
    	
DEFINITIONS
    	
 
    	
3
    
	
2.
    	
 
    	
THE FACILITY
    	
 
    	
6
    
	
3.
    	
 
    	
CONDITIONS FOR UTILISATION, etc.
    	
 
    	
7
    
	
4.
    	
 
    	
UTILISATION REQUESTS, etc.
    	
 
    	
8
    
	
5.
    	
 
    	
MARKET DISRUPTION
    	
 
    	
9
    
	
6.
    	
 
    	
PREPAYMENT AND CANCELLATION
    	
 
    	
9
    
	
7.
    	
 
    	
INTEREST
    	
 
    	
10
    
	
8.
    	
 
    	
THE BORROWER’S PAYMENT OBLIGATIONS
    	
 
    	
10
    
	
9.
    	
 
    	
COSTS
    	
 
    	
11
    
	
10.
    	
 
    	
FACILITY FEE AND CREDIT FEE
    	
 
    	
11
    
	
11.
    	
 
    	
REPRESENTATIONS
    	
 
    	
11
    
	
12.
    	
 
    	
UNDERTAKINGS
    	
 
    	
13
    
	
13.
    	
 
    	
EVENTS OF DEFAULT
    	
 
    	
15
    
	
14.
    	
 
    	
CHANGE IN CIRCUMSTANCES AND INCREASED COSTS, etc.
    	
 
    	
16
    
	
15.
    	
 
    	
SET OFF
    	
 
    	
17
    
	
16.
    	
 
    	
ASSIGNMENT
    	
 
    	
17
    
	
17.
    	
 
    	
NOTICES, etc.
    	
 
    	
18
    
	
18.
    	
 
    	
LIMITATION OF THE BANK’S LIABILITY
    	
 
    	
19
    
	
19.
    	
 
    	
AMENDMENTS
    	
 
    	
19
    
	
20.
    	
 
    	
TERM
    	
 
    	
19
    
	
21.
    	
 
    	
GOVERNING LAW AND JURISDICTION
    	
 
    	
19
    
	
Appendix 1
    	
21
    
	
Appendix 2
    	
22
    

 

2

 

PREAMBLE

 

Tjustbygdens Sparbank AB, org no. 516401-0224, hereinafter referred to as the “Bank”, and Elfa International AB, org no. 556516-2012, hereinafter referred to as the “Borrower”, have this day due to the executed down-stream merger between the Borrower (surviving entity) and Elfa Group AB, org no. 556568-8875, agreed to replace the Loan Agreement dated August 13th 2007. Thus the Bank and the Borrower have this day entered into the following

 

REVOLVING CREDIT AND TERM LOAN FACILITY AGREEMENT

 

1.                                      DEFINITIONS

 

In this Agreement, the following terms and expressions shall have the meaning set forth below:

 

	
“Banking   Day”
    	
 
    	
means   a day (other than a Saturday, Sunday or holiday) on which banks are open for   general business in Stockholm for the kind of transactions contemplated by   this Agreement;
    
	
 
    	
 
    	
 
    
	
“Default”
    	
 
    	
means   an Event of Default or any event or circumstance specified in Clause 13 which   would (with the expiry of a grace period, the giving of notice, the making of   any determination under this Agreement or any combination of any of the   foregoing) be an Event of Default; 
    
	
 
    	
 
    	
 
    
	
“Equity   Ratio”
    	
 
    	
means   the Shareholders’ Equity divided by the Group’s total assets provided that   generally accepted accounting principles are used. For the purpose of the   calculation any write-down (not amortization) of goodwill will be added back   to the balance of both equity and goodwill; 
    
	
 
    	
 
    	
 
    
	
“EBITDA”
    	
 
    	
means   operating profit before depreciation provided that generally accepted   accounting principles are used. For the purpose of the calculation any   deduction for non-recurring and unusual charges and expenses will be added   back; 
    
	
 
    	
 
    	
 
    
	
“Event   of Default”
    	
 
    	
means   event or circumstance specified as such in Clause 13; 
    
	
 
    	
 
    	
 
    
	
“Facility”
    	
 
    	
means   the revolving credit and term loan facility provided by the Bank pursuant to   this Agreement divided into 
    

 

3

 

	
 
    	
 
    	
Facility   A and Facility B;
    
	
 
    	
 
    	
 
    
	
“Facility   A”
    	
 
    	
means   the term loan facility in the aggregate amount of SEK 137,500,000 (originally   SEK 175,000,000 in loan agreement dated August 13th 2007) made available under this Agreement as   described in Clause 2; 
    
	
 
    	
 
    	
 
    
	
“Facility   A Loan”
    	
 
    	
means   the loan in the aggregate amount of SEK 137,500,000 made or to be made under   Facility A or the principal amount outstanding for the time being of that loan;   
    
	
 
    	
 
    	
 
    
	
“Facility   Amount”
    	
 
    	
means   SEK 312,500,000 (originally SEK 350,000,000 in loan agreement dated   August 13th 2007) or such lower amount as may follow by   the provisions of this Agreement; 
    
	
 
    	
 
    	
 
    
	
“Facility   B”
    	
 
    	
means   the revolving credit facility in the aggregate amount of SEK 175,000,000 made   available under this Agreement as described in Clause 2; 
    
	
 
    	
 
    	
 
    
	
“Facility   B Loan”
    	
 
    	
means   each separate amount of principal disbursed to the Borrower under this   Agreement as a Facility B Loan or the principal amount outstanding for the   time being of each such loan; 
    
	
 
    	
 
    	
 
    
	
“Facility   Period”
    	
 
    	
means   unless otherwise prescribed by the provisions of this agreement, the period   commencing with the entry into force of this Agreement pursuant to Clause 3.1   up to and including August 30th 2014; 
    
	
 
    	
 
    	
 
    
	
“Loan”
    	
 
    	
means   each of the Facility A Loan and any Facility B Loan; 
    
	
 
    	
 
    	
 
    
	
“Financial   Indebtedness”
    	
 
    	
means   indebtedness relating to: 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a) loans that have been raised or credit   facilities that have been utilised; 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b) issued convertible debentures,   debentures, bonds, notes or similar instruments; 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(c) rental, purchase, or leasing agreements   which, according to generally accepted accounting principles, are to be   capitalized and regarded as financial leasing; 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(d) assigned claims, unless such assignments   have taken place without the assignee being entitled to make any claims   against the assignor; 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(e) derivatives transactions, however, when   the amount of such indebtedness shall be calculated, only the 
    

 

4

 

	
 
    	
 
    	
current   market value shall be taken into account; 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(f) counter-guarantees or other payment   undertakings relating to guarantees, letters of credit and other similar   instruments or documents which have been issued or accepted by a bank or   other financial institution; 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(g) other legal transactions, including   futures contracts which, from a commercial perspective, are to be equated   with indebtedness; and 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(h) obligations pursuant to guarantees or   indemnity letters obligations which have been issued as security for any indebtedness   as referred to in sub clause (a) - (g) above; 
    
	
 
    	
 
    	
 
    
	
“Group”
    	
 
    	
means   the Borrower and any of its Subsidiaries from time to time; 
    
	
 
    	
 
    	
 
    
	
“Interest   Determination Day”
    	
 
    	
means   the day which occurs two Banking Days prior to the commencement of any   Interest Period or Loan Period, as the case may be; 
    
	
 
    	
 
    	
 
    
	
“Interest   Period”
    	
 
    	
means   as regards Facility B Loan seven (7) days; or such other period as   agreed between the Bank and the Borrower; 
    
	
 
    	
 
    	
 
    
	
“Loan   Period”
    	
 
    	
means   as regards each Facility A Loan, the period of 3, 6, or 12 months (or such   other period as agreed between the Bank and the Borrower) commencing on the   Utilisation Date, provided however that under no circumstances shall the Loan   Period for a Facility A Loan expire after the Termination Date for Facility   A; 
    
	
 
    	
 
    	
 
    
	
“Margin”
    	
 
    	
means   1,775 percent units; 
    
	
 
    	
 
    	
 
    
	
“Market   Disruption Event”
    	
 
    	
means   that at or about 11.00 a.m. on an Interest Determination Date for the   relevant Interest Period or Loan Period, as the case may be, the Bank’s cost   of obtaining matching deposits in the market would be in excess of STIBOR and   the reason for this is not the Bank’s own credit standing; 
    
	
 
    	
 
    	
 
    
	
“Net   Debt”
    	
 
    	
means   the sum of interest-bearing debts less cash in hand;
    
	
 
    	
 
    	
 
    
	
“Repayment   Date”
    	
 
    	
means   in respect of the Facility A Loan, the Termination Date for the Facility A   Loan or any other date that may 
    

 

5

 

	
 
    	
 
    	
follow   by the provisions of this Agreement and in respect of each Facility B Loan,   the last Banking Day in each Interest Period or any other date that may   follow by the provisions of this Agreement; 
    
	
 
    	
 
    	
 
    
	
“Shareholders   Equity”
    	
 
    	
means   the Group’s shareholders’ equity (including minority interest according to   Appendix 2 (2)), determined in accordance with generally accepted accounting   principles; 
    
	
 
    	
 
    	
 
    
	
“STIBOR”
    	
 
    	
means   the interest rate which is published on the “SIOR” page on the Reuters   information system (or through such other information system or on such other   page as replaces the aforesaid system or page) and which constitutes the   arithmetic mean of the interest rates which, at approximately 11.00 a.m.   on the Interest Determination Date in question, are published by banks on the   interbank market in Stockholm for a period equivalent to the Interest Period   in question; 
    
	
 
    	
 
    	
 
    
	
“Subsidiary”
    	
 
    	
means   a legal entity which is affiliated with a company as a subsidiary (Sw.   dotterbolag) as described in Chapter 1, 11 § of the Swedish Companies Act   (2005:551) (or in such other provision as may replace this provision); 
    
	
 
    	
 
    	
 
    
	
“Termination   Date”
    	
 
    	
means   
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 (a) in   respect of Facility A August 30th 2014; and 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 (b) in   respect of Facility B August 30th 2009. If the Borrower complies with the   agreed covenants and other general conditions the Facility B will automatically   be prolonged by one year on an annual basis; 
    
	
 
    	
 
    	
 
    
	
“Utilisation   Date”
    	
 
    	
means,   as regards each Loan, the Banking Day agreed with the Borrower on which the   Loan shall be disbursed in pursuant to Clause 4.2; 
    
	
 
    	
 
    	
 
    
	
“Utilisation   Request”
    	
 
    	
means   a notice substantially in the form set out in Appendix 1. 
    

 

2.                                      THE FACILITY

 

2.1                               Subject to the terms and conditions of this Agreement the Bank makes available to the Borrower a term loan in the aggregate amount of Facility A to be utilised by the drawing of one loan and a revolving credit facility in an aggregate amount of Facility B to be utilised by the drawing of loans.

 

6

 

Outstanding debt to the Bank assigned to the Loan Agreement dated August 13th 2007 shall be considered outstanding in this agreement.

 

2.2                               The Borrower shall apply all amounts borrowed by it under the Facility towards refinancing existing debt and financing working capital, machinery, equipment, real estate and acquisitions by the Borrower and its Subsidiaries. The Bank is not bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

3.                                      CONDITIONS FOR UTILISATION, etc.

 

3.1                               This Agreement shall enter into force upon execution by the parties. However, the Borrower shall not be entitled to deliver a Utilisation Request prior to the Bank having received the following documents:

 

(a)                                 a certified copy of the current certificate of registration;

 

(b)                                 a copy of the constitutional documents of the Borrower;

 

(c)                                  a copy of the board resolution confirming that the Borrower shall enter into this Agreement; and

 

(d)                                 Pledge agreements concerning agreed securities in form and substance satisfactory to the Bank

 

(e)                                  a letter of approval from The Container Store Inc., Dallas, USA, concerning this Agreement and concerning necessary changes in the Group’s pledges and other securities due to the executed merger between Elfa Group AB and Elfa International AB.

 

In the event of any change to the information set forth in the document specified under (a) above regarding the authorising of a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with this Agreement, the Borrower hereby undertakes to forthwith provide the Bank with a new document evidencing such changes. However, the Bank shall be entitled to rely upon the information contained in the original document until such time as the Bank has received the new document.

 

3.2                               The Bank’s disbursement of any Loan shall be conditional upon:

 

(a)                                 no Default has occurred and no circumstances are prevailing which constitute a right of termination for the Bank in accordance with Clauses 6.4, 13 or 14;

 

(b)                                 the aggregated amount of all Loans, following disbursement of the requested Loan, do not exceed neither the Facility Amount nor, following disbursement of a Facility A Loan, the aggregate amount of all

 

7

 

Facility A Loans does not exceed Facility A amount and nor, following disbursement of a Facility B Loan, the aggregate amount of all Facility B Loans does not exceed Facility B amount;

 

(c)                                  the terms and conditions set forth in Clause 4 having been met; and

 

(d)                                 a total of not more than six Loans will be outstanding under Facility B at the same time.

 

4.                                      UTILISATION REQUESTS, etc.

 

4.1                               The Borrower may utilise the Facility by sending Utilisation Requests by fax to the Bank marked to the attention of its department Företagsavdelningen, fax no. +46 490 815120 not later than 10.00 a.m. three Banking Days prior to the Utilisation Date.

 

4.2                               Each Utilisation Request shall show:

 

(a)                                 as regards a Loan to be disbursed under Facility A, the amount of the Loan which shall be a minimum amount of SEK 6,250,000 or integral multiples thereof;

 

(b)                                 the proposed Utilisation Date;

 

(c)                                  as regards the Facility B Loan, the proposed Interest Period and as regards a Facility A Loan, the proposed Loan Period; and

 

(d)                                 the account into which the Loan shall be disbursed.

 

Each Utilisation Request must be signed by the Borrower. The Borrower is responsible for ensuring that the officers of the Borrower who submit Utilisation Requests comply with any limitations on their authority to represent the Borrower.

 

4.3                               Each Utilisation Request shall be confirmed by the Bank sending a confirmation letter setting forth the specific terms and conditions by fax to the Borrower as soon as possible and not later than one Banking Day prior to the Utilisation Date. The Loan shall be governed by this Agreement and the specific terms and conditions contained in the confirmation without reference to this Agreement being required in the confirmation.

 

4.4                               In the event the last day of an Interest Period or a Loan Period falls on a day which is not a Banking Day, the Interest Period or Loan Period, as the case may be, shall be extended to the subsequent Banking Day, provided that such subsequent Banking Day does not fall in a new calendar month, in which case the last day of Interest Period or the Loan Period, as the case may be, shall fall instead on the immediately preceding Banking Day.

 

8

 

4.5                               Each Utilisation Request is irrevocable.

 

5.                                      MARKET DISRUPTION

 

If a Market Disruption Event occurs for any Interest Period or Loan Period, as the case may be, then the rate of interest for the Interest Period or Loan Period shall be the rate per annum which is the sum of:

 

(a)                                 the Margin; and

 

(b)                                 the rate expressed as a percentage rate per annum to be the cost to the Bank of funding the Loan from whatever source it may reasonably select.

 

6.                                      PREPAYMENT AND CANCELLATION

 

6.1                               The Borrower shall be entitled to prepay a Loan or part thereof, but if in part, by a minimum amount of SEK 6,250,000, prior to the Repayment Date if it gives the Bank not less than fifteen Banking Days prior written notice, provided that the Borrower indemnifies the Bank for any loss (for the avoidance of doubt save for the Margin) during the Loan Period resulting from any contracts where the interest rate has been fixed for that time period. After the Bank has received notice of prepayment of the Loan pursuant to the aforesaid, the Borrower shall be obliged to effect prepayment according to such notice.

 

6.2                               Any amount prepaid under Facility A may not be reborrowed.

 

6.3                               At any time during the Facility Period, the Borrower shall be entitled to cancel, in whole or in part, the undrawn part of the Facility B Amount in minimum amounts of SEK 10,000,000 or if less the unutilised amount of the Facility B Amount, subject to at least 10 days prior written notice to the Bank.

 

6.4                               If The Container Store Inc, Dallas, USA ceases to control the Borrower or any person or group of persons acting in concert gains control of the Borrower;

 

(a)                                 the Borrower shall promptly notify the Bank upon becoming aware of that event; and

 

(b)                                 the Bank shall be entitled to give notice of cancellation of its obligations under this Agreement and demand repayment of all Loans provided under this Agreement with accrued interest and other claims against the Borrower resulting from this Agreement, on the date which the Bank determines.

 

9

 

7.                                      INTEREST

 

7.1                               The rate of interest on each Loan for each Interest Period and for each Loan Period, as the case may be, is the percentage rate per annum which is the aggregate of the relevant STIBOR and the Margin.

 

7.2                               Interest will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days. Interest on the Facility B Loan will be calculated for the period from and including the first day in each Interest Period to the last day in such period. The first Interest Period shall start on the Utilisation Date and all other Interest Periods on the last day of its preceding Interest Period. Each Loan Period for a Facility A Loan shall start on the Utilisation Date and end on the Repayment Date.

 

7.3                               Accrued interest on the Facility B Loan shall be paid on the last day of each Interest Period (and, if the Interest Period is longer than six months, on the dates falling at six-monthly intervals after the first day of the Interest Period) and accrued interest on a Facility A Loan shall be paid on each Repayment Date (and if the Loan Period is longer than six months, on the each Banking Day falling at six monthly intervals after the first day of the Loan Period).

 

8.                                      THE BORROWER’S PAYMENT OBLIGATIONS

 

8.1                               The Borrower undertakes to repay the Facility A Loan by 22 equal consecutive quarterly instalments commencing on May 30th 2009 and to pay accrued interest on each Loan in accordance with the provisions of Clause 7.3. Payments shall be made into an account designated by the Bank in such time that the amount is freely available to the Bank not later than 11.00 a.m. on the due date for payment.

 

8.2                               If the Borrower fails to repay a Loan or interest thereon default interest shall accrue on the overdue amount from the due date up to the date of actual payment in full. Default interest shall be determined by the Bank and calculated as the higher of: (a) the interest rate which applied to the Loan in question during the Interest Period or Loan Period, as the case may be; or (b) the total of the Margin and the interest rate at which the Bank is able to refinance itself for the period(s) which the Bank determines, in both cases, with addition of two (2) percentage units.

 

8.3                               In the event of delay in payment of any due amounts pursuant to this Agreement other than those referred to in Clause 8.2 above, the Borrower shall pay default interest on the due amount from and including the due date for payment until full payment is made calculated on the total of the Margin and the interest rate at which the Bank may refinance itself on for period(s) which the Bank determines with addition of two (2) percentage units.

 

8.4                               Interest calculated pursuant to Clauses 8.2 and 8.3 shall be compounded after each refinancing period determined by the Bank.

 

10

 

8.5                               Any payment which is due to be made on a day that is not a Banking Day shall be made on the next Banking Day in the same calendar month (if there is one) or the preceding Banking Day (if there is not).

 

9.                                      COSTS

 

The Borrower shall indemnify the Bank on demand for any costs and expenses, including internal and external legal fees, in order to prove and enforce the Bank’s claims against the Borrower or any other person liable for payment thereof.

 

10.                               FACILITY FEE AND CREDIT FEE

 

The Borrower shall pay to the Bank;

 

(a)                                 an arrangement fee amounting to SEK 1,000,000. The fee is to be paid on the date of signing this Agreement.

 

(b)                                 a credit fee of 0,50% on unutilized credit at the end of each quarter related to Facility B Loan, starting January 1st 2009, billed in arrears for each quarter.

 

11.                               REPRESENTATIONS

 

11.1                        The Borrower represents and warrants to the Bank that as of the date of this Agreement:

 

(a)                                 It is a company, duly incorporated and validly existing under the law of its jurisdiction of incorporation;

 

(b)                                 it has full power and authority (corporate and other) to own its properties and other assets, to carry on its business as it is being conducted and to execute and deliver, and to perform all of its obligations under this Agreement;

 

(c)                                  it has the power to enter into, perform and deliver and has taken all necessary corporate action to authorise the execution, delivery and performance of this Agreement and the transactions contemplated by it;

 

(d)                                 the obligations expressed to be assumed by it in this Agreement are valid and legally binding obligations;

 

(e)                                  the entry into, execution, delivery and performance by it of, and the transactions contemplated by, this Agreement do not violate and will not conflict with in any respect any provisions of (a) any law or

 

11

 

regulation or any order or decree of any authority, agency or court binding on it or (b) any mortgage, contract, agreement or other undertaking or instrument to which it is a party or which is binding on it or any of its assets or (c) its constitutional documents;

 

(f)                                   no Event of Default or Potential Event of Default, (a) has occurred which is continuing or (b) might reasonably be expected to result from the delivery of an Utilisation Request;

 

(g)                                  all authorisations required in connection with the performance and validity of this Agreement have been obtained and are in full force and effect;

 

(h)                                 the utilisation of the Facility will not cause any borrowing, guarantee or other financial limits binding on it to be exceeded;

 

(i)                                     its payment obligations under this Agreement rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally;

 

(j)                                    no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a material adverse effect have on the performance of its obligations under this Agreement and the transactions contemplated thereby have (to the best of its knowledge and belief) been started or threatened against it.

 

(k)                                 that it shall make all payments to be made by it without any tax deduction, unless a tax deduction is required by law and promptly upon becoming aware that it must make a tax deduction (i) notify the Bank, and (ii) increase the amount due from it to an amount which (after making any tax deduction) leaves an amount equal to the payment which would have been due if no tax deduction had been required;

 

(l)                                     under the law of its jurisdiction of incorporation it is not necessary that this Agreement be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to this Agreement or the transactions contemplated by this Agreement other than stamp duty in relation to issuance of new mortgage certificates (if any) as may be provided for any related security agreements ; and

 

(m)                             no encumbrance exists over all or any of the present or future revenues or assets of the Borrower except as permitted by Clause 12.2.

 

11.2                        The representations made in Clause 11.1 shall be deemed to be made and repeated by the Borrower on each Utilisation Date and on the first date of each Interest Period and each Loan Period, as the case may be, by reference

 

12

 

to the facts and circumstances then subsisting.

 

12.                               UNDERTAKINGS

 

12.1                        The Borrower undertakes:

 

(a)                                 to immediately inform the Bank of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence;

 

(b)                                 to immediately inform the Bank of major future changes to the Group’s business and operations as well as future acquisition or sale of any property which is of material significance;

 

(c)                                  to immediately inform the Bank should events of material significance for the Group’s development occur or should material changes occur to the Group’s financial position, profit trend, liquidity or financing situation provided that such events or changes might have a material effect on the Borrower’s ability to perform its obligations under this Agreement;

 

(d)                                 to supply to the Bank as soon as the same become available, but in any event within 150 days after the end of each of its financial years, its audited consolidated financial statements for that financial year;

 

(e)                                  to supply to the Bank as soon as the same become available, but in any event within 60 days after the end of the first half of each of its financial years, its unaudited consolidated financial statements for that financial half year;

 

(f)                                   to otherwise on demand provide the Bank with such information concerning the Group which the Bank reasonably requests and which, in the Bank’s opinion, may be of significance for the Borrower’s or the Bank’s obligations pursuant to this Agreement; however, the Borrower shall only be obliged to provide the Bank with information to the extent that the provision of such information does not violate any contract which the Borrower or any Subsidiary has entered into with any securities exchange or authorised marketplace on which shares in, or securities issued by, the Borrower or any Subsidiary are listed;

 

(g)                                  to insure its assets and business to the extent and in a manner which is customary for companies of the same or similar operations as the Borrower;

 

(h)                                 to procure that its Subsidiaries insure their assets and their business to the extent specified in sub clause (g) above;

 

13

 

(i)                                     not to materially change its business operations compared with the manner in which such are presently conducted;

 

(j)                                    not (without the prior written consent of the Bank, which consent should not be unreasonably withheld) to merge with any other company;

 

(k)                                 to inform the Bank of any changes and/or plans of changes of the financing of it’s parent company The Container Store Inc;

 

(l)                                     not to pledge or create any other security interest over its assets in any cases other than those specified in Clause 12.2 below without the Bank’s prior written consent (the aforesaid shall not include any retention of title or lien) or assume any guarantee commitment in respect of any third party’s payment obligation;

 

(m)                             to ensure that its Subsidiaries comply with the provisions of (I) above whereupon the Subsidiary in question shall comply with the obligations applicable to the Borrower;

 

(n)                                 to ensure that the claims of the Bank against it under this Agreement at all times rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except for obligations mandatorily preferred by law.

 

(o)                                 not, without having informed the Bank, dispose of operations or assets except (i) made in the ordinary course of business on an arm’s length basis, (ii) in exchange for comparable assets, (iii) of obsolete plant or equipment for cash, or (iv) with the prior written consent of the Bank (which consent should not be unreasonably withheld) from a Group company to another Group company;

 

(p)                                 to quarterly, in writing, within 30 days after end of each quarter, starting May 31st 2009, report to the Bank according to provisions (q) and (r) below and to any current and future covenant;

 

(q)                                 to ensure that the Borrower’s consolidated Equity Ratio always exceeds 35% at the end of each quarter of a year calculated according to Appendix 2; and

 

(r)                                    to ensure that the consolidated ratio of the Borrower’s Net Debt to EBITDA never exceeds 4,0 at the end of each quarter of a year calculated according to Appendix 2 (EBITDA shall be calculated on rolling 12 months, i.e. the latest 12 months);

 

(s)                                     until April 30th, 2010, (1) to not pay any dividends to its parent, The Container Store Inc., (2) to not make any repayments of principal on intercompany debt owed to its parent, The Container Store, Inc. and (3) to not decrease the price of goods sold to its parent, The

 

14

 

Container Store, inc.;

 

(t)                                    that after April 30th, 2010, any dividends paid to its parent, The Container Store, Inc., will be based on the Borrower’s future net income and on historical intercompany practices as between the Borrower and its parent, The Container Store, Inc.

 

12.2                        However, the Borrower’s obligations pursuant to Clauses 12.1 (I) and (m) above shall not include the following pledges or security:

 

(a)         pledges which rise in the Borrower’s or its Subsidiaries operations by law;

 

(b)         pledges due to litigation or proceedings involving the Borrower or any Subsidiary before courts of law or arbitral tribunals or due to matters involving the Borrower which are dealt with by courts of law or public authorities;

 

(c)          pledges and other security related to the Borrower’s or its Subsidiaries issuance of covered bonds;

 

(d)         pledges and other security in the ordinary course if its business.; and

 

(e)          pledges or other security securing indebtedness of SEK 10,000,000 in aggregate.

 

12.3                        The undertakings in Clause 12.1 remain in force from the date of this Agreement for so long as any amount is outstanding hereunder.

 

13.                               EVENTS OF DEFAULT

 

13.1                        The Bank shall be entitled to give notice of cancellation of its obligations under this Agreement and demand repayment of all Loans provided under this Agreement with accrued interest and other claims against the Borrower resulting from this Agreement, on the date which the Bank determines, where any of the following circumstances occur:

 

(a)                                 the Borrower does not pay on the due date any amount payable pursuant to this Agreement unless its failure to pay is caused by administrative or technical error and payment is made within five (5) Banking Days of the due date;

 

(b)                                 the Borrower does not comply with any provision of this Agreement (other than that referred to in sub clause (a) above and such failure is not remedied within the earlier of (i) ten (10) days after notice from the Bank and (ii) ten (10) days after the Borrower having become aware of

 

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such failure;

 

(c)                                  the Borrower or any Subsidiary fails to duly perform, or comply with, any other payment obligations towards the Bank unless its failure to pay is caused by administrative or technical error and payment is made within five (5) Banking Days of the due date;

 

(d)                                 the Borrower or any Subsidiary fails to make payment on the due date in relation to Financial Indebtedness having an aggregate principal amount more than SEK 5,000,000 other than in relation to the Bank, any of the Borrower’s or any Subsidiaries’ Financial Indebtedness having an aggregate principal amount more than SEK 5,000,000 is declared to be due and payable prior to its specified maturity or any other ground for such declaration has occurred or where any creditor of the Borrower or any Subsidiary cancels a loan commitment or other binding commitment regarding the provision of such Financial Indebtedness;

 

(e)                                  the Borrower or any Subsidiary has been placed into insolvent liquidation, commenced negotiations for a composition, applied for a company reorganisation order (or has commenced similar proceedings) or has suspended its payments or been placed into liquidation;

 

(f)                                   any attachment, sequestration, distress or execution affects any asset or assets of a member of the Group; or

 

(g)                                  any other circumstances exist which give the Bank reasonable grounds to assume that the Borrower’s conditions for, and/or possibilities to, make payment or to perform other material obligations towards the Bank pursuant to this Agreement have deteriorated significantly.

 

13.2                       Where repayment is demanded due to cancellation by the Bank pursuant to the aforesaid, the Borrower shall be obliged to indemnify the Bank, on demand, for the reasonable costs and losses which may thereby be incurred by the Bank.

 

14.                               CHANGE IN CIRCUMSTANCES AND INCREASED COSTS, etc.

 

14.1                        Unless otherwise set out in the second paragraph of this sub clause 14.1, in the event Swedish or foreign legislation, the actions of Swedish or foreign public authorities, or circumstances which affect the Swedish or a foreign credit or currency market directly or indirectly make it impossible or significantly more expensive for the Bank to provide or maintain any Loan or otherwise fulfil its obligations pursuant to this Agreement, the Bank shall be entitled to terminate this Agreement with immediate effect and demand repayment of any Loan on a date determined by the Bank. The Borrower shall thereupon on demand indemnify the Bank for increased costs up to the date of

 

16

 

repayment of the Loan in question and for such costs which the Bank incurs due to repayment being made other than on the Repayment Date. The Bank hereby undertakes to inform the Borrower without unreasonable delay of such events as referred to in this Clause 14.1.

 

In the event any of the changed circumstances as referred to in the foregoing paragraph only give rise to an increased cost for the Bank, the Bank shall on request by the Borrower maintain the Loan(s), provided the Borrower indemnifies the Bank for any costs already incurred together with any future costs that the Bank incurs in connection therewith.

 

14.2                        The Borrower shall on demand by the Bank, pay to the Bank the amount of any increased costs incurred by the Bank as a result of the introduction of or any change in any law or regulation (including for the avoidance of doubt any amended rules regarding capital adequacy (such as for example any amended rules due to the implementation of Basel II) or obligations regarding provisions for losses) made after the date of this Agreement which are incurred or suffered by the Bank to the extent that it is attributable to the Bank funding or performing its obligations under this Agreement.

 

14.3                        In the event the Borrower incurs additional expenses pursuant to any of the provisions of this Clause 14, the Borrower shall be entitled to terminate this Agreement immediately provided that all Loans are repaid at the same time together with accrued interest thereon and other documented costs incurred by the Bank in connection with such repayment.

 

15.                               SET OFF

 

15.1                        All payments to be made by the Borrower hereunder shall be calculated and be made without any set-off or counterclaim.

 

15.2                        The Borrower authorises the Bank to apply any credit balance to which the Borrower is entitled on any account of the Borrower with the Bank in satisfaction of any sum due and payable from the Borrower to the Bank under this Agreement whether matured or unmatured. For this purpose, the Bank is authorised to purchase with the moneys standing to the credit of any such account such other currencies as may be necessary to effect such application.

 

15.3                        The Bank shall not be obliged to exercise any right given to it by Clause 15.2.

 

16.                               ASSIGNMENT

 

16.1                       The Borrower shall not be entitled to assign its rights or obligations under this Agreement in whole or in part, without the Bank’s prior written consent.

 

16.2                       The Bank shall be entitled to assign its rights and obligations under this Agreement in whole or in part to another financial institution subject to the

 

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Borrower’s prior written consent, which consent shall not be unreasonably withheld. However, the Bank shall at all times be entitled to assign its rights and obligations under this Agreement without the Borrower’s consent to another company within the same group as the Bank and to other companies if an Event of Default is continuing. All costs which the Bank may incur due to such assignment shall be borne by the Bank. Prior to a contemplated assignment, the Bank shall notify the Borrower of its intentions without being required to name the prospective assignee and as soon as possible after the execution of the assignment agreement the Bank shall inform the Borrower of the name of the assignee.

 

17.                               NOTICES, etc.

 

17.1                        Any communication under, or in connection with, this Agreement, except for Utilisation Requests, shall be in writing and may be given in person, by post or fax to the contacts set out below.

 

The Borrower:

 

Elfa International AB

Attention: CEO or CFO

Postal address: 593 87 VÄSTERVIK

Fax number: + 46 490 846 25

 

The Bank:

 

Tjustbygdens Sparbank AB

Att: Företagsavdelningen

Visiting address: Kvarngatan 20, Västervik

Postal address: Box 322, 593 24 VÄSTERVIK

Fax number: +46 490 815120

 

The Borrower and the Bank shall notify each other of any changes of addresses or fax numbers.

 

17.2                        Except as provided in Clause 17.3 below, any communication in connection with this Agreement shall be deemed to be received as follows:

 

(a)                            if delivered in person, at the time of delivery;

 

(b)                            if delivered by post, three Banking Days after being deposited in the post, postage prepaid, in a correctly addressed envelope; and

 

(c)                             if by fax when received in legible form.

 

17.3                       A communication deemed to be received under the foregoing Clause 17.2 but received on a non-Banking Day or on a Banking Day after 16:00 am will only

 

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be deemed to be received on the next Banking Day at the recipient.

 

18.                               LIMITATION OF THE BANK’S LIABILITY

 

18.1                        The Bank shall not be held responsible for any loss or damage resulting from a Swedish legal enactment, the intervention of a Swedish public authority, an act of war, a strike, blockade, boycott, lockout or any other similar circumstance. The reservation in respect of strikes, blockades, boycotts and lockouts applies even if the Bank itself takes such measures or is the subject of such measures.

 

18.2                        Any loss or damage arising from any other cause shall not be indemnified by the Bank, where the Bank has observed normal care. The Bank cannot be held responsible for any indirect loss or damage.

 

18.3                        Where the Bank is prevented from effecting payments, or, taking other measures due to circumstances as indicated in the first paragraph, the measures in question may be postponed until the obstacle has been removed. Where a payment has been postponed, then the Bank shall, in case it has undertaken to pay interest, pay interest at the rate applicable at maturity.

 

18.4                        Where the Bank, due to circumstances as indicated in the first paragraph, is prevented from receiving payments, the Bank shall be entitled to interest for the period during which the obstacle remains, only under the terms and conditions in force at maturity.

 

19.                               AMENDMENTS

 

In order to be binding, any supplements and amendments to this Agreement must be made in writing.

 

20.                               TERM

 

This Agreement shall remain in force during the Facility Period. Notwithstanding the expiration of the Facility Period, the Borrower’s obligations pursuant to this Agreement shall remain in force until fully discharged.

 

21.                               GOVERNING LAW AND JURISDICTION

 

This Agreement shall be governed by Swedish Law. The District Court of Stockholm shall have jurisdiction as the court of first instance to settle any dispute arising out of or in connection with this Agreement.

 

This Agreement has been executed in two (2) originals of which each party has taken one.

 

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Västervik, April 27th 2009

 

	
TJUSTBYGDENS SPARBANK AB
    	
 
    	
ELFA INTERNATIONAL AB
    
	
 
    	
 
    	
 
    
	
/s/ Mats Hasselquist
    	
 
    	
/s/ Per Von Mentzer
    
	
Mats Hasselquist
    	
 
    	
Per Von Mentzer
    
	
 
    	
 
    	
 
    
	
/s/ Thomas Bjorkberger
    	
 
    	
/s/ Jorgen Nilsson
    
	
Thomas Bjorkberger
    	
 
    	
Jorgen Nilsson
    

 

20

 

CONFIRMATION

 

WHEREAS,

 

(a) Tjustbygdens Sparbank AB has transferred all their rights under a Revolving Credit and Term Loan Facility Agreement dated April 27th, 2009, with an original loan amount of SEK 312,500,000 and with ourselves as borrower, to Swedbank AB.

 

(b) we, the undersigned, has pledged certain assets (detailed in Annex 1) to Tjustbygdens Sparbank AB as security for our due fulfillment of all obligations under the aforementioned loan agreement as well as for all other claims that Tjustbygdens Sparbank might have against Elfa International AB.

 

(c) we, the undersigned, has issued a guarantee dated 2009-04-27 for all our subsidiaries ad infinitum obligations towards Tjustbygdens Sparbank AB. (Annex 2)

 

WE HEREBY CONFIRM

 

that all assets (detailed in Annex 1) that we have pledged to Tjustbygdens Sparbank AB as well as the guarantee mentioned under (c) above will, after the transfer of all rights under the above mentioned loan agreement, also serve as security for all the obligations towards Swedbank AB under the aforementioned loan agreement as if Swedbank AB had been the initial lender to Elfa International AB.

 

For the avoidance of doubt it is hereby also confirmed that since Tjustbygdens Sparbank AB have remaining claims on Elfa International AB for which claims the assets (detailed in Annex 1) as well as the guarantee mentioned under (c) above are pledged, Swebank AB and Tjustbygdens Sparbank AB have equal rights to the pledged assets as well as the guarantee mentioned under (c) above, according to their respective claims on Elfa International AB.

 

Malmö and Västervik, January 24th, 2012

 

	
/s/ Per Von Mentzer
    	
 
    

 

ELFA INTERNATIONAL AB

 

 

TRANSFER CERTIFICATE

 

ELFA INTERNATIONAL AB (“the Borrower”), TJUSTBYGDENS SPARBANK AB (“the Bank”) and SWEDBANK AB (“ the New Bank”) has on September XX th, 2011 issued this Transfer Certificate in relation to a

 

SEK 312,500,000 REVOLVING CREDIT AND TREM LOAN FACILITY AGGREMENT DATED APRIL 27th, 2009 (the “Agreement”)

 

1.                              We refer to the Agreement. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

 

2.                              We refer to Clause 16 (Assignment):

 

(a)                                   The Bank and the New Bank agree to the Bank transferring to the New Bank all of the Bank’s commitments, rights and obligations referred to in the Agreement and in Schedule 1.

 

(b)                                   The transfer date is January xx, 2012.

 

(c)                                    The New Bank and address, fax number and attention details for notices of the New Bank for the purposes of Clause 17 (Notices, etc.) are set out in Schedule 1.

 

3.                              The New Bank expressly acknowledges the limitations on the Bank’s obligations set out in paragraph of Clause 18 (Limitation of the Bank’s Liability).

 

4.                              This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

 

5.                              Elfa International AB confirms by its signature on this Transfer Certificate i.a. that the Bank shall have the right to receive all future information about the transferred commitments, rights and obligations as if the transfer had not been accomplished.

 

6.                              This Transfer Certificate is governed by the laws of Sweden.

 

	
SWEDBANK AB (publ)
    	
TJUSTBYGDENS SPARBANK AB
    
	
 
    	
 
    
	
/s/ Per Von Mentzer
    	
 
    

 

ELFA INTERNATIONAL AB

 

 

CONFIRMATION

 

WHEREAS,

 

(a) we, the undersigned, have been informed that Tjustbygdens Sparbank AB has transferred all their rights under a Revolving Credit and Term Loan Facility Agreement dated April 27th, 2009, with an original loan amount of SEK 312,500,000 and with Elfa International AB as borrower to Swedbank AB.

 

(b) we, the undersigned, have pledged certain assets (detailed in Annex 1) to Tjustbygdens Sparbank AB as security for Elfa International AB’s due fulfillment of all obligations under the aforementioned loan agreement as well as for all other claims that Tjustbygdens Sparbank might have against Elfa international AB

 

WE HEREBY CONFIRM

 

that all assets and detailed in Annex 1 that we have pledged to Tjustbygdens Sparbank AB will, after the transfer of all rights under the above mentioned loan agreement, also serve as security for all the obligations towards Swedbank AB under the aforementioned loan agreement as if Swedbank AB had been the initial lender to Elfa International AB.

 

For the avoidance of doubt it is hereby also confirmed that since Tjustbygdens Sparbank AB have remaining claims on Elfa International AB for which claims the assets detailed in Annex 1 are pledged, Swebank AB and Tjustbygdens Sparbank AB have equal rights to the pledged assets, according to their respective claims on Elfa International AB.

 

Malmö and Västervik, January    th, 2012

 

	
ELFA SWEDEN AB
    	
OY ELFA FINLAND
    	
ELFA LUMI AB
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
LUMINATOR AKTIEBOLAGExhibit 10.17

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made as of [ · ], 2013 by and between The Container Store Group, Inc., a Delaware corporation (the “Company”), and [ · ] (“Indemnitee”).

 

RECITALS:

 

WHEREAS, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself;

 

WHEREAS, highly competent persons have become more reluctant to serve as directors or in other capacities unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, (i) the Certificate of Incorporation of the Company (as may be amended from time to time, the “Certificate of Incorporation”) and the Bylaws of the Company (as may be amended from time to time, the “Bylaws”) require indemnification of the officers and directors of the Company, (ii) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”) and (iii) the Certificate of Incorporation, the Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Board, officers and other persons with respect to indemnification;

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation and Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder, and

 

WHEREAS, (i) Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, (ii) Indemnitee may not be willing to serve or continue to serve as a director or officer without adequate protection, (iii) the Company desires Indemnitee to serve in such capacity, and (iv) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.              Definitions.

 

(a)           As used in this Agreement:

 

“Affiliate” of any specified Person shall mean any other Person controlling, controlled by or under common control with such specified Person.

 

 

“Corporate Status” describes the Indemnitee’s past, present or future status as a director, officer, fiduciary, trustee, employee or agent of (i) the Company or (ii) any other Enterprise of which such person is or was serving at the request of the Company.

 

“Enterprise” shall mean the Company and any of its subsidiaries and any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent, fiduciary or trustee.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Expenses” shall mean all reasonable direct and indirect costs, expenses, fees and charges (including without limitation attorneys’ fees, retainers, court costs, transcript costs, fees and cost of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses) of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding.  Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of respect of or relating to, any Proceeding, including without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 11(d) only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and (iv) any interest, assessments or other charges in respect of the foregoing.

 

“Indemnity Obligations” shall mean all obligations of the Company to Indemnitee under this Agreement, including the Company’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.

 

“Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent:  (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder; provided, however, that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.

 

“Liabilities” means (i) all claims, liabilities, damages, losses, judgments (including pre- and post-judgment interest), orders, fines, penalties and other amounts payable in connection with, arising out of, or in respect of or relating to any Proceeding, including, without limitation, amounts paid in settlement in any Proceeding and all costs and expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding.

 

“Person” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.

 

2

 

“Proceeding” shall mean any actual threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, inquiry, administrative hearing or any other actual, threatened, pending or completed judicial, administrative or arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought by or in the name or right of the Company or otherwise, and whether of a civil, criminal, administrative or investigative nature, in each case, in which Indemnitee was, is or will be, or is threatened to be, involved as a party, witness or otherwise by reason of the Indemnitee’s Corporate Status, or by reason of any actual or alleged action taken by Indemnitee or of any inaction on Indemnitee’s part while having any Corporate Status, in each case, whether or not serving in such capacity at the time any Liability or Expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement.

 

[“Sponsor Entities” means (i) Leonard Green & Partners, L.P. and (ii) any Affiliate of any Person referenced in the preceding clause (i); provided, however, that neither the Company nor any of its subsidiaries shall be considered Sponsor Entities hereunder.](1)

 

(b)           For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, fiduciary, trustee, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, fiduciary, trustee, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

Section 2.              Indemnity in Third-Party Proceedings.  The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding (other than any Proceeding brought by or in the name or right of the Company to procure a judgment in its favor), or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

Section 3.              Indemnity in Proceedings by or in the Right of the Company.   The Company shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with any Proceeding brought by or in the name or right of the Company to procure a judgment in its favor, or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.  No indemnification for Liabilities and Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

 

Section 4.              Indemnification for Expenses as a Party Who is Partly Successful. Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee

 

(1)  Applicable with respect to certain Indemnitees affiliated with Leonard Green & Partners, L.P. only.

 

3

 

under any other provision hereof, to the fullest extent permitted by applicable law, to the extent that (i) Indemnitee is a party to (or a participant in) any Proceeding, (ii) the Company is not permitted by applicable law to indemnify Indemnitee with respect to any claim brought in such Proceeding if such claim is asserted successfully against Indemnitee and (iii) Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise (including settlement thereof), as to one or more but less than all claims, issues or matters in such Proceeding, then the Company shall indemnify Indemnitee against all Liabilities and Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter in such a Proceeding.  For purposes of this Section 4 and without limitation, the termination of any Proceeding or claim, issue or matter in such a Proceeding by settlement, entry of a plea of nolo contendere or by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 5.              Indemnification For Expenses as a Witness.  Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Liabilities and Expenses suffered or incurred by him or on his behalf in connection therewith.

 

Section 6.              Additional Indemnification.

 

(a)           Notwithstanding any limitation in Sections 2, 3, or 4, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the name or right of the Company to procure a judgment in its favor) against all Liabilities and Expenses suffered or incurred by Indemnitee in connection with such Proceeding:

 

i.              to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

 

ii.             to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

(b)           Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification in connection with any claim made against Indemnitee for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act or similar provisions of state statutory law or common law; provided, however, that this Section 6(b) shall not negate Indemnitee’s right to the advancement of Expenses unless and to the extent that the Company reasonably determines that Indemnitee violated Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws and must disgorge profits in connection with such violation; further provided, however, that notwithstanding anything to the contrary stated or implied in this Section 6(b), indemnification pursuant to this Agreement relating to any Proceeding against Indemnitee for an accounting of profits made from the purchase or sale by Indemnitee of securities of the Company pursuant to the provisions of Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws shall not be prohibited if Indemnitee ultimately establishes in any a final, non-appealable judgment, by a court of competent jurisdiction, that no recovery of such profits from Indemnitee is permitted under Section 16(b) of the Exchange Act or similar provisions of any federal, state or local laws.

 

4

 

Section 7.              Advances of Expenses.  In accordance with the pre-existing provision of Article VII of the Certificate of Incorporation, and notwithstanding any provision of this Agreement to the contrary, the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made no later than ten (10) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.  Advances shall be unsecured and interest-free.  Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.  Advances shall include any and all Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed.  The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay such advances if and to the extent that it is ultimately determined in a decision by a court of competent jurisdiction from which no appeal can be taken that Indemnitee is not entitled to be indemnified by the Company.

 

Section 8.              Procedure for Notification and Defense of Claim.

 

(a)           Indemnitee shall notify the Company in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof.  The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding.  To obtain indemnification or advancement of Expenses under this Agreement, Indemnitee shall submit to the Company a written request therefor, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding.  Any delay or failure by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification or advancement of Expenses, advise the Board in writing that Indemnitee has made such a request.

 

(b)           In the event Indemnitee is entitled to indemnification or advancement of Expenses with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably withheld, conditioned or delayed) to represent Indemnitee in, and with respect to, such Proceeding, at the sole expense of the Company, or (ii) have the Company assume the defense of Indemnitee in such Proceeding, in which case the Company shall assume the defense of such Proceeding with counsel selected by the Company and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Company’s receipt of written notice of Indemnitee’s election to cause the Company to do so.  If the Company is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and the Company shall be solely responsible for all fees and expenses of such legal counsel and otherwise of such defense.  Such legal counsel may represent both Indemnitee and the Company (and/or any other party or parties entitled to be indemnified by the Company with respect to such matter) unless, in the reasonable opinion of Indemnitee (after consultation with legal counsel), there is an actual or potential conflict of interest between Indemnitee and the Company (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Company (or any such other party or parties).  Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate counsel at its own expense.  The party having responsibility for defense of a Proceeding shall provide the other party and its counsel with all copies of pleadings and material correspondence

 

5

 

relating to the Proceeding.  Indemnitee and the Company shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Company or Indemnitee assumes the defense thereof.  Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Company, which consent shall not be unreasonably withheld, conditioned or delayed.  The Company may not settle or compromise any Proceeding without the prior written consent of Indemnitee, which consent shall not be unreasonably withheld, conditioned or delayed.

 

Section 9.              Procedure Upon Application for Indemnification.

 

(a)           Upon written request by Indemnitee for indemnification pursuant to Section 8(a), the Company shall advance all reasonable fees and expenses necessary to defend against a Claim pursuant to the undertaking set forth in Section 7 hereof.   If any determination by the Company is required by applicable law with respect to Indemnitee’s ultimate entitlement to indemnification, such determination shall be made (i) if Indemnitee shall request such determination be made by Independent Counsel, by Independent Counsel, and (ii) in all other circumstances, in any manner permitted by the DGCL.  Subject to Sections 9(c) and 10 hereof, the Company shall use reasonable best efforts to make such determination within thirty (30) days after receipt of Indemnitee’s written request for indemnification pursuant to this Agreement.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.  The Company will not deny any written request for indemnification hereunder made by Indemnitee unless an adverse determination as to Indemnitee’s entitlement to such indemnification described in this Section 9(a) has been made.  The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.  The Company shall be bound by and shall have no right to challenge a favorable determination of Indemnitee’s entitlements.

 

(b)           In the event any determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 9(a) hereof, (i) the Independent Counsel shall be selected by the Company within ten (10) days of the Submission Date (the cost of each such counsel to be paid by the Company), (ii) the Company shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company Indemnitee’s written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 1 of this Agreement.  Absent a timely objection, the person so selected shall act as Independent Counsel.  If a written objection is so made by Indemnitee, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court of competent jurisdiction has determined that such objection is without merit.  If no Independent Counsel shall have been selected and not objected to before the later of (i) thirty (30) days after the submission by Indemnitee of a written request for indemnification pursuant to Section  9(a) hereof (the “Submission Date”) and (ii) ten (10) days after the final disposition of the Proceeding, each of the Company and Indemnitee shall select a law firm or member of a law firm meeting the qualifications to serve as Independent Counsel, and such law firms or members of law firms shall select the Independent Counsel.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 11(a) of this Agreement, Independent Counsel shall

 

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be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

(c)           Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided that, in absence of any such determination with respect to such Proceeding, the Company shall pay Liabilities and advance Expenses with respect to such Proceeding as if the Company had determined the Indemnitee to be entitled to indemnification and advancement of Expenses with respect to such Proceeding.

 

Section 10.            Presumptions and Effect of Certain Proceedings.

 

(a)           In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)           If the person, persons or entity empowered or selected under Section 9 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if (i) the determination is to be made by Independent Counsel and Indemnitee objects to the Company’s selection of Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.

 

(c)           The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo  contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.

 

(d)           Effect of Settlement.  To the greatest extent permitted by law, settlement of any Proceeding without any finding of responsibility, wrongdoing or guilt on the part of the Indemnitee with respect to claims asserted in such Proceeding shall constitute a conclusive determination that Indemnitee is entitled to indemnification hereunder with respect to such Proceeding.

 

(e)           Reliance as Safe Harbor.  For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or

 

7

 

books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers, employees, board (or committees thereof) or agents of the Enterprise in the course of their duties, or on the advice of legal counsel or other advisors (including financial advisors and accountants) for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, actuary or other expert or advisor selected with reasonable care by the Enterprise.  The provisions of this Section 10(e) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(f)                                   Actions of Others.  The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

Section 11.                                    Remedies of Indemnitee.

 

(a)                                 In the event that (i) a determination is made pursuant to Section 9 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(a) of this Agreement within forty-five (45) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 4 or 5 or the second to last sentence of Section 9(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of competent jurisdiction of Indemnitee’s entitlement to such indemnification and/or advancement of Expenses.  Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)                                 In the event that a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 11 shall be conducted in all respects as a de  novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 11, the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

(c)                                  If a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11, absent a prohibition of such indemnification under applicable law.

 

(d)                                 The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 11 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.  It is the intent of the Company that the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this

 

8

 

Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder.  The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action or proceeding brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement, any other agreement, or the Certificate of Incorporation or Bylaws of the Company, or under any directors’ and officers’ liability insurance policies maintained by the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

 

Section 12.                                    Non-exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a)                                 The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, the Bylaws and/or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)                                 The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided by one or more Persons with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1).  The Company hereby acknowledges and agrees that (i) the Company  shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Company shall be primarily liable for all Indemnification Obligations and any indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by law, organizational or constituent documents, contract (including this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1) to indemnify Indemnitee and/or advance Expenses to Indemnitee in respect of any proceeding shall be secondary to the obligations of the Company hereunder, (iv) the Company shall be required to indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated (including, any Sponsor Entity) or insurer of any such Person and (v) the Company irrevocably waives, relinquishes and releases [(1)](1) any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1) from any claim of contribution, subrogation, reimbursement, exoneration or indemnification, or any other recovery of any kind in respect of amounts paid by the Company hereunder[; and (2) any right to participate in any claim or remedy of Indemnitee against any Sponsor Entity (or former Sponsor Entity), whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from any Sponsor Entity (or former Sponsor Entity), directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or

 

9

 

right](1).  In the event any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1) or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Company or payable under any insurance policy provided under this Agreement, the payor shall have a right of subrogation against the Company or its insurer or insurers for all amounts so paid which would otherwise be payable by the Company or its insurer or insurers under this Agreement.  In no event will payment of an Indemnity Obligation of the Company under this Agreement by any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1) or their insurers affect the obligations of the Company hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1).  Any indemnification and/or insurance or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1) with respect to any liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person is specifically in excess over any Indemnity Obligation of the Company or any valid and collectible insurance (including but not limited to any malpractice insurance or professional errors and omissions insurance) provided by the Company under this Agreement, and any obligation to provide indemnification and/or insurance or advance Expenses of any other Person with whom or which Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1) shall be reduced by any amount that Indemnitee collects from the Company as an indemnification payment or advancement of Expenses pursuant to this Agreement.

 

(c)                                  To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, fiduciaries, trustees or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee, fiduciary, trustee or agent under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

 

(d)                                 In the event of any payment under this Agreement, the Company shall not be subrogated to and hereby waives any rights to be subrogated to any rights of recovery of Indemnitee, including rights of indemnification provided to Indemnitee from any other person or entity with whom Indemnitee may be associated [(including, without limitation, any Sponsor Entity)](1) as well as any rights to contribution that might otherwise exist; provided, however, that the Company shall be subrogated to the extent of any such payment of all rights of recovery of Indemnitee under insurance policies of the Company or any of its subsidiaries.

 

(e)                                  The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.

 

Section 13.                                    Duration of Agreement; Not Employment Contract.  This Agreement shall continue until and terminate upon the latest of: (i) ten (10) years after the date that Indemnitee shall have ceased to serve as a director, officer, employee, fiduciary, trustee or agent of the Company or (at the request of the Company) any other Enterprise and (ii) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any action or proceeding commenced by Indemnitee pursuant

 

10

 

to Section 11 of this Agreement relating thereto.  This Agreement shall be binding upon the Company and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators.  The Company shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by written agreement, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.  This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.  Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director of the Company, by the Certificate of Incorporation, and Bylaws, and the DGCL.

 

Section 14.                                    Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 15.                                    Enforcement.

 

(a)                                 The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director, officer, employee, fiduciary, trustee or agent of the Company or (at the request of the Company) any other Enterprise.

 

(b)                                 This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

(c)                                  The parties hereto agree that each party hereto may enforce this Agreement by seeking specific performance hereof, without any necessity of showing irreparable harm or posting a bond, which requirements are hereby waived, and that by seeking specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which he or she may be entitled.

 

Section 16.                                    Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by all of the parties hereto.  Except as otherwise expressly provided herein, the rights of a party hereunder (including the right to enforce the obligations hereunder of the other parties) may be waived only with the written consent of such party, and no waiver

 

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of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

 

Section 17.                                    Notices.   All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

 

(a)                                 If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

 

(b)                                 If to the Company to

 

500 Freeport Parkway

Coppell, Texas 75019

Attention: William A. Tindell, III

 

 

and

 

Latham & Watkins LLP

885 Third Avenue

New York, New York 10022

Attention: Howard A. Sobel, Esq.

Fax: (212) 751-4864

E-mail:  howard.sobel@lw.com

 

or to any other address as may have been furnished to Indemnitee by the Company.

 

Section 18.                                    Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company and any other Enterprise (and their other respective directors, officers, employees, fiduciaries, trustees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

Section 19.                                    Applicable Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules that would require the application of any other laws. The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware (unless the Chancery Court declines to accept jurisdiction over a particular matter, in which case, in any Delaware state or federal court within the State of Delaware) (the “Chosen Courts”), and not in any other state or federal court in the United States of America or any court in any other country,

 

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(ii) consent to submit to the exclusive jurisdiction of the Chosen Courts for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Chosen Courts, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Chosen Courts has been brought in an improper or inconvenient forum.

 

Section 20.                                    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

Section 21.                                    [Third-Party Beneficiaries.  The Sponsor Entities are intended third-party beneficiaries of this Agreement.](1)

 

Section 22.                                    Miscellaneous.  Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

 

	
THE   CONTAINER STORE GROUP, INC.
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    
	
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Name:
    	
 
    	
 
    	
Name:
    	
 
    
	
Office:
    	
 
    	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

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