Exhibit 10.2
BACK-UP INDEMNIFICATION
AGREEMENT
BACK-UP INDEMNIFICATION AGREEMENT,
dated as of August 19, 2005 (this “Agreement”), among
Wicks Communications & Media Partners, L.P., a Delaware limited
partnership (the “Fund”), Wicks Parallel (Limited)
Partnership I, L.P. (the “Parallel Fund”), Gary Facente
2005 Irrevocable Trust (the “Trust”), David Cruise,
Steven Korte (each such party being herein referred to individually
as a “Party” and collectively as the
“Parties”), and School Specialty, Inc., a Wisconsin
corporation (“Buyer”). Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to such
terms in the Acquisition Agreement (as defined below).
WHEREAS, each of the Parties is a
member of Wicks Learning Group, LLC, a Delaware limited liability
company (“Seller”);
WHEREAS, Buyer and Seller are
entering into an Acquisition Agreement, dated as of even date
herewith (the “Acquisition Agreement”), pursuant to
which (i) Buyer is to purchase all of the Membership Interests of
Delta Education, LLC, a Delaware limited liability company, and
(ii) Seller is entering into certain indemnification obligations in
favor of Buyer, as set forth in Article 7 thereof; and
WHEREAS, the Parties will be
distributed proceeds from the sale contemplated by the Acquisition
Agreement.
NOW, THEREFORE, the parties hereto
agree as follows:
1. Each of the Parties agrees,
subject to the terms, conditions and limitations set forth in this
Agreement, that, if and only if the Closing under the Acquisition
Agreement occurs pursuant to the terms thereof, such Party shall
severally and not jointly indemnify the Buyer for its respective
Percentage Share (as herein defined) of such indemnification
liabilities as Seller would have had under Section 7.1(b) of the
Acquisition Agreement, after giving effect to all the provisions of
and limitations set forth in Article 7 of the Acquisition
Agreement, but only to the extent that all such liabilities would
have exceeded the Cap then in effect pursuant to Section 7.3 of the
Acquisition Agreement (for example, prior to the expiration of the
First Period (as defined in the Escrow Agreement), as if the
original Cap set forth in Section 7.3(b) of the Acquisition
Agreement had been $25,000,000 in lieu of $15,000,000), it being
further agreed and understood that the maximum aggregate of all
liabilities whatsoever under or arising out of this Agreement for
all of the Parties taken together shall not under any circumstances
exceed $10,000,000, and the maximum aggregate of all liabilities
whatsoever of any Party under or arising out of this Agreement
shall not exceed the product of $10,000,000 multiplied by such
Party’s respective Percentage Share. Each Party’s
respective Percentage Share is the percentage set forth opposite
such Persons name on Schedule A hereto.
2. In the event any claim is made
against any one or more Parties under this Agreement, such Party or
Parties shall have all the rights and benefits of the provisions of
Article 7 of the Acquisition Agreement inuring to the benefit of
any Indemnifying Party under Article 7 of the Acquisition Agreement
(including but not limited to any rights as to notice of any
claim(s) and/or defense or settlement with respect thereto under
Section 7.2 thereof) as if such Party or
Parties is or are the Indemnifying Party under
said Section 7.2; provided that, if such claim is made against the
Fund and any one or more other Indemnifying Parties, then, at its
option, the Fund shall be entitled to exercise exclusively and at
its sole discretion all such rights contemplated by Article 7 of
the Acquisition Agreement or this Section 2. Without limiting the
generality of the foregoing, as among the Parties, all
determinations by the Fund as to whether and/or how to defend or
settle (i) any claim covered by Article 7 of the Acquisition
Agreement and/or the terms of any such settlement and/or (ii) any
claim against any of the Parties under this Agreement, and all such
determinations shall be final and binding upon each of the Parties,
and each of the Parties shall cooperate in all respects with the
Fund in order to facilitate and/or make effective any such defense,
settlement and/or determination. The preceding sentence is solely
for the benefit of the Fund and not Buyer, and does not and shall
not give rise to any right or benefit to or in favor of
Buyer.
3. Anything to the contrary
contained in this Agreement notwithstanding:
(a) In no event shall any Party have
any liability or obligation under this Agreement in respect of any
claim under this Agreement or the Acquisition Agreement, (i) to the
extent Seller would not have had any liability under
