EXHIBIT 10.7
INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT, dated as of October 18, 1996, among GAF
Corporation, a Delaware corporation (including its successors "GAF"), G-I
Holdings Inc., a Delaware corporation (including its successors "G-I Holdings"),
G Industries Corp., a Delaware corporation (including its successors "G
Industries"), GAF Chemicals Corporation, a Delaware corporation (including its
successors "GCC"), and ISP Holdings Inc., a Delaware corporation (including its
successors "ISP Holdings").
W I T N E S S E T H
WHEREAS, GAF intends to effect a series of transactions (the "Spin Off
Transactions") involving its subsidiaries and certain assets of its subsidiaries
that will result, among other things, in the capital stock of ISP Holdings being
distributed to the stockholders of GAF;
WHEREAS, the principal components of the Spin Off Transactions and the
conditions to the effectiveness thereof are described in that certain Offering
Memorandum of ISP Holdings dated October 15, 1996 (the "Offering Memorandum" and
capitalized terms used herein not otherwise defined herein having the meanings
assigned to them therein) relating to ISP Holdings' 9% Senior Notes due 2003;
WHEREAS, GAF, G-I Holdings, G Industries, GCC, on the one hand, and ISP
Holdings, on the other hand, desire to indemnify and hold the other harmless
with respect to certain liabilities following consummation of the Spin Off
Transactions.
NOW THEREFORE, in consideration of the mutual promises and subject to the
terms and conditions contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 General. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Accrued Tax Liabilities: all Liabilities of ISP Holdings and its
Post Spin Subsidiaries relating to Taxes.
Affiliate: with respect to any specified Person, a Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such specified Person; provided,
however, that for purposes of this Agreement, ISP Holdings and its Post Spin
Subsidiaries shall not be deemed to be Affiliates of any member of the GAF Group
and no member of the GAF Group shall be deemed to be an Affiliate of ISP
Holdings and its Post Spin Subsidiaries.
Asbestos Liabilities: any claim, demand, Liability or obligation,
known or unknown, contingent or otherwise, accrued or unaccrued, for which GAF
or any Affiliate (which solely for purposes of this definition shall include ISP
Holdings, its Post Spin Subsidiaries and their respective Affiliates) thereof is
responsible or alleged to be responsible relating to, directly or indirectly,
the manufacture, sale, distribution, use or installation of asbestos or
asbestos-containing products or materials, whether in respect of personal injury
or property damage and all investigative and defense costs related thereto
whether or not reimbursable by insurance.
Claim of Environmental Liability: any claims or demands asserted,
and any Liabilities, obligations, judgments, costs, penalties, expenses or
damages known or unknown, disputed or undisputed, relating to, resulting from or
arising from, directly or indirectly, any of the following matters for which any
member of the GAF Group is liable or responsible: (a) any suit, action,
administrative proceeding, notice, investigation or demand asserted or
threatened by any third party, including any Governmental Authority, arising
under or relating, directly or indirectly, to any Environmental Law; (b)
requirements imposed by any Environmental Law, including costs of remediation,
restoration or costs incurred in complying with Environmental Laws; or (c)
personal injury, bodily injury or property damage as a result of the presence or
Release of Hazardous Substances; and all investigative and defense costs related
thereto whether or not reimbursable by insurance.
Environmental Law: any and all statutes, ordinances, rules,
regulations, orders, directives or requirements of any Governmental Authority
which regulate or govern or are related to Hazardous Substances in any way.
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Environmental Matter: matters or circumstances relating to, directly
or indirectly, any actual or potential Claim of Environmental Liability.
GAF Group: means GAF, its Post Spin Subsidiaries and their
respective Affiliates.
GAF Liabilities: all of the Liabilities of the GAF Group (other than
the Spin Off Tax Liabilities), including Asbestos Liabilities, Environmental
Matters, Plan Liabilities, Litigation Matters and Liabilities for Taxes of the
GAF Group, whether arising before, during or after the Spin Off Transactions.
GAF Plan: any bonus, deferred compensation, incentive compensation,
savings, stock purchase, pension, profit sharing or retirement plan, or any
similar plan, program or arrangement, whether formal or informal and whether
legally binding or not, maintained or contributed to by any member of the GAF
Group.
Governmental Authority: any nation, government or legislature or any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory, taxation or administrative
functions of or pertaining to government.
Hazardous Substance: any element, compound, mixture, substance,
toxic substance, hazardous substance, hazardous materials, toxic waste,
hazardous waste, pollutant or contaminant including, without limitation,
asbestos and asbestos-containing products, as defined or regulated by:
Environmental Laws, including without limitation, the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42 U.S.C.
Section 9601 et seq., (CERCLA), the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq., (RCRA), the Clean Air Act, as amended,
42 U.S.C. Section 7401 et seq., (CAA), the Emergency Planning and Community
Right to Know Act, as amended, 42 U.S.C. Section 11001 et seq., (EPCRKA), the
Safe Drinking Water Act, as amended, 42 U.S.C. Section 300 et seq. (SDWA), the
Pollution Prevention Act of 1990, as amended, 42 U.S.C. Section 13101 et seq.
(PPA), the Clean Water Act, as amended, 33 U.S.C. Section 1251 et seq. (CWA),
the Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C.
Section 136 et seq. (FIFRA), the Toxic Substances Control Act, as amended, 15
U.S.C. Section 2601 et seq., (TSCA), and all state and local statutes, laws, or
ordinances corresponding
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to the foregoing federal statutes, or relating to any environmental matter,
together with any amendments to any of the foregoing state, local and federal
statutes, laws, ordinances, all regulations promulgated under the foregoing
state, local and federal statutes, laws or ordinances, all substitutions of the
foregoing state, local and federal statutes, laws or ordinances, as well as
words of similar connotation, import or meaning referred to in any other
federal, state or local statutes, law, ordinance, rule or regulation concerning
the environment.
Indemnifiable Losses: with respect to any claim by an Indemnitee for
indemnification pursuant to Article II, any and all losses, liabilities,
damages, claims, demands, judgments or settlements of any nature or kind, known
or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated,
including all reasonable costs and expenses (legal, accounting or otherwise as
such costs are incurred) relating thereto, suffered by such Indemnitee with
respect to such claim.
Indemnifying Party: a Person who or which is obligated under this
Agreement to provide indemnification.
Indemnitee: a Person who may seek indemnification under this
Agreement.
ISP: International Specialty Products Inc., a Delaware corporation.
ISP Holdings Liabilities: (i) all Liabilities of ISP and its
Subsidiaries, (ii) all Liabilities relating to the Senior Notes, the Series B
Notes, the Exchange Offer Notes and any exchange notes issued by ISP Holdings in
exchange for the Exchange Offer Notes, (iii) all other Liabilities reflected in
the pro forma consolidated balance sheet of ISP Holdings or the notes thereto as
set forth in the Offering Memorandum and (iv) the Accrued Tax Liabilities, and
other than, in each case, the GAF Liabilities and the Spin Off Tax Liabilities.
Liabilities: all debts, liabilities, expenses,
costs and obligations of any kind, whether accrued, fixed,
contingent, liquidated, unliquidated, or reflected on a
balance sheet and whenever arising, whether or not covered
by insurance.
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Litigation Matters: all matters relating to claims, actions, suits
or other proceedings, whether at law or in equity, pending at the Spin Off Date
against any member of the GAF Group and all such matters that arise or commence
after the Spin Off Date with respect to actions or omissions by a member of the
GAF Group prior to the Spin Off Date, other than a claim, action, suit or other
proceeding commenced after the Spin Off Date against ISP Holdings, its Post Spin
Subsidiaries or any of their respective Affiliates to the extent relating to an
ISP Holdings Liability.
Person: an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
Plan Liabilities: all Liabilities relating to a GAF Plan. but only
to the extent relating to employees or former employees of the GAF Group.
Post Spin Subsidiaries: with respect to any Person, a Subsidiary of
such Person after giving effect to the Spin Off Transactions.
Release: any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including, without limitation, the movement of Hazardous
Substances through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata.
Representative: with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
counsel or representatives.
Spin Off Date: the date on which the Spin Off Transactions are
effected.
Spin Off Tax Liabilities: any Liability for Taxes (net of any Tax
benefits realized by an Indemnitee) that may be payable with respect to the Spin
Off Transactions.
Subsidiary: with respect to any specified Person, any corporation or
other legal entity of which such Person or any of its Subsidiaries controls or
owns, directly or indirectly, more than 50% of the stock or other equity
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interest entitled to vote on the election of members to the board of directors
or similar governing body.
Tax: all taxes of any kind whatsoever, including federal, state,
local or foreign taxes, levies, imposts, duties, licenses, registration fees and
charges of any nature whatsoever, unemployment taxes and social security taxes,
including interest and penalties thereon.
Third Party Claim: any claim, suit, arbitration inquiry, proceeding
or investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal asserted by a
Person who is not an Indemnitee.
ARTICLE II
EFFECTIVENESS, ASSUMPTION AND INDEMNIFICATION
2.1 Effectiveness and Survival of Agreement. This Agreement shall
only be effective if, and shall have no force and effect unless, the Spin Off
Transactions are consummated. In the event that the Spin Off Transactions are
consummated, all covenants and agreements of the parties contained in this
Agreement shall survive the Spin Off Date.
2.2 Indemnification and Release.
(a) (i) GAF and G-I Holdings shall jointly and severally indemnify,
defend and hold harmless ISP Holdings, its Post Spin Subsidiaries and each of
their respective present and future Representatives and Affiliates from and
against all GAF Liabilities and any and all Indemnifiable Losses of ISP
Holdings, its Post Spin Subsidiaries and each of their respective
Representatives and Affiliates arising out of or due to, directly or indirectly,
the GAF Liabilities, whether such GAF Liabilities arose before, or arise after,
the Spin Off Date.
(ii) GAF, G-I Holdings, G Industries and GCC shall jointly and
severally indemnify, defend and hold harmless ISP Holdings, its Post Spin
Subsidiaries and each of their respective Representatives and Affiliates from
and against all Spin Off Tax Liabilities and any and all Indemnifiable Losses of
ISP Holdings, its Post Spin Subsidiaries and each of their respective
Representatives
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and Affiliates arising out of or due to, directly or indirectly, the Spin Off
Tax Liabilities.
(iii) GAF, G-I Holdings, G Industries and GCC hereby release and
discharge ISP Holdings, its Post Spin Subsidiaries and their respective
Representatives and Affiliates from all Liabilities for which ISP Holdings is
indemnified under Section 2.2(a)(i) or (ii) of this Agreement.
(b) (i) ISP Holdings shall indemnify, defend and hold harmless the
GAF Group and each of their respective Representatives and Affiliates from and
against all ISP Holdings Liabilities and any and all Indemnifiable Losses of the
GAF Group and each of their respective Representatives and Affiliates arising
out of or due to, directly or indirectly, the ISP Holdings Liabilities, whether
such ISP Holdings Liabilities arose before, or arise after, the Spin Off Date.
(ii) ISP Holdings hereby releases and discharges the GAF Group and
each of their Representatives and Affiliates from all Liabilities for which the
GAF Group is indemnified under Section 2.2(b)(i) of this Agreement.
2.3 Procedure for Indemnification.
(a) If an Indemnitee shall receive notice of the assertion of any
Third Party Claim with respect to which an Indemnifying Party may be obligated
under this Agreement to provide indemnification, such Indemnitee shall give such
Indemnifying Party prompt notice thereof after becoming aware of such Third
Party Claim; provided, however, that the failure of any Indemnitee to give
notice as provided in this Section 2.3 shall not relieve any Indemnifying party
of its obligations under this Article II, except to the extent that such
Indemnifying Party is materially prejudiced thereby. Such notice shall describe
the Third Party Claim in reasonable detail, and, if practicable, shall indicate
the estimated amount of the Indemnifiable Loss that has been or may be sustained
by such Indemnitee.
(b) The Indemnifying Party, at such Indemnifying Party's own expense
and through counsel chosen by such Indemnifying Party (which counsel shall be
reasonably satisfactory to the Indemnitee), may elect to defend any Third Party
Claim. If the Indemnifying Party elects to defend a Third Party Claim, it shall,
within 30 Business
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Days after receiving notice of such Third Party Claim (or sooner, if the nature
of such Third Party Claim so requires), notify the Indemnitee of its intent to
do so, and such Indemnitee shall cooperate in the defense of such Third Party
Claim. Such Indemnifying Party shall pay such Indemnitee's reasonable
out-of-pocket expenses incurred in connection with such cooperation. After
notice from an Indemnifying Party to an Indemnitee of its election to assume the
defense of a Third Party Claim, such Indemnifying Party shall not be liable to
such Indemnitee under this Article II for any legal or other expenses
subsequently incurred by such Indemnitee in connection with the defense thereof.
If an Indemnifying Party elects not to defend against a Third Party Claim, or
fails to notify an Indemnitee of its election as provided in this Section 2.3,
such Indemnitee may defend, compromise and settle such Third Party Claim;
provided, however, that no such Indemnitee may compromise or settle any such
Third Party Claim without the prior written consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. Notwithstanding the foregoing,
the Indemnifying Party shall not, without the written consent of the Indemnitee,
which consent shall not be unreasonably withheld, settle or compromise any Third
Party Claim or consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff to the
Indemnitee of a written release from all Liabilities in respect of such Third
Party Claim.
(c) In the event an Indemnitee should have a claim (including any
potential claim) against any Indemnifying Party under this Article II that does
not involve a Third Party Claim, the Indemnitee shall give such Indemnifying
Party prompt notice of such claim; provided, however, that the failure of any
Indemnitee to give notice as provided in this Section 2.3 shall not relieve any
Indemnifying Party of its obligations under this Article II, except to the
extent that such Indemnifying Party is materially prejudiced thereby. Such
notice shall describe the claim (or potential claim) in reasonable detail, and,
if practicable, shall indicate the estimated amount of the Indemnifiable Loss
that has been or may be sustained by such Indemnitee. If the Indemnifying Party
does not notify the Indemnitee within 30 Business Days following its receipt of
such notice that the Indemnifying Party disputes its liability to the Indemnitee
under this Article II, such claim specified by the Indemnitee in such notice
shall be
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conclusively deemed a liability of the Indemnifying Party and the Indemnifying
Party shall pay the amount of such liability to the Indemnitee within five days
after expiration of such 30 Business Day period. If the Indemnifying Party
timely disputes its liability with respect to such claim, the Indemnifying Party
and the Indemnitee shall proceed in good faith to negotiate a resolution of such
dispute.
2.4 Remedies Cumulative. The remedies provided in this Article II
shall be cumulative and shall not preclude assertion by an Indemnitee of any
other rights or the seeking of any and all other remedies against any
Indemnifying Party.
ARTICLE III
MISCELLANEOUS
Section 3.1 Notices. All communications hereunder will be in writing
and, if sent to ISP Holdings, will be mailed, delivered or telecopied and
confirmed to it at ISP Holdings Inc., c/o ISP Management Company Inc., 0000 Xxxx
Xxxx, Xxxxx, Xxx Xxxxxx 00000, Attention: Secretary, telecopy number
000-000-0000, and if sent to GAF, G-I Holdings, G Industries or GCC, will be
mailed, delivered or telecopied and confirmed to it at GAF Corporation, 0000
Xxxx Xxxx, Xxxxx, Xxx Xxxxxx 00000, Attention: Secretary, telecopy number
000-000-0000.
Section 3.2 Counterparts. This Indemnification Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original, but all of such counterparts shall together constitute
one instrument.
Section 3.3 Governing Law. This Indemnification Agreement shall be
construed in accordance with the laws of the State of New York.
Section 3.4 Successors. This Indemnification Agreement shall inure
to the benefit of, and shall be binding upon, the successors and assigns of the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have entered into this
Indemnification Agreement as of the date first above written.
ISP HOLDINGS INC.
By: /s/Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
GAF CORPORATION
By: /s/Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
G-I HOLDINGS INC.
By: /s/Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
G INDUSTRIES CORP.
By: /s/Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
GAF CHEMICALS CORPORATION
By: /s/Xxxxx X. Xxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
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