Tax Indemnity Agreement

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"), HART & COOLEY, 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. SETTLEME ...