EX-10.4









Exhibit 10.4 



INDEMNIFICATION
AGREEMENT



        THIS
INDEMNIFICATION AGREEMENT, dated as of June 1, 1989, 1989, by and between ETHYL
CORPORATION, a Virginia corporation (“Ethyl”), and its wholly-owned subsidiary,
TREDEGAR INDUSTRIES, INC., a Virginia corporation (“Tredegar”), is entered into
in connection with a Reorganization and Distribution Agreement dated as of the date of
this Agreement (the “Reorganization Agreement”). 



        WHEREAS,
the parties desire to indemnify, defend and hold harmless one another under certain
circumstances that may arise in connection with the transactions contemplated in the
Reorganization Agreement; 



        NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants contained
in this Agreement, the parties hereby agree as follows: 



ARTICLE I



DEFINITIONS



        Terms
used in this Agreement shall have the meanings assigned to them in the Reorganization
Agreement. 



 




 






ARTICLE II



INDEMNIFICATION



        Section
2.01. Indemnification by Ethyl. Except as set forth in the Tax Sharing Agreement, Ethyl
shall indemnify, defend and hold harmless Tredegar and each of its Affiliates, each of
their respective directors, officers, employees and agents and each of the heirs,
executors, successors and assigns of any of the foregoing (the “Tredegar
Indemnitees”) from and against any and all losses, liabilities, claims, damages,
obligations, payments, costs and expenses, matured or not matured, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, known or unknown (including
without limitation, the costs and expenses of any and all Actions, threatened Actions,
demands, assessments, judgments, settlements and compromises relating thereto and
attorneys’ fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or threatened Actions)
(collectively, “Indemnifiable Losses” and, individually, an “Indemnifiable
Loss”) of the Tredegar Indemnitees arising out of or due to the failure or alleged
failure of Ethyl or any of its Affiliates to pay, perform or otherwise discharge in due
course any of the Ethyl Liabilities.  



        Section
2.02. Indemnification by Tredegar. Except as set forth in the Tax Sharing
Agreement, Tredegar shall indemnify, defend and hold harmless Ethyl and each of its
Affiliates, each  



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of their respective directors,
officers, employees and agents and each of the heirs, executors, successors and assigns
of any of the foregoing (the “Ethyl Indemnitees”) from and against any and all
Indemnifiable Losses of the Ethyl Indemnitees arising out of or due to the failure or
alleged failure of Tredegar or any of its Affiliates to pay, perform or otherwise
discharge in due course any of the Tredegar Liabilities.  



ARTICLE III



PROCEDURE FOR
INDEMNIFICATION



        Section
3.01. Notice of Third Party Claims. Each party indemnified under Section 2.01 or 2.02,
promptly following the earlier of (i) receipt of notice of the commencement of any
Action, or (ii) receipt of information regarding the alleged existence of a claim, against
such indemnitee with respect to which an indemnity may be sought pursuant to this
Agreement (a “Third Party Claim”), shall give the indemnifying party written
notice thereof. The failure of any indemnitee to give notice as provided in this Section
3.01 shall not relieve the indemnifying party of its obligations under this Agreement,
except to the extent that such indemnifying party is prejudiced by such failure to give
notice.  



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        Section
3.02. Defense of Third Party Claims. In case an Action shall be brought, or such
an Action is threatened, against any indemnitee and it shall notify promptly an
indemnifying party of the existence thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may wish, to assume the defense thereof,
with counsel satisfactory to such indemnitee. If the indemnifying party so assumes the
defense thereof, it may not agree to any settlement of such action as the result of
which, any remedy or relief, other than monetary damages for which the indemnifying
party shall be responsible hereunder, shall be applied to or against the indemnitee,
without the prior written consent of the indemnitee. If the indemnifying party does not
assume the defense thereof, it shall be bound by any settlement to which the indemnitee
agrees, irrespective of whether the indemnifying party consents thereto. If any
settlement of any claim is effected by the indemnitee prior to commencement of any
action relating thereto, the indemnifying party shall be bound thereby only if it has
consented in writing thereto or has unreasonably withheld its consent. The indemnitee
shall have the right to employ its own counsel in any such case, including circumstances
in which the indemnitee shall have reasonably concluded that there may be defenses
available to it which are different from 



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or in addition to those available to
the indemnifying party (in which case the indemnifying party shall not have the right to
direct any such different or additional defense of such action or claim on behalf of the
indemnitee, but the fees and expenses of such counsel shall be at the expense of such
indemnitee unless the employment of such counsel shall have been authorized in writing in
advance by the indemnifying party in connection with the defense of such action or claim
or the indemnifying party shall not have employed counsel promptly to take charge of the
defense of such action or claim, in any of which events such fees and expenses shall be
borne by the indemnifying party). Except as expressly provided above, the indemnifying
party shall not be liable to any indemnitee for the costs of investigating, preparing or
defending against such action or claim subsequent to such time as the indemnifying party
assumes the defense of such action or claim, unless such investigation, preparation or
defense shall have been conducted at the request of the indemnifying party, its counsel
or the insurer. In the event that any actions or claims could result in both parties
being liable to the other under these indemnification provisions, the parties shall
endeavor, acting reasonably and in good faith, to agree upon a manner of conducting the
defense and/or settlement of such action or claim with a view to minimizing the legal ex- 



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penses and associated costs that
might otherwise be incurred by the parties under the provisions of this Section 3.02. To
the extent possible, the costs of such defense and/or settlement shall be allocated by
the parties on the basis of the eventual determination of liability.  



        Section
3.03. Other Claims. Any claim on account of an Indemnifiable Loss that does not result
from a Third Party Claim shall be asserted by written notice given by the indemnitee to
the indemnifying party within 60 days of the indemnitee’s discovery of such
Indemnifiable Loss. Such indemnifying party shall have a period of 60 days after the
receipt of such notice within which to respond thereto. If such indemnifying party does
not respond within such 60 days’ period, such indemnifying party shall be deemed to
have accepted responsibility to make payment and shall have no further right to contest
the validity of such claim. If such indemnifying party does respond within such 60
days’ period and rejects such claim in whole or in part, such indemnitee shall be
free to pursue such remedies as may be available to such party under applicable law and
this Agreement.  



        Section
3.04. Miscellaneous Provisions Relating to Indemnification. The indemnification
provided for in this Article III shall be subject to the following provisions:  



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        (a)
      any amounts payable from Ethyl to Tredegar and from Tredegar to Ethyl shall be
offset against each other; and 




        (b)
the amounts for which the indemnifying party shall be liable under this Article III shall
be net of insurance proceeds the benefits of which the indemnitee has received in
connection with the facts giving rise to the right of indemnification.  




        IN
WITNESS WHEREOF, Ethyl and Tredegar have caused this Agreement to be duly executed by
their respective officers, each of whom is duly authorized, all as of the day and year
first above written.  




			ETHYL CORPORATION



By: /s/ E. Whitehead Elmore
       ——————————————

       E. Whitehead Elmore
       Vice President, Secretary

       and General Counsel 






			TREDEGAR INDUSTRIES, INC.



By: /s/ John D. Gottwald
       ——————————————

       John D. Gottwald
       President 






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