Document:

Exhibit 10.7

 

	
   

  	
  ATTACHMENT
  A

  

 

INDEMNIFICATION AGREEMENT

 

This
INDEMNIFICATION AGREEMENT is made and entered into as of the 18th day of May,
2005 (the “Agreement”), by and between United Stationers Inc., a Delaware
corporation (the “Company”), the director or executive officer of the Company
whose name appears on the signature page of this Agreement (“Indemnitee”),
and for purposes of Section 9 only, United Stationers Supply Co., an
Illinois corporation and wholly-owned subsidiary of the Company (“USSCO”).

 

WHEREAS,
highly competent persons are becoming more reluctant to serve publicly-held
corporations as directors or executive officers or in other capacities unless
they are provided with reasonable protection through insurance or
indemnification against risks of claims and actions against them arising out of
their service to and activities on behalf of the corporations.

 

WHEREAS,
the Board of Directors of the Company (the “Board”) has determined that the
Company should act to assure its directors and executive officers that there
will be increased certainty of such protection in the future.

 

WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

 

WHEREAS, Indemnitee
is willing to serve, to continue to serve and to take on additional service for
or on behalf of the Company on the condition that Indemnitee be so indemnified.

 

WHEREAS,
in consideration of the benefits received and to be received by the Company in
connection with actions taken and to be taken by the Board and by the officers
of the Company, the Company has determined that it is in the best interest of
the Company for the reasons set forth above to be a party to this Agreement and
to provide indemnification to the directors and executive officers of the
Company in connection with their service to and activities on behalf of the
Company and its subsidiaries.

 

WHEREAS,
the Company acknowledges that for purposes of this Agreement the directors and
executive officers of the Company who enter into this Agreement are serving in
such capacities at the request of the Company.

 

WHEREAS,
the Company further acknowledges that such directors and executive officers are
willing to serve, to continue to serve and to take on additional service for or
on behalf of the Company, thereby benefiting the Company and its subsidiaries,
on the condition that the Company enter into, and provide indemnification
pursuant to, this Agreement.

 

 

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

 

1.                                      Definitions.

 

(a)                                 For purposes of
this Agreement:

 

(i)            “Affiliate” shall mean any
corporation, partnership, joint venture, trust or other enterprise in respect
of which Indemnitee is or was or will be serving directly or indirectly at the
request of the Company.

 

(ii)           “Disinterested Director” shall mean a
director of the Company who is not or was not a party to the Proceeding in
respect of which indemnification is being sought by Indemnitee.

 

(iii)          “Expenses” shall include all
reasonable attorneys’ fees and costs, retainers, court costs, transcripts, fees
of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other
disbursements or expenses incurred in connection with asserting or defending
claims.

 

(iv)          “Independent Counsel” shall mean a law
firm or lawyer that neither is presently nor in the past calendar year has been
retained to represent: (i) the Company or Indemnitee in any matter
material to any such party or (ii) any other party to the Proceeding
giving rise to a claim for indemnification hereunder in any matter material to
such other party. Notwithstanding the foregoing, the term “Independent Counsel”
shall not include any law firm or person who, under the applicable standards of
professional conduct then prevailing, would have a conflict of interest in
representing any of the Company or Indemnitee in an action to determine
Indemnitee’s right to indemnification under this Agreement. All Expenses of the
Independent Counsel incurred in connection with acting pursuant to this
Agreement shall be borne by the Company.

 

(v)           “Losses” shall mean all liabilities,
losses and claims (including judgments, fines, penalties and amounts to be paid
in settlement) incurred in connection with any Proceeding.

 

(vi)          “Proceeding” shall include any
threatened, pending or completed action, suit, arbitration, mediation,
alternate dispute resolution mechanism, investigation, administrative hearing
or any other proceeding, whether civil, criminal, administrative or
investigative.

 

2.                                      Service by
Indemnitee. Indemnitee agrees to begin or continue to serve
the Company or any Affiliate as a director or an executive officer.
Notwithstanding anything contained herein, this Agreement shall not create a
contract of employment between the Company and Indemnitee, and the termination
of Indemnitee’s relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

 

3.                                      Indemnification. The Company
agrees to indemnify Indemnitee for, and hold Indemnitee harmless from and
against, any Losses or Expenses at any time incurred by or assessed

 

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against
Indemnitee arising out of or in connection with the service of Indemnitee as a
director or an executive officer of the Company or in any capacity for an
Affiliate at the request of the Company (collectively referred to as a “Director
or an Officer of the Company”) to the fullest extent permitted by the laws of
the State of Delaware in effect on the date hereof or as such laws may from
time to time hereafter be amended to increase the scope of such permitted
indemnification. Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

 

4.             Action or Proceeding Other Than
an Action by or in the Right of the Company. Indemnitee shall be entitled
to the indemnification rights provided herein if Indemnitee is a person who was
or is made a party or is threatened to be made a party to or is involved
(including, without limitation, as a witness) in any Proceeding, other than an
action by or in the right of the Company, as the case may be, by reason of (a) the
fact that Indemnitee is or was a Director or an Officer of the Company or (b) anything
done or not done by Indemnitee in any such capacity.

 

5.             Actions by or in the Right of
the Company. Indemnitee shall be entitled to the indemnification rights
provided herein if Indemnitee is a person who was or is a party or is
threatened to be made a party to or is involved (including, without limitation,
as a witness) in any Proceeding brought by or in the right of the Company to
procure a judgment in its favor by reason of (a) the fact that Indemnitee
is or was a Director or an Officer of the Company or (b) anything done or
not done by Indemnitee in any such capacity. Pursuant to this Section, Indemnitee
shall be indemnified against Losses or Expenses incurred or suffered by
Indemnitee or on Indemnitee’s behalf in connection with the defense or
settlement of any Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company. Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Delaware law expressly prohibits such indemnification by reason of an
adjudication of liability of Indemnitee to the Company unless and only to the
extent that the Court of Chancery of the State of Delaware or the court in
which such action or suit 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 indemnity for
such Losses and Expenses which the Court of Chancery or such other court shall
deem proper.

 

6.             Indemnification for Losses and
Expenses of Party Who is Wholly or Partly Successful. Notwithstanding any
other provision of this Agreement, to the extent that Indemnitee has been
wholly successful on the merits or otherwise in any Proceeding referred to in Section 3,
4 or 5 hereof on any claim, issue or matter therein, Indemnitee shall be
indemnified against all Losses and Expenses incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company agrees to indemnify Indemnitee to the maximum extent permitted by
law against all Losses and Expenses incurred by Indemnitee in connection with each
successfully resolved claim, issue or matter. In any review or Proceeding to
determine the extent of indemnification, the Company shall bear the burden of
proving any lack of success and which amounts sought in indemnity are allocable
to claims, issues or matters which were not successfully resolved. For purposes
of this Section and without limitation, the termination of any such claim,
issue or matter

 

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by
dismissal with or without prejudice shall be deemed to be a successful
resolution as to such claim, issue or matter.

 

7.                                      Payment for
Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was a Director or an Officer of the Company, a witness in any
Proceeding, the Company agrees to pay to Indemnitee all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith.

 

8.                                      Advancement of
Expenses. All Expenses incurred by or on behalf of
Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in connection with any Proceeding shall be paid by the
Company in advance of the final disposition of such Proceeding within twenty days
after the receipt by the Company of a statement or statements from Indemnitee
requesting from time to time such advance or advances, whether or not a
determination to indemnify has been made under Section 10. Indemnitee’s
entitlement to such advancement of Expenses shall include those incurred in
connection with any Proceeding by Indemnitee seeking an adjudication or award
in arbitration pursuant to this Agreement. The financial ability of Indemnitee
to repay an advance shall not be a prerequisite to the making of such advance.
Such statement or statements shall reasonably evidence such Expenses incurred
(or reasonably expected to be incurred) by Indemnitee in connection therewith
and shall include or be accompanied by a written undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified therefor pursuant to the terms of
this Agreement.

 

9.                                      Guarantee.  In the event that the Company fails or is
unable to perform any of its payment obligations under the terms of this
Agreement, USSCO hereby unconditionally guarantees that it will perform the
obligations of the Company and pay Indemnitee for any Losses or Expenses for
which Indemnitee is entitled to be indemnified or for Expenses to be advanced
hereunder.  Such payment will be made
promptly upon request and without the necessity of a demand.

 

10.                               Procedure for
Determination of Entitlement to Indemnification.

 

(a)           When seeking indemnification under
this Agreement (which shall not include in any case the right of Indemnitee to
receive payments pursuant to Section 7 and Section 8 hereof, which
shall not be subject to this Section 10), Indemnitee shall submit a
written request for indemnification to the Company. Determination of Indemnitee’s
entitlement to indemnification shall be made promptly, but in no event later
than 30 days after receipt by the Company of Indemnitee’s written request for
indemnification. The Secretary of the Company shall, promptly upon receipt of
Indemnitee’s request for indemnification, advise the Board that Indemnitee has
made such request for indemnification.

 

(b)           The entitlement of Indemnitee to
indemnification under this Agreement shall be determined in the specific case (1)
by the Board by a majority vote of the Disinterested Directors, even though
less than a quorum, or (2) if there are no Disinterested Directors, or if
such Disinterested Directors so direct, by Independent Counsel or (3) by
the stockholders.

 

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(c)           In the event the determination of
entitlement is to be made by Independent Counsel, such Independent Counsel
shall be selected by the Indemnitee, subject to the approval of the Board, such
approval not to be unreasonably withheld. 
Upon failure of the Indemnitee to so select such Independent Counsel or
upon failure of the Board to so approve, such Independent Counsel shall be
selected by the American Arbitration Association of New York, New York or such
other person as such Association shall designate to make such selection.

 

(d)           If the determination made pursuant to
Section 10(b) is that Indemnitee is not entitled to indemnification
to the full extent of Indemnitee’s request, Indemnitee shall have the
right to seek entitlement to indemnification in accordance with the procedures
set forth in Section 11 hereof.

 

(e)           If the person or persons empowered
pursuant to Section 10(b) to make a determination with respect to
entitlement to indemnification shall have failed to make the requested determination
within 30 days after receipt by the Company of such request, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be absolutely entitled to such indemnification,
absent (i) misrepresentation by Indemnitee of a material fact in the
request for indemnification or (ii) a final judicial determination that
all or any part of such indemnification is expressly prohibited by law.

 

(f)            The termination of any Proceeding by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, adversely affect the rights of Indemnitee
to indemnification hereunder except as may be specifically provided herein, or
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, as the case may be, or create a presumption that
(with respect to any criminal action or proceeding) Indemnitee had reasonable
cause to believe that Indemnitee’s conduct was unlawful.

 

(g)           For purposes of any determination of
good faith hereunder, Indemnitee shall be deemed to have acted in good
faith if in taking such action Indemnitee relied on the records or books of account
of the Company or an Affiliate, including financial statements, or on
information supplied to Indemnitee by the officers of the Company or an
Affiliate in the course of their duties, or on the advice of legal counsel for
the Company or an Affiliate or on information or records given or reports made
to the Company or an Affiliate by an independent certified public accountant or
by an appraiser or other expert selected with reasonable care to the Company or
an Affiliate. The Company shall have the burden of establishing the absence of
good faith. The provisions of this Section 10(g) shall not be deemed
to be exclusive or to limit in any way the other circumstances in which
Indemnitee may be deemed to have met the applicable standard of conduct set
forth in this Agreement.

 

(h)           The knowledge and/or actions, or
failure to act, of any other director, officer, agent or employee of the
Company or an Affiliate shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.

 

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11.                               Remedies in
Cases of Determination Not to Indemnify or to Advance Expenses.

 

(a)           In the event that (i) a
determination is made that Indemnitee is not entitled to indemnification
hereunder, (ii) advances are not made pursuant to Section 8 hereof or (iii) payment
has not been timely made following a determination of entitlement to
indemnification pursuant to Section 10 hereof, Indemnitee shall be
entitled to seek a final adjudication either through an arbitration proceeding
or in an appropriate court of the State of Delaware or any other court of
competent jurisdiction of Indemnitee’s entitlement to such indemnification or
advance.

 

(b)           In the event a determination has been
made in accordance with the procedures set forth in Section 10 hereof, in
whole or in part, that Indemnitee is not entitled to indemnification, any
judicial proceeding or arbitration referred to in Section 11(a) shall
be de novo and Indemnitee shall not be prejudiced by reason of any such prior
determination that Indemnitee is not entitled to indemnification, and the
Company shall bear the burdens of proof specified in Sections 6 and 10 hereof
in such proceeding.

 

(c)           If a determination is made or deemed
to have been made pursuant to the terms of Section 10 hereof or this Section 11
that Indemnitee is entitled to indemnification, the Company shall be bound by
such determination in any judicial proceeding or arbitration in the absence of (i) a
misrepresentation of a material fact by Indemnitee or (ii) a final
judicial determination that all or any part of such indemnification is
expressly prohibited by law.

 

(d)           To the extent deemed appropriate by
the court, interest shall be paid by the Company to Indemnitee at a rate equal
to the rate paid by the Company or its subsidiaries to the principal senior
secured lender thereto for amounts which the Company indemnifies or is obliged
to indemnify Indemnitee for the period commencing with the date on which
Indemnitee requested indemnification (or reimbursement or advancement of any
Expenses) and ending with the date on which such payment is made to Indemnitee
by the Company.

 

12.                               Expenses
Incurred by Indemnitee to Enforce this Agreement. All Expenses incurred by
Indemnitee in connection with the preparation and submission of Indemnitee’s
request for indemnification hereunder shall be borne by the Company. In the
event that Indemnitee is a party to or intervenes in any proceeding in which
the validity or enforceability of this Agreement is at issue or seeks an
adjudication to enforce Indemnitee’s rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole in
such action, shall be entitled to recover from the Company, and shall be
indemnified by the Company against, any Expenses incurred by Indemnitee. If it
is determined that Indemnitee is entitled to indemnification for part (but not
all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which Indemnitee is entitled to
indemnification and for claims, issues or matters for which Indemnitee is not
so entitled.

 

13.                               Non-Exclusivity.  The rights of indemnification and to receive
advances as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under any law,
certificate of incorporation, by-law, other agreement, vote of stockholders or
resolution of directors or otherwise, both as to action in Indemnitee’s
official capacity and as to action in another capacity while holding such
directorship or office. To the

 

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extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee’s position with the Company or an Affiliate or any other entity
which Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

 

14.                               Duration of
Agreement. This Agreement shall apply to any claim asserted
and any Losses and Expenses incurred in connection with any claim asserted on
or after the effective date of this Agreement and shall continue until and
terminate upon the later of: (a) ten years after Indemnitee has ceased to
occupy any of the positions or have any of the relationships described in Section 3,
4 or 5 hereof; or (b) one year after the final termination of all pending
or threatened Proceedings of the kind described herein with respect to
Indemnitee. This Agreement shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s
spouse, assigns, heirs, devisee, executors, administrators or other legal
representatives.

 

15.                               Maintenance of
D&O Insurance.

 

(a)           The Company hereby covenants and
agrees with Indemnitee that, so long as Indemnitee shall continue to serve as a
Director or an Officer of the Company and thereafter so long as Indemnitee
shall be subject to any possible claim or threatened, pending or completed
Proceeding, whether civil, criminal or investigative, by reason of the fact
that Indemnitee was a Director or an Officer of the Company or any other entity
which Indemnitee was serving at the request of the Company, the Company shall
maintain in full force and effect (i) the directors’ and officers’ liability
insurance issued by the insurer and having the policy amount and deductible as
currently in effect with respect to directors and officers of the Company or
any of its subsidiaries and (ii) any replacement or substitute policies issued
by one or more reputable insurers providing in all respects coverage at least
comparable to and in the same amount as that currently provided under such
existing policy (collectively, “D&O Insurance”).

 

(b)           In all policies of D&O Insurance, Indemnitee
shall be named as an insured in such a manner as to provide Indemnitee the same
rights and benefits, subject to the same limitations, as are accorded to the
Company’s directors or officers most favorably insured by such policy.

 

(c)           Notwithstanding anything to the
contrary set forth in (a) above, the Company shall have no obligation to
maintain D&O Insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium cost for such insurance is
disproportionate to the amount of coverage provided or the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit.

 

(d)           If the Company ceases to maintain
D&O Insurance, the Company shall notify Indemnitee in writing of such
cessation within three (3) calendar days of the earlier of (i) the date
the Company determines to cease D&O Insurance or (ii) the date D&O
Insurance ceases.

 

16.                               Severability. Should any
part, term or condition hereof be declared illegal or unenforceable or in
conflict with any other law, the validity of the remaining portions or
provisions

 

7

 

hereof
shall not be affected thereby, and the illegal or unenforceable portions hereof
shall be and hereby are redrafted to conform with applicable law, while leaving
the remaining portions hereof intact.

 

17.                               Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document.

 

18.                               Headings. Section headings
are for convenience only and do not control or affect meaning or interpretation
of any terms or provisions hereof.

 

19.                               Modification
and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto.

 

20.                               No Duplicative
Payment. The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment (net of Expenses
incurred in collecting such payment) under any insurance policy, contract,
agreement or otherwise.

 

21.                               Notices. All notices,
requests, demands and other communications provided for by this Agreement shall
be in writing (including telecopier or similar writing) and shall be deemed to
have been given at the time when mailed, enclosed in a registered or certified
postpaid envelope, in any general or branch office of the United States Postal
Service, or sent by Federal Express or other similar overnight courier service,
addressed to the address of the parties stated below or to such changed address
as such party may have fixed by notice or, if given by telecopier, when such
telecopy is transmitted and the appropriate answer back is received.

 

(a)                                 If to
Indemnitee, to the address appearing on the signature page hereof.

 

(b)                                 If to the
Company, to:

 

United
Stationers Inc.

2200 East Golf Road

Des Plaines, Illinois 60016-1267

Attention: General Counsel

 

22.                               Governing Law. The parties
agree that this Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Delaware without regard to
its conflicts of law rules.

 

23.                               Construction.  The parties acknowledge that this Agreement
is the result of arm’s-length negotiations between sophisticated parties each
afforded representation by legal counsel. 
Each and every provision of this Agreement shall be construed as though
both parties participated equally in the drafting of same, and any rule of
construction that a document shall be construed against the drafting party
shall not be applicable to this Agreement.

 

24.                               Entire
Agreement. Subject to the provisions of Section 13
hereof, this Agreement constitutes the entire understanding between the parties
and supersedes all proposals,

 

8

 

commitments, writings, negotiations and understandings, oral and
written, and all other communications between the parties relating to the
subject matter hereof. This Agreement may not be amended or otherwise modified
except in writing duly executed by all of the parties. A waiver by any party of
any breach or violation of this Agreement shall not be deemed or construed as a
waiver of any subsequent breach or violation thereof.

 

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

 

	
   

  	
  UNITED STATIONERS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard W. Gochnauer

  
	
   

  	
  Name: Richard W. Gochnauer

  
	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen A. Schultz

  
	
   

  	
   

  
	
   

  	
  Name:
  Stephen A. Schultz

  
	
   

  	
  Address:

  
	
   

  	
  City
  and State:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  For
  the purposes of Section 9 only,

  
	
   

  	
   

  
	
   

  	
  UNITED
  STATIONERS SUPPLY CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard W. Gochnauer

  
	
   

  	
  Name: Richard W. Gochnauer

  
	
   

  	
  Title: President and Chief Executive Officer

  

 

9Exhibit 10.8

 

ATTACHMENT A

 

INDEMNIFICATION AGREEMENT

 

This
INDEMNIFICATION AGREEMENT is made and entered into as of the 28th day of July,
2004 (the “Agreement”), by and between United Stationers Inc., a Delaware
corporation (the “Company”), the director or executive officer of the Company
whose name appears on the signature page of this Agreement (“Indemnitee”),
and for purposes of Section 9 only, United Stationers Supply Co., an
Illinois corporation and wholly-owned subsidiary of the Company (“USSCO”).

 

WHEREAS,
highly competent persons are becoming more reluctant to serve publicly-held
corporations as directors or executive officers or in other capacities unless
they are provided with reasonable protection through insurance or
indemnification against risks of claims and actions against them arising out of
their service to and activities on behalf of the corporations.

 

WHEREAS,
the Board of Directors of the Company (the “Board”) has determined that the
Company should act to assure its directors and executive officers that there
will be increased certainty of such protection in the future.

 

WHEREAS,
it is reasonable, prudent and necessary for the Company contractually to
obligate itself to indemnify such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Company free
from undue concern that they will not be so indemnified.

 

WHEREAS, Indemnitee
is willing to serve, to continue to serve and to take on additional service for
or on behalf of the Company on the condition that Indemnitee be so indemnified.

 

WHEREAS,
in consideration of the benefits received and to be received by the Company in
connection with actions taken and to be taken by the Board and by the officers
of the Company, the Company has determined that it is in the best interest of
the Company for the reasons set forth above to be a party to this Agreement and
to provide indemnification to the directors and executive officers of the
Company in connection with their service to and activities on behalf of the
Company and its subsidiaries.

 

WHEREAS,
the Company acknowledges that for purposes of this Agreement the directors and
executive officers of the Company who enter into this Agreement are serving in
such capacities at the request of the Company.

 

WHEREAS,
the Company further acknowledges that such directors and executive officers are
willing to serve, to continue to serve and to take on additional service for or
on behalf of the Company, thereby benefiting the Company and its subsidiaries,
on the condition that the Company enter into, and provide indemnification
pursuant to, this Agreement.

 

 

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

 

1.                                      Definitions.

 

(a)                                 For purposes of
this Agreement:

 

(i)                                     “Affiliate”
shall mean any corporation, partnership, joint venture, trust or other
enterprise in respect of which Indemnitee is or was or will be serving directly
or indirectly at the request of the Company.

 

(ii)                                  “Disinterested
Director” shall mean a director of the Company who is not or was not a party to
the Proceeding in respect of which indemnification is being sought by
Indemnitee.

 

(iii)                               “Expenses”
shall include all reasonable attorneys’ fees and costs, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees
and all other disbursements or expenses incurred in connection with asserting
or defending claims.

 

(iv)                              “Independent
Counsel” shall mean a law firm or lawyer that neither is presently nor in the
past calendar year has been retained to represent: (i) the Company or
Indemnitee in any matter material to any such party or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder in
any matter material to such other party. Notwithstanding the foregoing, the
term “Independent Counsel” shall not include any law firm or person who, under
the applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing any of the Company or Indemnitee in an
action to determine Indemnitee’s right to indemnification under this Agreement.
All Expenses of the Independent Counsel incurred in connection with acting
pursuant to this Agreement shall be borne by the Company.

 

(v)                                 “Losses” shall
mean all liabilities, losses and claims (including judgments, fines, penalties
and amounts to be paid in settlement) incurred in connection with any
Proceeding.

 

(vi)                              “Proceeding”
shall include any threatened, pending or completed action, suit, arbitration,
mediation, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding, whether civil, criminal,
administrative or investigative.

 

2.                                      Service by
Indemnitee. Indemnitee agrees to begin or continue to serve
the Company or any Affiliate as a director or an executive officer.
Notwithstanding anything contained herein, this Agreement shall not create a
contract of employment between the Company and Indemnitee, and the termination
of Indemnitee’s relationship with the Company or an Affiliate by either party
hereto shall not be restricted by this Agreement.

 

3.                                      Indemnification. The Company
agrees to indemnify Indemnitee for, and hold Indemnitee harmless from and
against, any Losses or Expenses at any time incurred by or assessed

 

2

 

against
Indemnitee arising out of or in connection with the service of Indemnitee as a
director or an executive officer of the Company or in any capacity for an
Affiliate at the request of the Company (collectively referred to as a “Director
or an Officer of the Company”) to the fullest extent permitted by the laws of
the State of Delaware in effect on the date hereof or as such laws may from
time to time hereafter be amended to increase the scope of such permitted
indemnification. Without diminishing the scope of the indemnification provided
by this Section 3, the rights of indemnification of Indemnitee provided
hereunder shall include but shall not be limited to those rights set forth
hereinafter.

 

4.                                      Action or
Proceeding Other Than an Action by or in the Right of the Company. Indemnitee
shall be entitled to the indemnification rights provided herein if Indemnitee
is a person who was or is made a party or is threatened to be made a party to
or is involved (including, without limitation, as a witness) in any Proceeding,
other than an action by or in the right of the Company, as the case may be, by
reason of (a) the fact that Indemnitee is or was a Director or an Officer
of the Company or (b) anything done or not done by Indemnitee in any such
capacity.

 

5.                                      Actions by or
in the Right of the Company. Indemnitee shall be entitled
to the indemnification rights provided herein if Indemnitee is a person who was
or is a party or is threatened to be made a party to or is involved (including,
without limitation, as a witness) in any Proceeding brought by or in the right
of the Company to procure a judgment in its favor by reason of (a) the
fact that Indemnitee is or was a Director or an Officer of the Company or (b) anything
done or not done by Indemnitee in any such capacity. Pursuant to this Section, Indemnitee
shall be indemnified against Losses or Expenses incurred or suffered by
Indemnitee or on Indemnitee’s behalf in connection with the defense or
settlement of any Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company. Notwithstanding the foregoing provisions of this Section, no such
indemnification shall be made in respect of any claim, issue or matter as to
which Delaware law expressly prohibits such indemnification by reason of an adjudication
of liability of Indemnitee to the Company unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such
action or suit 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 indemnity for such Losses and Expenses
which the Court of Chancery or such other court shall deem proper.

 

6.                                      Indemnification
for Losses and Expenses of Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that
Indemnitee has been wholly successful on the merits or otherwise in any
Proceeding referred to in Section 3, 4 or 5 hereof on any claim, issue or
matter therein, Indemnitee shall be indemnified against all Losses and
Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Company agrees to indemnify
Indemnitee to the maximum extent permitted by law against all Losses and
Expenses incurred by Indemnitee in connection with each successfully resolved
claim, issue or matter. In any review or Proceeding to determine the extent of
indemnification, the Company shall bear the burden of proving any lack of
success and which amounts sought in indemnity are allocable to claims, issues or
matters which were not successfully resolved. For purposes of this Section and
without limitation, the termination of any such claim, issue or matter

 

3

 

by
dismissal with or without prejudice shall be deemed to be a successful
resolution as to such claim, issue or matter.

 

7.                                      Payment for
Expenses of a Witness. Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of the fact that
Indemnitee is or was a Director or an Officer of the Company, a witness in any
Proceeding, the Company agrees to pay to Indemnitee all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection
therewith.

 

8.                                      Advancement of
Expenses. All Expenses incurred by or on behalf of
Indemnitee (or reasonably expected by Indemnitee to be incurred by Indemnitee
within three months) in connection with any Proceeding shall be paid by the
Company in advance of the final disposition of such Proceeding within twenty days
after the receipt by the Company of a statement or statements from Indemnitee
requesting from time to time such advance or advances, whether or not a
determination to indemnify has been made under Section 10. Indemnitee’s
entitlement to such advancement of Expenses shall include those incurred in
connection with any Proceeding by Indemnitee seeking an adjudication or award
in arbitration pursuant to this Agreement. The financial ability of Indemnitee
to repay an advance shall not be a prerequisite to the making of such advance.
Such statement or statements shall reasonably evidence such Expenses incurred
(or reasonably expected to be incurred) by Indemnitee in connection therewith
and shall include or be accompanied by a written undertaking by or on behalf of
Indemnitee to repay such amount if it shall ultimately be determined that
Indemnitee is not entitled to be indemnified therefor pursuant to the terms of
this Agreement.

 

9.                                      Guarantee.  In the event that the Company fails or is
unable to perform any of its payment obligations under the terms of this
Agreement, USSCO hereby unconditionally guarantees that it will perform the
obligations of the Company and pay Indemnitee for any Losses or Expenses for
which Indemnitee is entitled to be indemnified or for Expenses to be advanced
hereunder.  Such payment will be made
promptly upon request and without the necessity of a demand.

 

10.                               Procedure for
Determination of Entitlement to Indemnification.

 

(a)                                 When seeking
indemnification under this Agreement (which shall not include in any case the
right of Indemnitee to receive payments pursuant to Section 7 and Section 8
hereof, which shall not be subject to this Section 10), Indemnitee
shall submit a written request for indemnification to the Company.
Determination of Indemnitee’s entitlement to indemnification shall be made
promptly, but in no event later than 30 days after receipt by the Company of
Indemnitee’s written request for indemnification. The Secretary of the Company
shall, promptly upon receipt of Indemnitee’s request for indemnification,
advise the Board that Indemnitee has made such request for indemnification.

 

(b)                                 The entitlement
of Indemnitee to indemnification under this Agreement shall be determined in
the specific case (1) by the Board by a majority vote of the Disinterested
Directors, even though less than a quorum, or (2) if there are no
Disinterested Directors, or if such Disinterested Directors so direct, by
Independent Counsel or (3) by the stockholders.

 

4

 

(c)                                  In the event
the determination of entitlement is to be made by Independent Counsel, such
Independent Counsel shall be selected by the Indemnitee, subject to the
approval of the Board, such approval not to be unreasonably withheld.  Upon failure of the Indemnitee to so select
such Independent Counsel or upon failure of the Board to so approve, such
Independent Counsel shall be selected by the American Arbitration Association
of New York, New York or such other person as such Association shall designate
to make such selection.

 

(d)                                 If the
determination made pursuant to Section 10(b) is that Indemnitee is
not entitled to indemnification to the full extent of Indemnitee’s request, Indemnitee
shall have the right to seek entitlement to indemnification in accordance with
the procedures set forth in Section 11 hereof.

 

(e)                                  If the person
or persons empowered pursuant to Section 10(b) to make a
determination with respect to entitlement to indemnification shall have failed
to make the requested determination within 30 days after receipt by the Company
of such request, the requisite determination of entitlement to indemnification
shall be deemed to have been made and Indemnitee shall be absolutely entitled
to such indemnification, absent (i) misrepresentation by Indemnitee of a
material fact in the request for indemnification or (ii) a final judicial
determination that all or any part of such indemnification is expressly
prohibited by law.

 

(f)                                   The termination
of any Proceeding by judgment, order, settlement or conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, adversely affect
the rights of Indemnitee to indemnification hereunder except as may be
specifically provided herein, or create a presumption that Indemnitee did not
act in good faith and in a manner which Indemnitee reasonably believed to be in
or not opposed to the best interests of the Company, as the case may be, or
create a presumption that (with respect to any criminal action or proceeding)
Indemnitee had reasonable cause to believe that Indemnitee’s conduct was
unlawful.

 

(g)                                  For purposes of
any determination of good faith hereunder, Indemnitee shall be deemed to
have acted in good faith if in taking such action Indemnitee relied on the
records or books of account of the Company or an Affiliate, including financial
statements, or on information supplied to Indemnitee by the officers of the
Company or an Affiliate in the course of their duties, or on the advice of
legal counsel for the Company or an Affiliate or on information or records
given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care to the Company or an Affiliate. The Company shall have the burden
of establishing the absence of good faith. The provisions of this Section 10(g) shall
not be deemed to be exclusive or to limit in any way the other circumstances in
which Indemnitee may be deemed to have met the applicable standard of conduct
set forth in this Agreement.

 

(h)                                 The knowledge
and/or actions, or failure to act, of any other director, officer, agent or
employee of the Company or an Affiliate shall not be imputed to Indemnitee for
purposes of determining the right to indemnification under this Agreement.

 

5

 

11.                               Remedies in
Cases of Determination Not to Indemnify or to Advance Expenses.

 

(a)                                 In the event
that (i) a determination is made that Indemnitee is not entitled to
indemnification hereunder, (ii) advances are not made pursuant to Section 8
hereof or (iii) payment has not been timely made following a determination
of entitlement to indemnification pursuant to Section 10 hereof, Indemnitee
shall be entitled to seek a final adjudication either through an arbitration
proceeding or in an appropriate court of the State of Delaware or any other
court of competent jurisdiction of Indemnitee’s entitlement to such
indemnification or advance.

 

(b)                                 In the event a
determination has been made in accordance with the procedures set forth in Section 10
hereof, in whole or in part, that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration referred to in Section 11(a) shall
be de novo and Indemnitee shall not be prejudiced by reason of any such prior
determination that Indemnitee is not entitled to indemnification, and the
Company shall bear the burdens of proof specified in Sections 6 and 10 hereof
in such proceeding.

 

(c)                                  If a
determination is made or deemed to have been made pursuant to the terms of Section 10
hereof or this Section 11 that Indemnitee is entitled to indemnification,
the Company shall be bound by such determination in any judicial proceeding or
arbitration in the absence of (i) a misrepresentation of a material fact
by Indemnitee or (ii) a final judicial determination that all or any part
of such indemnification is expressly prohibited by law.

 

(d)                                 To the extent
deemed appropriate by the court, interest shall be paid by the Company to
Indemnitee at a rate equal to the rate paid by the Company or its subsidiaries
to the principal senior secured lender thereto for amounts which the Company
indemnifies or is obliged to indemnify Indemnitee for the period commencing
with the date on which Indemnitee requested indemnification (or reimbursement
or advancement of any Expenses) and ending with the date on which such payment
is made to Indemnitee by the Company.

 

12.                               Expenses
Incurred by Indemnitee to Enforce this Agreement. All Expenses incurred by
Indemnitee in connection with the preparation and submission of Indemnitee’s
request for indemnification hereunder shall be borne by the Company. In the
event that Indemnitee is a party to or intervenes in any proceeding in which
the validity or enforceability of this Agreement is at issue or seeks an
adjudication to enforce Indemnitee’s rights under, or to recover damages for
breach of, this Agreement, Indemnitee, if Indemnitee prevails in whole in
such action, shall be entitled to recover from the Company, and shall be
indemnified by the Company against, any Expenses incurred by Indemnitee. If it
is determined that Indemnitee is entitled to indemnification for part (but not
all) of the indemnification so requested, Expenses incurred in seeking
enforcement of such partial indemnification shall be reasonably prorated among
the claims, issues or matters for which Indemnitee is entitled to
indemnification and for claims, issues or matters for which Indemnitee is not
so entitled.

 

13.                               Non-Exclusivity.  The rights of indemnification and to receive
advances as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under any law,
certificate of incorporation, by-law, other agreement, vote of stockholders or
resolution of directors or otherwise, both as to action in Indemnitee’s
official capacity and as to action in another capacity while holding such
directorship or office. To the

 

6

 

extent
Indemnitee would be prejudiced thereby, no amendment, alteration, rescission or
replacement of this Agreement or any provision hereof shall be effective as to
Indemnitee with respect to any action taken or omitted by such Indemnitee in
Indemnitee’s position with the Company or an Affiliate or any other entity
which Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

 

14.                               Duration of
Agreement. This Agreement shall apply to any claim asserted
and any Losses and Expenses incurred in connection with any claim asserted on
or after the effective date of this Agreement and shall continue until and
terminate upon the later of: (a) ten years after Indemnitee has ceased to
occupy any of the positions or have any of the relationships described in Section 3,
4 or 5 hereof; or (b) one year after the final termination of all pending
or threatened Proceedings of the kind described herein with respect to
Indemnitee. This Agreement shall be binding upon the Company and its successors
and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s
spouse, assigns, heirs, devisee, executors, administrators or other legal
representatives.

 

15.                               Maintenance of
D&O Insurance.

 

(a)                                 The Company
hereby covenants and agrees with Indemnitee that, so long as Indemnitee shall
continue to serve as a Director or an Officer of the Company and thereafter so
long as Indemnitee shall be subject to any possible claim or threatened,
pending or completed Proceeding, whether civil, criminal or investigative, by
reason of the fact that Indemnitee was a Director or an Officer of the Company
or any other entity which Indemnitee was serving at the request of the Company,
the Company shall maintain in full force and effect (i) the directors’ and
officers’ liability insurance issued by the insurer and having the policy
amount and deductible as currently in effect with respect to directors and
officers of the Company or any of its subsidiaries and (ii) any
replacement or substitute policies issued by one or more reputable insurers
providing in all respects coverage at least comparable to and in the same
amount as that currently provided under such existing policy (collectively, “D&O
Insurance”).

 

(b)                                 In all policies
of D&O Insurance, Indemnitee shall be named as an insured in such a
manner as to provide Indemnitee the same rights and benefits, subject to the
same limitations, as are accorded to the Company’s directors or officers most
favorably insured by such policy.

 

(c)                                  Notwithstanding
anything to the contrary set forth in (a) above, the Company shall have no
obligation to maintain D&O Insurance if the Company determines in good
faith that such insurance is not reasonably available, the premium cost for
such insurance is disproportionate to the amount of coverage provided or the
coverage provided by such insurance is limited by exclusions so as to provide
an insufficient benefit.

 

(d)                                 If the Company
ceases to maintain D&O Insurance, the Company shall notify Indemnitee in
writing of such cessation within three (3) calendar days of the earlier of
(i) the date the Company determines to cease D&O Insurance or (ii) the
date D&O Insurance ceases.

 

16.                               Severability. Should any
part, term or condition hereof be declared illegal or unenforceable or in
conflict with any other law, the validity of the remaining portions or
provisions

 

7

 

hereof
shall not be affected thereby, and the illegal or unenforceable portions hereof
shall be and hereby are redrafted to conform with applicable law, while leaving
the remaining portions hereof intact.

 

17.                               Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document.

 

18.                               Headings. Section headings
are for convenience only and do not control or affect meaning or interpretation
of any terms or provisions hereof.

 

19.                               Modification
and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto.

 

20.                               No Duplicative
Payment. The Company shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent that
Indemnitee has otherwise actually received such payment (net of Expenses
incurred in collecting such payment) under any insurance policy, contract,
agreement or otherwise.

 

21.                               Notices. All notices,
requests, demands and other communications provided for by this Agreement shall
be in writing (including telecopier or similar writing) and shall be deemed to
have been given at the time when mailed, enclosed in a registered or certified
postpaid envelope, in any general or branch office of the United States Postal
Service, or sent by Federal Express or other similar overnight courier service,
addressed to the address of the parties stated below or to such changed address
as such party may have fixed by notice or, if given by telecopier, when such
telecopy is transmitted and the appropriate answer back is received.

 

(a)                                 If to
Indemnitee, to the address appearing on the signature page hereof.

 

(b)                                 If to the
Company, to:

 

United
Stationers Inc.

2200 East Golf Road

Des Plaines, Illinois  60016-1267

Attention: General Counsel

 

22.                               Governing Law. The parties
agree that this Agreement shall be governed by, and construed and enforced in
accordance with, the internal laws of the State of Delaware without regard to
its conflicts of law rules.

 

23.                               Construction.  The parties acknowledge that this Agreement
is the result of arm’s-length negotiations between sophisticated parties each
afforded representation by legal counsel. 
Each and every provision of this Agreement shall be construed as though
both parties participated equally in the drafting of same, and any rule of
construction that a document shall be construed against the drafting party
shall not be applicable to this Agreement.

 

24.                               Entire
Agreement. Subject to the provisions of Section 13
hereof, this Agreement constitutes the entire understanding between the parties
and supersedes all proposals,

 

8

 

commitments, writings, negotiations and understandings, oral and
written, and all other communications between the parties relating to the
subject matter hereof. This Agreement may not be amended or otherwise modified
except in writing duly executed by all of the parties. A waiver by any party of
any breach or violation of this Agreement shall not be deemed or construed as a
waiver of any subsequent breach or violation thereof.

 

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

 

	
   

  	
  UNITED STATIONERS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard W. Gochnauer

  
	
   

  	
  Name: Richard W. Gochnauer

  
	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ P. Cody Phipps

  
	
   

  	
   

  
	
   

  	
  Name:
  P. Cody Phipps

  
	
   

  	
  Address:

  
	
   

  	
  City
  and State:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  For
  the purposes of Section 9 only,

  
	
   

  	
   

  
	
   

  	
  UNITED
  STATIONERS SUPPLY CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard W. Gochnauer

  
	
   

  	
  Name: Richard W. Gochnauer

  
	
   

  	
  Title: President and Chief Executive Officer

  

 

9

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