INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT (this "Agreement"), dated November 3, 1997
and effective as of October 14, 1997, is by and among Blackstone Capital
Partners III Merchant Banking Fund L.P., a Delaware limited partnership ("BCP
III"), Blackstone Offshore Capital Partners III L.P., a Delaware limited
partnership ("BOCP III"), Blackstone Family Investment Partnership III L.P., a
Delaware limited partnership ("BFIP III", and together with BCP III and BOCP
III, collectively, the "Funds"), Imperial Home Decor Holdings LLC, a Delaware
limited liability company ("LLC"), and BDPI Holdings Corporation, a Delaware
corporation ("MergerCo").
RECITALS
A. This Agreement is entered into in connection with the Recapitalization
Agreement (the "Recapitalization Agreement"), dated as of October 14, 1997,
among Xxxxxx, Inc., a New Jersey corporation ("Xxxxxx"), Xxxxxx Decorative
Products Holdings, Inc. ("BDPH"), a Delaware corporation and an indirect wholly
owned subsidiary of Xxxxxx, and MergerCo and the Acquisition Agreement (the
"Acquisition Agreement"), dated as of November 3, 1997, among Xxxxxxx & Xxxxxx
Products Co., a Delaware corporation, Imperial Wallcoverings, Inc., a Delaware
corporation, and MergerCo;
B. Pursuant to the Recapitalization Agreement Merger Co will be merged (the
"Merger") with and into BDPH in a recapitalization transaction resulting in LLC
becoming the owner of 89% of the equity of BDPH; and
C. In the Merger BDPH's name will be changed to The Imperial Home Decor
Group, Inc. (such successor to MergerCo and BDPH, "IHDG").
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein and other good, valuable and sufficient
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the parties hereby agrees as follows:
1. Definitions. As used in this Agreement, the following terms have the
meanings set forth or referenced below. Capitalized terms used in this Agreement
but not defined in this Agreement have the meanings ascribed thereto in the
Recapitalization Agreement.
(a) "Indemnified Party" means, collectively, the Funds, each other entity
sponsoring, sponsored by or affiliated with the general partner of each Fund,
each general or limited partner of each Fund and each director, officer, agent,
representative, employee of any of the foregoing whether for itself or in its
capacity as such.
(b) "Indemnifying Party" means MergerCo and, from and after the Closing
Date, IHDG.
(c) "Losses" means all losses, claims, demands, damages, liabilities,
judgments, settlements and expenses, including any attorneys' fees, expenses and
costs, and any actions or proceedings in respect thereof threatened or asserted
by any person or entity, including without limitation by any governmental
authority or by or in the right of MergerCo, BDPH or IHDG, of any kind, relating
to, resulting from or arising out of any actual or alleged breach or violation
of contract, tort or violation of law, or any liability or obligation of
MergerCo, BDPH or IHDG, or any subsidiary or affiliate of either of them,
regardless of (i) any actual or alleged participation by any Indemnified Party
therein or conduct (including without limitation conduct alleged to be
intentional, reckless or negligent) by any Indemnified Party in connection
therewith and (ii) any independent legal or statutory basis for the imposition
of liability on any Indemnified Party in connection with any such violation or
breach, it being the intention of the parties that no Indemnified Party suffer
any loss or incur any liability or cost by reason of such breach or violation.
Notwithstanding the foregoing, any loss or diminution in value of his, her or
its investment in MergerCo or IHDG, in and of itself, will not constitute a
"loss" under this Agreement.
2. Indemnification. The Indemnifying Party will indemnify, defend and hold
harmless the Indemnified Parties, and advance expenses therefor, from and
against any and all Losses. Notwithstanding the foregoing, no Indemnified Party
will be entitled to indemnification hereunder, and any expenses advanced shall
be returned to the Indemnifying Party, for any Losses that are determined by
final and nonappealable judgment of a court of competent jurisdiction to have
resulted primarily from actual fraud that resulted in the Indemnified Party in
fact receiving a financial benefit to which the Indemnified Party was not
legally entitled.
3. Certain Procedures. (a) After receipt by an Indemnified Party of notice
of any complaint or the commencement of any action or proceeding with respect to
which indemnification is being sought hereunder, such person will promptly
notify the Indemnifying Party in writing of such complaint or of the
commencement of such action or proceeding, but failure so to notify the
Indemnifying Party will not relieve it from any liability which it may have
hereunder. If the Indemnifying Party is requested by such Indemnified Party, the
Indemnifying Party will assume the defense of such action or proceeding,
including the employment of counsel reasonably satisfactory to the Fund and the
payment of the fees and disbursements of such counsel. In any action or
proceeding the defense of which the Indemnifying Party assumes, the Indemnified
Party will have the right to participate in such litigation. The Indemnifying
Party further agrees that it will not, without the prior written consent of the
Fund, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the Fund
or any other Indemnified Party is an actual or potential party to such claim,
action, suit or proceeding) unless such settlement, compromise or consent
includes an unconditional release of the Fund and each other Indemnified Party
hereunder from all liability arising out of such claim, action, suit or
proceeding.
(b) If any indemnification sought by an Indemnified Party pursuant to this
Agreement is held by a court to be unavailable for any reason, then (whether or
not the Fund is the Indemnified
Party) the Indemnifying Party will contribute to the Losses for which such
Indemnified Party is liable to the fullest extent lawful.
(c) The Indemnifying Party will promptly advance or reimburse any
Indemnified Party hereunder for all documented expenses (including fees and
disbursements of counsel) as they are incurred in connection with investigating,
preparing for or defending, or providing evidence in, any pending or threatened
action, claim, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not any Indemnified Party is a
party) and in enforcing this Agreement.
(d) The Indemnifying Party's indemnity, contribution, reimbursement and
other obligations under this Agreement are in addition to any liability that the
Indemnifying Party may otherwise have, at common law or otherwise, and shall be
binding on its successors and assigns.
3. Consent to Personal Jurisdiction. Solely for the purpose of enforcing
this Agreement, the Indemnifying Party hereby consents to personal jurisdiction,
service and venue in any court in which any claim or proceeding which is subject
to, or which may give rise to a claim for indemnification or contribution under,
this Agreement is brought against any Indemnified Party.
4. Governing Law. The provisions of this Agreement will be in addition to
any liability the Indemnifying Party may otherwise have to the Indemnified Party
and will not be limited by any rights that any Indemnified Party may otherwise
have. This Agreement will be deemed made in New York. This Agreement and all
controversies arising from or relating to performance under this Agreement will
be governed by and construed in accordance with the laws of the State of New
York, without giving effect to such state's rules concerning conflict of laws.
ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR ACTION ARISING OUT OF
THIS AGREEMENT IS HEREBY WAIVED.
5. Notices. All communications provided for hereunder shall be in writing
and shall be deemed to be given when delivered in person or by private courier
with receipt, when telefaxed and received (receipt electronically confirmed by
Sender's telecopy machine), or five days after being deposited in the United
States mail, first-class, registered or certified, return receipt requested,
with postage paid and,
If to MergerCo, the Funds or LLC:
c/o The Blackstone Group
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxxx
Senior Managing Director
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Fax: (000) 000-0000
or to such other address as any such party shall designate by written notice to
the other parties hereto.
6. Non-Assignability. This Agreement shall inure to the benefit of and be
binding on the parties hereto and their respective successors and permitted
assigns. This Agreement shall not be assigned by any party hereto without the
express prior written consent of the other parties, and any attempted
assignment, without such consents, shall be null and void; provided, however,
that (i) any Indemnified Party may assign its rights hereunder to any affiliate
thereof and (ii) any Indemnified Party may assign its rights hereunder (or any
portion thereof) in connection with a sale or other transfer of its direct or
indirect ownership interest in IHDG.
7. Amendment; Waiver. This Agreement may be amended, supplemented or
otherwise modified only by a written instrument executed by the parties hereto.
No waiver by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants, or agreements
contained herein. The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach.
8. Third Parties. Except as provided in Section 6 (to the extent
contemplated thereby) hereof and except as contemplated in the definition of
Indemnfied Party or Indemnifying Party, this Agreement does not create any
rights, claims or benefits inuring to any person that is not a party hereto nor
create or establish any third party beneficiary hereto.
9. Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rule
of strict construction will be applied against any party. Any references to any
federal, state, local or foreign statute or law will also refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
Unless the context otherwise requires: (a) a term has the meaning assigned to it
by this Agreement; (b) "or" is disjunctive but not exclusive; (c) words in the
singular include the plural, and in the plural include the singular; and (d)
provisions apply to successive events and transaction.
10. Specific Performance. Without limiting or waiving in any respect any
rights or remedies of MergerCo under this Agreement now or hereinafter existing
at law or in equity or by
statute, each of the parties hereto shall be entitled to seek specific
performance of the obligations to be performed by the other in accordance with
the provisions of this Agreement.
11. Entire Agreement. This Agreement sets forth the entire understanding of
the parties hereto and no modifications or amendments to this Agreement shall be
binding on the parties unless in writing and signed by the party or parties
unless in writing and signed by the party or parties to be bound by such
modification or amendment.
12. Severability. If any provision of this Agreement shall be declared by
any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement shall not be affected and shall remain in
full force and effect.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
BDPI HOLDINGS CORPORATION
By: ___________________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS III MERCHANT
BANKING FUND, L.P.
By: BLACKSTONE MANAGEMENT ASSOCIATES III
L.L.C., its general partner
By: ___________________________________
Name:
Title:
BLACKSTONE OFFSHORE CAPITAL PARTNERS III, L.P.
By: BLACKSTONE MANAGEMENT ASSOCIATES III
L.L.C., its general partner
By: ___________________________________
Name:
Title:
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP III, L.P.
By: BLACKSTONE MANAGEMENT ASSOCIATES III
L.L.C., its general partner
By: ___________________________________
Name:
Title:
IMPERIAL HOME DECOR GROUP HOLDINGS LLC
By: ___________________________________
Name:
Title:
