EXHIBIT 10.23
TAX INDEMNITY AGREEMENT
TAX INDEMNITY AGREEMENT dated as of March 20, 1997 by and between GREAT
AMERICAN MANAGEMENT AND INVESTMENT, INC., a Delaware corporation ("GAMI"), EAGLE
INDUSTRIAL PRODUCTS CORPORATION, a Delaware corporation ("EIPC"), EAGLE
INDUSTRIES, INC., a Delaware corporation ("Eagle") (GAMI, EIPC and Eagle are
referred to as the "Indemnifying Parties," and each as an "Indemnifying Party"),
and FALCON BUILDING PRODUCTS, INC., a Delaware corporation ("Falcon"), XXXX &
XXXXXX, INC., a Delaware corporation ("HCI"), MANSFIELD PLUMBING PRODUCTS INC.,
a Delaware corporation ("MPP"), and DEVILBISS AIR POWER, INC., a Delaware
corporation ("DAP") (Falcon, HCI, MPP and DAP are referred to as the
"Indemnified Companies," and each as an "Indemnified Company").
WHEREAS, the Indemnified Companies were included in GAMI's consolidated
federal income tax returns prior to Falcon's initial public offering on
November 9, 1994;
WHEREAS, pursuant to the terms of the GAMI-Falcon Disaffiliation Tax
Sharing Agreement dated October 28, 1994, between Falcon and GAMI (the "Tax
Sharing Agreement"), Falcon shall compute and pay to GAMI its share of GAMI's
liability for U.S. federal income taxes for all periods in which Falcon was
included in GAMI's tax returns as if Falcon had filed a separate U.S. federal
income tax return.
NOW, THEREFORE, in consideration of the covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. INDEMNIFICATION.
1.1. INDEMNITY. Each Indemnifying Party, jointly and severally,
agrees to indemnify each of the Indemnified Companies and each of their
respective directors, officers, employees, affiliates, subsidiaries and their
subsidiaries and affiliates (collectively, the "Indemnified Company Affiliates")
(the Indemnified Companies and their respective Indemnified Company Affiliates
are referred to herein as the "Indemnified Parties" and each as an "Indemnified
Party") against, and agrees to hold each Indemnified Party harmless from, any
and all U.S. federal (and applicable state and local) income taxes, debts,
claims, obligations, liabilities, losses, costs, damages, penalties or expenses
(including without limitation reasonable attorneys' fees and expenses and costs
of investigation, litigation and settlement) (collectively, "Losses") suffered
by any Indemnified Party directly or indirectly arising out of, based upon or
resulting from the Tax Sharing Agreement or such Indemnified Party's inclusion
in GAMI's consolidated, combined, affiliated or unitary tax returns for any
period. However, there shall be no double recovery hereunder as to a particular
Loss by virtue of there being multiple Indemnified Parties.
1.2. NOTICE OF CLAIMS; ASSUMPTION OF DEFENSE. Each Indemnified
Party shall give prompt notice to GAMI (which will act as representative of
the Indemnifying Parties for purposes of this Agreement), in accordance with
the terms of SECTION 2.2, of the assertion of any claim, or the commencement
of any suit, action or proceeding by any party, in respect of which indemnity
may be sought hereunder, giving GAMI such information with respect thereto as
GAMI may reasonably request (but the giving of such notice shall not be a
condition precedent to indemnification hereunder). The Indemnifying Parties
shall, at their own expense, assume the defense thereof; provided that (i)
counsel is reasonably satisfactory to the Indemnified Party, and (ii) GAMI,
on behalf of itself and the other Indemnifying Parties, shall thereafter
consult with the Indemnified Party upon reasonable request for such
consultation from time to time with respect to such claim, suit, action or
proceeding. The Indemnified Party shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at their own
expense, separate from the counsel employed by GAMI.
1.3. SETTLEMENT OR COMPROMISE. GAMI shall not settle or compromise
any claim, suit, action or proceeding without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld.
1.4. FAILURE OF INDEMNIFYING PARTY TO ACT. In the event that any
Indemnifying Party does not elect to assume the defense of any claim, suit,
action or proceeding, then any failure of such Indemnified Party to defend or to
participate in the defense of any such claim, suit, action or proceeding, or to
cause the same to be done, shall not relieve any Indemnifying Party of its
obligations hereunder.
2. MISCELLANEOUS PROVISIONS.
2.1. WAIVER AND AMENDMENT. The failure of any party hereto to comply
with any of the obligations or agreements set forth herein or to fulfill any
condition set forth herein may be waived only by written instrument signed by
all of the parties hereto. No failure by any party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver of such right
hereunder by any party hereto or preclude any other future exercise of that
right or any other right hereunder by such party. This Agreement may be amended
or modified only by a written instrument signed by all of the parties hereto.
2.2. NOTICES. All notices, requests or other communications required
or permitted hereunder shall be in writing and shall be deemed given (i) when
received if delivered by hand, (ii) on the date of transmission if sent by
telex, telecopy or other wire transmission (receipt confirmed), (iii) one day
after being sent by reputable overnight courier or (iv) five days after being
deposited in the U.S. mail, registered or certified mail, return receipt
requested, postage prepaid, in each case to the party to receive the same at
such party's respective address set forth below, or at such other address as may
from time to time be designated by such party to the other parties hereto in
accordance with this Section 2.2:
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If to an Indemnifying Party, to:
Great American Management and Investment, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxxxx & Xxxxxxxxxxx
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
If to Falcon:
Falcon Building Products, Inc.
Two Xxxxx Xxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxx, Esq.
Fax: (000) 000-0000
With a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
2.3. NO CREATION OF RIGHTS IN THIRD PARTIES. Nothing in this
Agreement, express or implied, is intended or shall be construed to confer upon
or give to any person, firm or corporation other than the parties hereto and
their successors and assigns any remedy or claim under or by reason of this
Agreement or any term, covenant or condition hereof, and all the terms,
covenants and conditions in this Agreement shall be for the sole and exclusive
benefit of the parties hereto and their successors and assigns.
2.4. CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
used herein are for convenience only and are not a part of this Agreement and
shall not be used in construing it.
2.5. ENTIRE AGREEMENT. This Agreement embodies the entire
understanding of the parties hereto with respect to the subject matter hereof,
and there are no other agreements
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or understandings, written or oral, in effect between the parties hereto
with respect to the subject matter hereof. This Agreement supersedes and
terminates all prior discussions, negotiations, understandings, arrangements
and agreements among the parties hereto relating to the subject matter hereof.
2.6. COUNTERPARTS. This Agreement may be executed in any number of
duplicate counterparts, each of which shall be deemed an original and all of
which together constitute one and the same instrument.
2.7. ASSIGNABILITY. This Agreement and the provisions hereof shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto. No party may assign this Agreement without the prior
written consent of the other parties hereto. Any attempted assignment of this
Agreement without such prior written consent shall be void as to the other party
to this Agreement.
2.8. GOVERNING LAW. The validity, construction, operation and effect
of the terms of this Agreement shall be determined and enforced in accordance
with the laws of the State of Illinois without giving effect to principles of
conflicts of law thereunder.
2.9. EFFECTIVE TIME. This Agreement shall become effective at the
Effective Time, as if in effect from the signing of the Agreement and Plan of
Merger between Falcon Building Products, Inc. and FBP Acquisition Corp., Inc.,
dated March 20, 1997.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
signed on its behalf by a duly authorized officer as of the 20th day of March,
1997.
GREAT AMERICAN MANAGEMENT AND INVESTMENT, INC.
By: /s/ Xxx Xxxxxxxx
-----------------------
Name: Xxx Xxxxxxxx
Title: President
FALCON BUILDING PRODUCTS, INC.
By: /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: Senior Vice-President
EAGLE INDUSTRIES, INC.
By: /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: Senior Vice-President
EAGLE INDUSTRIAL PRODUCTS CORPORATION
By: /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: Senior Vice-President
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MANSFIELD PLUMBING PRODUCTS, INC.
By: /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: Vice-President
DEVILBISS AIR POWER, INC.
By: /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: Vice-President
XXXX & XXXXXX, INC.
By: /s/ Xxx X. Xxxxx
-----------------------
Name: Xxx X. Xxxxx
Title: Vice-President
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