Exhibit 10.17
INDEMNITY AND CONTRIBUTION AGREEMENT
This INDEMNITY AND CONTRIBUTION AGREEMENT (this "Agreement"), dated as of
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November 14, 2000, among SHELL EPOXY RESINS LLC, a Delaware limited liability
company to be renamed RESOLUTION PERFORMANCE PRODUCTS LLC ("RPP LLC"), and the
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INDEMNIFIED PARTIES (as defined below).
WHEREAS, Seller, Seller Epoxy Resins Inc. and certain other
parties named therein have entered into a Master Sale Agreement dated as of July
10, 2000 (as amended, the "MASTER SALE AGREEMENT");
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WHEREAS, in connection with the transactions contemplated by the
Master Sale Agreement, RPP LLC is offering to sell senior subordinated notes to
certain qualified institutional buyers; and
WHEREAS, in connection with the offer and sale of senior
subordinated notes, RPP LLC has distributed a preliminary offering memorandum to
certain qualified institutional buyers and intends to distribute a final
offering memorandum upon the sale of the senior subordinated notes (each, an
"Offering Memorandum").
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NOW, THEREFORE, in consideration of the premises and of the
mutual consents and obligations hereinafter set forth, the parties hereto hereby
agree as follows:
SECTION 1. DEFINITIONS.
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Capitalized terms used but not defined herein have the meanings
ascribed to them in Schedule A to the Master Sale Agreement, which is
incorporated herein by reference. As used herein, the following terms shall have
the following respective meanings:
"COMMISSION" means the Securities and Exchange Commission or any
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other federal agency at the time administering the Securities Act.
"INDEMNIFIED PARTIES" means the Seller Indemnified Parties and
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the Buyer Indemnified Parties; provided that RPP LLC shall not be an Indemnified
Party hereunder.
"MASTER SALE AGREEMENT" shall have the meaning ascribed to it in
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the recitals to this Agreement.
"OFFERING MEMORANDUM" shall have the meaning ascribed to it in
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the recitals to this Agreement.
"RPP LLC" shall have the meaning ascribed to it in the recitals
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to this Agreement.
SECTION 2. INDEMNIFICATION.
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(a) Subject to subsection (b) below, from and after the date hereof,
RPP LLC shall indemnify, defend and hold harmless each of the Indemnified
Parties from and against all
Damages asserted against, resulting to, or imposed upon or incurred by reason
of, or resulting from, any untrue or alleged untrue statement of a material fact
contained in the Offering Memorandum or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same may be caused
by or contained in any information furnished in writing to RPP LLC by any of the
Indemnified Parties for use therein; provided, however, that RPP LLC shall not
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be liable in any such case to the extent that any such Damages arise out of or
are based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the preliminary or final Offering Memorandum if the
preliminary or final Offering Memorandum or a supplement or amendment thereto
completely corrected in a timely manner such untrue statement or omission; and
provided, further, that RPP LLC shall not be liable in any such case to the
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extent that any such Damages arise out of or are based upon an untrue statement
or alleged untrue statement or omission or alleged omission in the preliminary
or final Offering Memorandum, if such untrue statement or alleged untrue
statement, omission or alleged omission is completely corrected in a timely
manner in an amendment or supplement to the preliminary or final Offering
Memorandum.
(b) Notwithstanding anything to the contrary contained herein, RPP LLC
shall expressly not be obligated to indemnify, defend and hold harmless any of
the Indemnified Parties from and against any Damages if the untrue or alleged
untrue statement or omission or alleged omission arose from or relates to any
matter that such Indemnified Party is required to provide indemnification under
any of the Transaction Documents, Non-US Transaction Documents, Transfer
Contracts, Continuing Affiliate Contracts or Non-US Continuing Affiliate
Contracts.
(c) Conduct of Indemnification Proceedings. Any Indemnified Party entitled
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to indemnification hereunder will (i) give prompt (but in any event within
thirty (30) days after such Indemnified Party has actual knowledge of the facts
constituting the basis for indemnification) written notice to RPP LLC of any
claim with respect to which it seeks indemnification and (ii) permit RPP LLC to
assume the defense of such claim with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that any delay or failure to so notify RPP
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LLC shall not relieve RPP LLC of any and all of its obligations hereunder except
to the extent RPP LLC is materially prejudiced as a result thereof and in any
event shall not relieve it from any liability which it may have otherwise than
on account of this Agreement; provided, further, however, that any Indemnified
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Party entitled to indemnification hereunder shall have the right to select and
employ separate counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Party unless (a) RPP LLC has agreed in writing to pay such fees or expenses, (b)
RPP LLC shall have failed to assume the defense of such claim within a
reasonable time after receipt of notice of such claim from the Indemnified Party
entitled to indemnification hereunder and employ counsel reasonably satisfactory
to such Indemnified Party or (c) in the reasonable judgment of any such
Indemnified Party, based upon advice of counsel, a conflict of interest exists
between such Indemnified Party and RPP LLC with respect to such claims (in which
case, if the Indemnified Party notifies RPP LLC in writing that such Indemnified
Party elects to employ separate counsel at the expense of RPP LLC, RPP LLC shall
not have the right to assume the defense of such claim on behalf of such
Indemnified Party). If such defense is not assumed by RPP LLC, RPP LLC will not
be subject to any liability for any settlement made without its consent (but
such consent will not be unreasonably withheld). An Indemnified Party shall not
be
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required to consent to any settlement involving the imposition of equitable
remedies or involving the imposition of any material obligations on such
Indemnified Party other than financial obligations for which such Indemnified
Party will be indemnified hereunder. Neither RPP LLC nor an Indemnified Party
will be required to consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Whenever the Indemnified Party
or RPP LLC receives a firm offer to settle a claim for which indemnification is
sought hereunder, it shall promptly notify the other of such offer. If RPP LLC
refuses to accept such offer within twenty (20) business days after receipt of
such offer (or of notice thereof), such claim shall continue to be contested
and, if such claim is within the scope of RPP LLC's indemnity contained herein,
the Indemnified Party shall be indemnified pursuant to the terms hereof. If RPP
LLC notifies the Indemnified Party in writing that RPP LLC desires to accept
such offer, but the Indemnified Party refuses to accept such offer within twenty
(20) business days after receipt of such notice, the Indemnified Party may
continue to contest such claim and, in such event, the total maximum liability
of RPP LLC to indemnify or otherwise reimburse the Indemnified Party hereunder
with respect to such claim shall be limited to and shall not exceed the amount
of such offer, plus reasonable out-of-pocket costs and expenses (including
reasonable attorneys' fees and disbursements) to the date of notice that RPP LLC
desires to accept such offer, provided that this sentence shall not apply to any
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settlement of any claim involving the imposition of equitable remedies, to any
settlement imposing any material obligations on such indemnified party other
than financial obligations for which such Indemnified Party will be indemnified
hereunder, or to any settlement which does not include as an unconditional term
thereof the giving by the claimant or Plaintiff to such Indemnfiied Party of a
release from all liability in respect of such claim or litigation. RPP LLC, if
it is not entitled to, or elects not to, assume the defense of a claim, will not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by RPP LLC with respect to such claim in any one
jurisdiction, unless in the written opinion of counsel to the Indemnified Party,
reasonably satisfactory to RPP LLC, use of one counsel would be expected to give
rise to a conflict of interest between such Indemnified Party and any other of
such Indemnified Parties with respect to such claim, in which event RPP LLC
shall be obligated to pay the fees and expenses of one additional counsel for
each Indemnified Party having a conflict of interest.
(d) Contribution. If for any reason the indemnification provided for in
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this Section is unavailable to any Indemnified Party or insufficient to hold any
Indemnified Party harmless as contemplated by this Section, then RPP LLC shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Damage in such proportion as is appropriate to reflect not only the
relative benefits received by such Indemnified Party and RPP LLC, but also the
relative fault of such Indemnified Party and RPP LLC, as well as any other
relevant equitable considerations. No Indemnified Party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution.
(e) Exclusive Remedy. Each of RPP LLC and the Indemnified Parties agree
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that the sole and exclusive remedy of each of RPP LLC and the Indemnified
Parties, with respect to any and all Damages asserted against, resulting to, or
imposed upon or incurred by reason of, or resulting from, any untrue or alleged
untrue statement of a material fact contained in the preliminary or final
Offering Memorandum or any omission or alleged omission to state therein a
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material fact required to be stated therein or necessary to make the statements
therein not misleading, shall be limited to the indemnification provisions set
forth in this Agreement.
SECTION 3. MISCELLANEOUS PROVISIONS.
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(a) Execution in Counterparts. This Agreement may be executed in two
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or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
(b) Waivers. At any time prior to the Closing, the parties to this
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Agreement may (a) extend the time for the performance of any of the obligations
or other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
to any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party.
(c) Amendment. This Agreement may be modified, supplemented or amended
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only by a written instrument executed by all parties hereto.
(d) Entire Agreement. This Agreement constitutes the entire agreement
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of the parties hereto with respect to its subject matter, and supersedes all
prior agreements and understandings of the parties hereto, oral and written,
with respect to its subject matter.
(e) Headings. The headings contained in this Agreement are for the
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sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Agreement.
(f) Successors/Assigns. Except as set forth in this Agreement, no
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party hereto may transfer or assign, directly or indirectly, by operation of law
or otherwise, any of its rights or obligations hereunder without the prior
written consent of the other party hereto, and any purported transfer or
assignment that does not comply with this subsection shall be null and void ab
initio.
(g) No Third-Party Beneficiaries. This Agreement shall not confer any
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rights or remedies upon any Person other than the parties hereto and their
respective successors and permitted assigns and other Persons expressly named
herein (it being understood that each of the Indemnified Parties is an intended
third party beneficiary hereunder and shall be entitled to enforce this
Agreement as if a party hereto).
(h) Interpretation. In construing this Agreement, no consideration
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shall be given to the fact or presumption that either party hereto had a greater
or lesser hand in drafting this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
RESOLUTION PERFORMANCE PRODUCTS LLC
By:/s/ David T. Preston
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Name: David T. Preston
Title: President
SHELL EPOXY RESINS INC.
By:/s/ D.G. Naugle
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Name: D.G. Naugle
Title: Attorney-In-Fact
SHELL OIL COMPANY
By:/s/ D.G. Naugle
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Name: D.G. Naugle
Title: Attorney-In-Fact
RPP HOLDINGS LLC
By:/s/ Scott Kleinman
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Name: Scott Kleinman
Title: Vice President
RESIN ACQUISITION, LLC
By:/s/ Scott Kleinman
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Name: Scott Kleinman
Title: Vice President