XXXXXXXXX & COMPANY, INC.
April 29, 2002
Page 1
SCHEDULE A
XXXXXXXXX & COMPANY, INC.
00000 Xxxxx Xxxxxx Xxxxxxxxx, x0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Ladies and Gentlemen:
This letter agreement is entered into pursuant to, and in order to induce
Jefferies and Co Inc. ("Jefferies or the Placement Agent) to enter into the
engagement letter dated April 29, 2002 (as amended from time to time in
accordance with the terms thereof, the "Agreement"), between Floor Decor, Inc.
the Company, a Delaware Corporation and Jefferies. Unless otherwise noted, all
capitalized terms used herein shall have the meaning set forth in the Agreement.
Since Jefferies will be acting on behalf of the Company in connections with the
transactions contemplated by the Agreement, and as part of the consideration for
the agreement of Jefferies to furnish its services pursuant to such Agreement,
the company agrees to indemnify and hold harmless Jefferies and its affiliates
and the respective officers, directors, partners, counsel, employees and agents,
and any other persons controlling Jefferies or any of its affiliates within the
meaning of either Section 15 of the Securities Act 1933 or Section 20 Securities
Exchange Act of 1934, and the respective agents, employees, officers, directors,
partners, counsel and shareholders of such persons (Jefferies and each such
other person being referred to as an "Indemnified
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Person"), to the fullest extent lawful, from and against all claims,
liabilities, losses, damages and expenses (or actions in respect thereof ) as
incurred related to or arising out of or in connection with (i) actions taken or
omitted to be taken by the Company, its affiliates, employees or agents, (ii)
actions taken or omitted to be taken by any indemnified Person (including acts
or omissions constituting ordinary negligence) pursuant to the terms of or in
connection with services rendered pursuant to, the agreement or any Transaction
or proposed transaction contemplated thereby or any Indemnified persons role in
connection therewith provided, however, that the Company shall not be
responsible for any losses, claims, damages, liabilities or expenses of any
Indemnified Person to the extent, and only to the extent that it is finally
judicially determined that they result solely from actions taken or omitted to
be taken by such Indemnified Person in bad faith or to be due solely to such
indemnified persons gross negligence, and/or (iii) any untrue statement or
alleged untrue statement of a material fact contained in any of the Information,
the Offering Material, or in any amendment or supplement thereto, or arising out
of or based upon any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statement therein not misleading
The Company shall not settle or compromise or consent to the entry of any
judgment in or otherwise seek to terminate any pending or threatened action,
claim, suit, or proceeding in which any Indemnified Person is or could be a
party and as to which indemnification or contribution could have been sought by
such Indemnified person hereunder (whether or not such Indemnified Person is a
party thereto), unless such Indemnified person has given its prior written
consent or the settlement, compromise, consent or termination includes an
express unconditional release of such Indemnified Person, satisfactory in form
and substance to such Indemnified Person, from all losses, claims, damages or
liabilities arising out of such action, claim, suit, or proceeding.
If for any reason (other than the bad faith or gross negligence of an
Indemnified Person as provided above) the foregoing indemnity is unavailable to
an Indemnified Person or insufficient to hold an Indemnified Person harmless,
then the Company, to the fullest extent permitted by law, shall contribute to
the amount paid or payable by such Indemnified Person as a result of such claim,
liabilities, losses, damages or expenses in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by
Jefferies on the other from the Transaction or proposed transaction under the
Agreement or, if allocation on that basis is not permitted under applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
received by the Company on the one hand and Jefferies on the other, but also the
relative fault of the Company and Jefferies, as well as any relevant equitable
considerations. Notwithstanding the provisions hereof, the aggregate
contribution of all indemnified persons to all claims, liabilities, losses,
damages and expenses shall not exceed the amount of fees actually received by
Jefferies pursuant to the Agreement with respect to the transaction. It is
hereby further agreed that the relative benefits to the Company on the one hand
and Jefferies on the other with respect to any Transaction or proposed
transaction contemplated by the agreement shall be deemed to be in the same
proportion as (i) the total value paid or contemplated to be paid or received or
contemplated to be received by the Company or the Company's shareholders as the
case may be, in the transaction or transactions that are within the scope of the
Agreement, whether or not any such transaction is consummated, bears to: (ii)
the fees paid to Jefferies with respect to such Transaction. The relative fault
of the Company on the one hand and Jefferies on the other with respect to the
Transaction shall he determined by reference to among other things, whether any
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or by Jefferies and the parties relative intent, knowledge, access to
information and opportunity to correct to prevent such statement or omission.
No Indemnified Person shall have any liability to the Company or any officer,
director, employee or affiliate thereof in connection with the services rendered
pursuant to the agreement except for any liability for claims, liabilities,
losses or damages finally judicially determined to have resulted solely from
actions taken or omitted to be taken by such Indemnified Person in bad faith or
solely as a result of such Indemnified Person's gross negligence.
In addition, the Company shall reimburse the Indemnified Persons for all
expenses (including,
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without limitation, fees and expenses of counsel) a they are incurred in
connection with investigating , preparing, defending or settling any such action
or claim, whether or not in connection with litigation in which any Indemnified
Person is a named party. If any of Jefferies personnel appears as Witnesses, are
deposed or are otherwise involved in the defense of any action against
Jefferies, the Company or the Company's officers or directors, the Company shall
pay Jefferies (i) with respect to each day that one of Jefferies professional
personnel appears as a witness or is deposed and/or (ii) with respect to each
day that one of Jefferies professional personnel is involved in the preparation
therefor, (a) a fee of $2,00 per day for each such person with respect to each
appearance as a witness or for a deposition and (b) at a rate of $200 per hour
with respect to each hour of preparation for any such appearance and the Company
will reimburse Jefferies for all reasonable expenses incurred by Jefferies by
reason of any of its personnel being involved in any such action.
The indemnity, contribution and expense reimbursement obligations set forth
herein (i) shall be in addition to any liability the Company may have to any
indemnified person at common law or otherwise, (ii) shall survive the expiration
of the term (iii) shall apply to any modification of Jefferies' engagement and
shall remain in full force an effect following the completion or termination of
the Agreement, (iv) shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of Jefferies or any other
Indemnified Person and (v) shall be binding on any successor or assign of the
Company and successors or assigns to the Company's business and assets.
Please sign and return an original and one copy of this letter to the
undersigned to indicate your acceptance of the terms set forth herein, whereupon
this letter and your acceptance shall constitute a binding agreement between the
Company and Jefferies as of the date of the Agreement.
Sincerely
FLOOR DECOR INC.
XX Xxxxxx
President
Accepted and Agreed
XXXXXXXXX & COMPANY, INC.
Xxxxxxxx Xxxxxx
Executive Vice President
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