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Exhibit 10.4
INDEMNITY AGREEMENT
INDEMNITY AGREEMENT ("Indemnity Agreement"), dated this ___ day of ____,
_____, between First Union Real Estate Equity and Mortgage Investments, an Ohio
business trust having its principal place of business at 00 Xxxxxx Xxxxxx, Xxx.
0000, Xxxxxxxxx, XX 00000 ("First Union"), and Imperial Parking Corporation, a
Delaware corporation having its principal place of business at 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX Xxxxxx X0X 0X0 ("Impark").
WITNESSETH:
WHEREAS, First Union desires to distribute all of the outstanding common
stock of Impark to First Union shareholders pursuant to a Memorandum of
Understanding dated _________________;
WHEREAS, Impark desires that First Union distribute all of the shares of
Impark Common Stock that First Union holds to the First Union shareholders; and
WHEREAS, the Boards of Directors of First Union and Impark have adopted a
resolution approving this Indemnity Agreement;
NOW THEREFORE, in consideration of the foregoing premises and the
undertakings herein contained and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
STATEMENT OF FACTS
1.1 Oracle Litigation. Newcourt Financial Ltd., as the assignee of Oracle
Corporation Canada Inc., has brought suit against First Union Management, Inc.,
an affiliate of First Union ("FUMI"), and Imperial Parking Limited, a
subsidiary of Impark ("Impark Limited"), in Ontario Superior Court. The suit
alleges that the plaintiff is owed $825,000 (USD) plus interest and costs
pursuant to a payment plan agreement among Oracle Corporation Canada Inc., FUMI
and Impark Limited. This matter shall be referred to herein as the "Oracle
Litigation".
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1.2 VenTek Bond I. Reference is made to Contract A950 (97031) between
VenTek International, Inc., a California corporation and subsidiary of FUMI
("VenTek"), and the Santa Xxxxx County Transit District. In connection with that
contract, VenTek was required to furnish a Performance/Payment/Maintenance Bond
for Public Works in favor of Santa Xxxxx County Transit District, in the sum of
$5,316,483.00 (USD). The National Fire Insurance Company of Hartford is Surety
for the bond, dated February 13, 1998. At the time the bond was executed, VenTek
was a subsidiary of Imperial Parking (U.S.), Inc., a predecessor of Impark
("Impark US"). This matter shall be referred to as "VenTek Bond I" in this
Indemnification Agreement.
1.3 VenTek Bond II. Reference is made to Ticket Vending Equipment Contract
C-60379JPB between VenTek and the Peninsula Corridor Joint Powers Board. In
connection with that contract, VenTek was required to furnish a
Performance\Payment\Maintenance\ Guarantee Bond in favor of the Peninsula
Corridor Joint Powers Board, in the sum of $6,169,265 (USD). The National Fire
Insurance Company of Hartford is Surety for the bond, dated February 25, 1998.
At the time the bond was executed, VenTek was a subsidiary of Impark U.S. This
matter shall be referred to as "VenTek Bond II" in this Indemnification
Agreement.
ARTICLE II
INDEMNIFICATION
2.1 Indemnification by First Union. First Union shall indemnify Impark
and each of its affiliates, directors, officers, employees, consultants and
agents in respect of, and hold each such party harmless against, any and all
debts, obligations and other liabilities (whether absolute, accrued,
contingent, fixed or otherwise, or whether known or unknown, or due or to
become due or otherwise), monetary damages, fines, fees, penalties, interest
obligations, deficiencies, losses and expenses (including without limitation
amounts paid in settlement, interest, court costs, costs of investigators,
reasonable fees and expenses of attorneys, accountants, financial advisors and
other experts, and other expenses of litigation whether or not resulting in any
liability) ("Damages") incurred or suffered by Impark or each such party
resulting from, relating to or constituting:
(a) the Oracle Litigation, but only to the extent that Damages resulting
from, relating to or constituting the Oracle Litigation exceed $605,000;
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(b) VenTek Bond I; and
(c) VenTek Bond II.
2.2 Indemnification Claims.
(a) A party entitled, or seeking to assert rights, to indemnification
under this Article II (an "Indemnified Party") shall give written notification
to the party from whom indemnification is sought (an "Indemnifying Party") of
the commencement of any suit or proceeding relating to a third party claim for
which indemnification pursuant to this Article II may be sought. Such
notification shall be given within 20 business days after receipt by the
Indemnified Party of notice of such suit or proceeding, and shall describe in
reasonable detail (to the extent known by the Indemnified Party) the facts
constituting the basis for such suit or proceeding and the amount of the
claimed damages; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall relieve the
Indemnifying Party of any liability or obligation hereunder except to the
extent of any damage or liability caused by or arising out of such failure.
Promptly, and in any event within 20 days after delivery of such notification,
the Indemnifying Party may, upon written notice thereof to the Indemnified
Party, assume control of the defense of such suit or proceeding with counsel
reasonably satisfactory to the Indemnified Party; provided that (i) the
Indemnifying Party may only assume control of such defense if it acknowledges
in writing to the Indemnified Party that any Damages that may be assessed
against the Indemnified Party in connection with such suit or proceeding shall
be indemnified pursuant to this Article II and (ii) the Indemnifying Party may
not assume control of the defense of a suit or proceeding involving criminal
liability or in which equitable relief is sought against the Indemnified Party.
If the Indemnifying Party does not so assume control of such defense, the
Indemnified Party shall control such defense. The party not controlling such
defense (the "Non-controlling Party") may participate therein at its own
expense; provided that if the Indemnifying Party assumes control of such
defense and the Indemnified Party reasonably concludes that the Indemnifying
Party and the Indemnified Party have conflicting interests or different
defenses available with respect to such suit or proceeding, the reasonable fees
and expenses of counsel to the Indemnified Party shall be considered "Damages"
for purposes of this Agreement. The party controlling such defense (the
"Controlling Party") shall keep the Non-controlling Party advised of the status
of such suit or proceeding and the defense thereof and shall consider in good
faith recommendations made by the Non-controlling Party with respect thereto.
The Non-controlling Party shall furnish the Controlling Party with such
information as it may have with respect to such suit or proceeding (including
copies of any summons, complaint
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or other pleading which may have been served on such party and any written
claim, demand, invoice, billing or other document evidencing or asserting the
same) and shall otherwise cooperate with and assist the Controlling Party in
the defense of such suit or proceeding. The Indemnifying Party shall not agree
to any settlement of, or the entry of any judgment arising from, any such suit
or proceeding without the prior written consent of the Indemnified Party, which
shall not be unreasonably withheld or delayed. The Indemnified Party shall not
agree to any settlement of, or the entry of any judgment arising from, any such
suit or proceeding without the prior written consent of the Indemnifying Party,
which shall not be unreasonably withheld or delayed.
(b) Impark hereby acknowledges that First Union is the Controlling Party
with respect to the Oracle Litigation, VenTek Bond I and VenTek Bond II. First
Union acknowledges that any damages, fines, costs or other liabilities that may
be assessed against Impark in connection with the Oracle Litigation, VenTek Bond
I and VenTek Bond II constitute Damages for which Impark shall be indemnified
pursuant to this Article II.
(c) In order to seek indemnification under this Article II other than as
provided in Section 2.2(a) above, an Indemnified Party shall give written
notification (a "Claim Notice") to the Indemnifying Party which contains (i) a
description and the amount (the "Claimed Amount") of any Damages incurred or
reasonably expected to be incurred by the Indemnified Party, (ii) a statement
that the Indemnified Party is entitled to indemnification under this Article II
for such Damages and a reasonable explanation of the basis therefor, and (iii)
a demand for payment (in the manner provided in paragraph (d) below) in the
amount of such Damages.
(d) Within 20 days after delivery of a Claim Notice, the Indemnifying
Party shall deliver to the Indemnified Party a written response (the
"Response") in which the Indemnifying Party shall: (i) agree that the
Indemnified Party is entitled to receive all of the Claimed Amount (in which
case the Response shall be accompanied by a payment by the Indemnifying Party
to the Indemnified Party of the Claimed Amount, by check or by wire transfer);
(ii) agree that the Indemnified Party is entitled to receive part, but not all,
of the Claimed Amount (the "Agreed Amount") (in which case the Response shall
be accompanied by a payment by the Indemnifying Party to the Indemnified Party
of the Agreed Amount, by check or by wire transfer) or (iii) dispute that the
Indemnified Party is entitled to receive any of the Claimed Amount. If the
Indemnifying Party in the Response disputes its liability for all or part of
the Claimed Amount, the Indemnifying Party and the Indemnified Party shall
follow the procedures set forth in Section 2.2(e) for the resolution of such
dispute (a "Dispute").
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(e) During the 60-day period following the delivery of a Response that
reflects a Dispute, the Indemnifying Party and the Indemnified Party shall use
good faith efforts to resolve the Dispute.
(f) Notwithstanding the other provisions of this Section 2.2, if a third
party asserts (other than by means of a lawsuit) that an Indemnified Party is
liable to such third party for a monetary or other obligation which may
constitute or result in Damages for which such Indemnified Party may be
entitled to indemnification pursuant to this Article II, and such Indemnified
Party reasonably determines that it has a valid business reason to fulfill such
obligation, then (i) such Indemnified Party shall be entitled to satisfy such
obligation, without prior notice to or consent from the Indemnifying Party,
(ii) such Indemnified Party may subsequently make a claim for indemnification
in accordance with the provisions of this Article II, and (iii) such
Indemnified Party shall be reimbursed, in accordance with the provisions of
this Article II, for any such Damages for which it is entitled to
indemnification pursuant to this Article II (subject to the right of the
Indemnifying Party to dispute the Indemnified Party's entitlement to
indemnification, or the amount for which it is entitled to indemnification,
under the terms of this Article II).
2.3 Withdrawal of Claims. If the legal proceeding or written claim with
respect to which a claim notice has been given is definitively withdrawn or
resolved in favor of the Indemnified Party, the Indemnified Party shall
promptly so notify the Indemnifying Party.
ARTICLE III
TERMINATION
3.1 Termination of Agreement. The Parties may terminate this Agreement by
mutual written consent.
3.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 3.1, all obligations of the Parties hereunder shall
terminate without any further liability of any Party to any other Party (except
for any liability of any Party for breaches of this Agreement).
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ARTICLE IV
MISCELLANEOUS
4.1 Press Releases and Announcements. No Party shall issue any press
release or public announcement relating to the subject matter of this Indemnity
Agreement including with respect to the settlement of any claim without the
prior written approval of the other Parties; provided, however, that any Party
may make any public disclosure it believes in good faith is required by
applicable law, regulation or stock market rule (in which case the disclosing
Party shall use reasonable efforts to advise the other Parties and provide them
with a copy of the proposed disclosure prior to making the disclosure). The
Parties hereby consent to the filing of this Indemnity Agreement with the
United States Securities and Exchange Commission in connection with the Impark
Form 10 filing.
4.2 No Third Party Beneficiaries. This Indemnity Agreement shall not
confer any rights or remedies upon any person other than the Parties and the
affiliates of Impark that are entitled to indemnification hereunder and their
respective successors and permitted assigns.
4.3 Entire Agreement. This Indemnity Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements or representations by or among
the Parties, written or oral, with respect to the subject matter hereof.
4.4 Succession and Assignment. This Indemnity Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests or obligations hereunder without the prior written
approval, not to be unreasonably withheld or delayed, of the other Party.
4.5 Counterparts and Facsimile Signature. This Indemnity Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but both of which together shall constitute one and the same instrument. This
Indemnity Agreement may be executed by facsimile signature.
4.6 Headings. The section headings contained in this Indemnity Agreement
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Indemnity Agreement.
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4.7 Notices. All notices, requests, demands and other communications under
this Indemnity Agreement shall be in writing and shall be deemed to have been
duly given (i) on the date of service if served personally on the party to whom
notice is given, (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, provided telephonic
confirmation of receipt is obtained promptly after completion of transmission,
(iii) on the business day after delivery to an overnight courier service or the
Express mail service maintained by the United States Postal Service, provided
receipt of delivery has been confirmed, or (iv) on the fifth day after mailing,
if mailed by registered or certified mail, postage prepaid, properly addressed
and return-receipt requested, in all cases to the parties as follows:
First Union Real Estate Equity and
Mortgage Investments
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Telephone: (000) 000-0000
or
Imperial Parking Corporation
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX Xxxxxx X0X0X0
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Telephone: (000) 000-0000
4.8 Governing Law. This Indemnity Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York without
giving effect to any choice or conflict of law provision or rule (whether of
the State of New York or any other jurisdiction) that would cause the
application of laws of any jurisdictions other than those of the State of New
York.
4.9 Amendments and Waivers. No amendment of any provision of this
Indemnity Agreement shall be valid unless the same shall be in writing and
signed by both of the Parties. No waiver of any right or remedy hereunder
shall be valid unless the same shall be in writing and signed by the Party
giving such waiver. No waiver by any Party with respect to any default,
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misrepresentation or breach of warranty or covenant hereunder shall be deemed
to extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.
4.10 Severability. Any term or provision of this Indemnity Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to limit
the term or provision, to delete specific words or phrases, or to replace any
invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified.
4.11 Construction.
(a) The language used in this Agreement shall be deemed to be the language
chosen by the Parties to express their mutual intent, and no rule of strict
construction shall be applied against any Party.
(b) Any reference to any federal, state, local or foreign statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
FIRST UNION REAL ESTATE EQUITY & MORTGAGE
INVESTMENTS
By:____________________________________
Name:__________________________________
Title:_________________________________
IMPERIAL PARKING CORPORATION
By:____________________________________
Name:__________________________________
Title:_________________________________
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