Exhibit 10.14
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into as of and effective the 12th day of February, 1997, by and between
XXXXXX INDUSTRIES, INC., whose mailing address is 0000 X. Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 ("Xxxxxx"), and X.X. XXXX, XX, whose
mailing address is 0000 X. Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 3118
("Hill").
W I T N E S S E T H:
THIS AGREEMENT is made and entered into under the following
circumstances:
X. Xxxx has sold his interest in Liberty Finance Company
("Liberty"), Team Automobile Sales & Service, Inc. ("Team") and Wholesale
Acquisitions, Inc. ("Wholesale") (Liberty, Team and Wholesale maybe
referred to sometimes hereinafter as the "Acquirees"), to the Xxxxxx
pursuant to those certain purchase agreements dated even herewith;
X. Xxxx has previously personally guaranteed certain obligations of
the Acquirees to certain creditors, secured and unsecured (the
"Obligations"), as more specifically identified in Exhibit "A", a true and
accurate copy of which is attached hereto and incorporated herein by this
reference; and
X. Xxxxxx desires to indemnify Hill, and others as named below,
against any personal liability incurred in connection with the Obligations
as the result of Xxxxxx'x failure to perform as to payment thereof.
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the parties hereto covenant and agree as
follows:
1. Xxxxxx'x Indemnification of Hill Parties. Xxxxxx shall
indemnify and hold harmless Hill, X.X. Xxxx, Xx., X.X. Xxxx Enterprises,
Inc., Deltona House Rentals, Inc., Affordable Leasing, Inc., Polaris of
Orlando, Inc., Motorcycle Insurance Agency, Inc., Orange Acceptance
Corporation and X.X. Xxxx, Xx. (all of which are jointly referred to herein
as the "Hill Parties" and are intended beneficiaries of this Agreement with
the same rights of enforcement against the Xxxxxx hereunder) from and
against the Obligations, including payments, liabilities, costs (including
attorneys fees and costs), and penalties thereunder, however arising.
Specifically, the Xxxxxx acknowledges that certain Forebearance Agreement
(and associated documents) between the Hill Parties (and others) and
General Electric Credit Corporation ("GE") dated 21 January 1997, wherein
the Hill parties guaranteed to GE the payment of the obligations of
Liberty Finance Company to GE (the "GE Debt"), and further acknowledges
that the Hill Parties, in some cases, provided security to GE for the GE
Debt, including collateral assignments of mortgages (in the case of X.X.
Xxxx, Xx., and Xxxx) as well as other security. Xxxxxx acknowledges that
the duty of indemnification includes ensuring that the Hill Parties suffer
no detriment to the security which was provided to GE, to the extent the
detriment arises from a failure by Xxxxxx to pay the GE Debt resulting in
action by GE against such security that is detrimental to the interests of
the party who owns such collateral. This duty of indemnification shall
continue until, if ever, the Obligations are paid in full, the Hill Parties
have been fully released from liability by the holders of the Obligations,
and all security which has been pledged to secure any of the Obligations
has been released to the Hill Parties owner of such property.
2. Indemnification Procedure.
(a) Claims for Indemnity. Whenever a claim shall arise for
which any party shall be entitled to indemnification hereunder the
indemnified party shall notify the indemnifying party or parties in writing
within sixty (60) days of the indemnified party's first receipt of notice
of, or the indemnified party's obtaining actual knowledge of, such claim,
and in any event within such shorter period as may be necessary for the
indemnifying party or parties to take appropriate action to resist such
claim. Such notice shall specify all facts known to the indemnified party
giving rise to such indemnity rights and shall estimate (to the extent
reasonably possible) the amount of potential liability arising therefrom.
If an indemnifying party shall be duly notified of such dispute, the
parties shall attempt to settle and compromise the same or may agree to
submit the same to arbitration or, if unable or unwilling to do any of the
foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement,
compromise, arbitration or litigation shall promptly thereafter be paid and
satisfied by those indemnifying parties obligated to make indemnification
hereunder.
(b) Right to Defend. If the facts giving rise to any claim
for indemnification shall involve any actual or threatened action or demand
by any third party against the indemnified party or any of its affiliates,
the indemnifying party or parties shall be entitled (without prejudice to
the indemnified party's right to participate at its own expense through
counsel of its own choosing), at their expense and through a single counsel
of their own choosing, to defend or prosecute such claim in the name of the
indemnifying party or parties, or any of them, or if necessary, in the name
of the indemnified party. In any event, the indemnified party shall give
the indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or
demand is solely money damages, the indemnifying party shall have fifteen
(15) days after receipt of such notice of settlement to object to the
proposed compromise or settlement, and if it does so object, the
indemnifying party shall be required to undertake, conduct and control,
through counsel of its own choosing and at its sole expense, the settlement
or defense thereof, and the indemnified party shall cooperate with the
indemnifying party in connection therewith.
3. Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and delivered to the person to
whom the notice is directed, either (i) in person, (ii) by U.S. Mail, as
registered or certified item with return receipt requested, (iii) delivered
by delivery service, or (iv) sent by facsimile, telex or telecopy. Notices
delivered by mail shall be deemed to be given when deposited in a post
office or other depository under the care or custody of the United States
Postal Service, enclosed in a wrapper, addressed properly with proper
postage affixed or when received at the address set forth herein if
delivered or sent by facsimile. All notices shall be addressed as follows:
If to Hill: X.X. Xxxx, XX
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxx X. Xxxxxxx, Esquire
Milam, Otero, Xxxxxx, Xxxxxx & Xxxxxx, P.A.
0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000
If to Xxxxxx: Xxxxxx Industries, Inc.
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
With a copy to: X. X. Xxxxxxx, Xx., Esquire
Xxxxxxxxx Traurig
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
or to such other address or addresses as the party addressed may from time
to time designate to the others in writing in accordance with this
paragraph.
4. Counterparts. This Agreement may be executed in one or more
counterparts by the parties by the parties hereto, and all such
counterparts together shall constitute one and the same agreement.
5. Successors, etc. This Agreement is for the benefit of the
parties hereto, and shall be binding upon them, together with their
respective heirs, executors, administrators, successors, and assigns. No
right or obligation created hereunder shall be assignable or delegable by
any party hereto without the prior written consent of every other party
hereto.
6. Governing Law; Jurisdiction. The validity, interpretation,
and performance of this Agreement shall be governed by the laws of the
State of Florida, without giving effect to the principles of comity or
conflicts of laws thereof. Each party hereto agrees to submit to the
personal jurisdiction and venue of the state and federal courts located in
Orange County, Florida, for a resolution of all disputes between the
parties arising in connection with this Agreement, and hereby waives the
claim or defense therein that such courts constitute an inconvenient forum.
7. Severability. Each section, subsection, and lesser section
of this Agreement constitutes a separate and distinct undertaking,
covenant, or provision hereof. In the event that any provision of this
Agreement shall finally be determined to be invalid or unenforceable, such
provision shall be deemed limited by construction in scope and effect to
the minimum extent necessary to render the same valid and enforceable, and,
in the event such a limiting construction is impossible, such unlawful
provision shall be deemed severed from this Agreement, but every other
provision of this Agreement shall remain in full force and effect.
8. Waivers. Any waiver by any party of any violation of,
breach of, or default under any provision of this Agreement by another
party shall not be construed as, or constitute, a continuing waiver of such
provision, or waiver of any other violation of, breach of, or default under
any other provision of this Agreement.
9. Third Parties. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any
other person or entity other than the parties hereto any rights or remedies
under or by reason of this Agreement.
10. Costs of Enforcement. In the event a party initiates legal
action (including both trial and appellate proceedings) to enforce his or
its rights hereunder, the prevailing party in such action shall recover
from the non-prevailing party in such action his or its reasonable
litigation expenses (including, but not limited to reasonable attorneys'
fees and court costs) of all such proceedings.
11. Time of the Essence. Time shall be of the essence for all
performances hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
Xxxxxx:
Xxxxxx Industries, Inc.
By: /S/ J. Xxxx Xxxxxxxxxx, Xx.
Title:Asst. X. X.
Xxxx:
/S/ X.X. Xxxx, XX
X. X. Xxxx, XX
Exhibit "A"
OBLIGATIONS OF THE HILL PARTIES
1. General Electric Credit Corporation pursuant to that certain Motor
Vehicle Installment Contract Loan and Security Agreement dated June 3,
1993, as amended, together with that certain Forebearance Agreement, and
associated documents, dated 21 January 1997 (the "GE Debt").
2. (i) Xxx Xxxxxx, Inc.-dated January 1, 1993, for $70,000, due on
December 31, 1997, plus interest at 16% per annum.
(ii) Xxx Xxxxxx, Inc.-dated April 17, 1992, for $50,000, due on April
17, 1997, plus interest at 16% per annum.
(iii) Xxx Xxxxxx, Inc.-dated August 1, 1992, for $60,000, due on July
31, 1997, plus interest at 16% per annum.
(iv) Xxxxxx Xxxx-dated June 1, 1992, for $1,500, due on demand, plus
interest at 15% per annum.
(v) Xxxx Xxxxxxxxxx-undated in 1994, for $10,000, due on demand, with
interest at 15% per annum.
(vi) Xxxx Xxxxxxxxxx-dated December 30, 1994, for $5,000, due on
demand, plus interest at 15% per annum.
(vii) Xxxx Xxxxxxxxxx-dated December 27, 1994, for $5,000, due on
demand, plus interest at 15% per annum.
(viii) Xxxx Xxx Xxxxxx-dated January 1, 1995, for $100,000, due on
October 30, 2001, plus interest at 10% per annum.
(ix) Xxxx X. Xxxxxx-dated February 17, 1995, for $101,006.68, due on
October 30, 2001, with interest at 10% per annum.
(x) X.X. Xxxx, Xx.-dated August 1, 1993, for $200,000, due on
December 31, 2001, with interest at 10% per annum.
(xi) X. X. Xxxx, III - $190,468.41, dated July 12, 1996, payable
November 15, 2001 with interest at 15% per annum.
3. Xxxxxxx Bank of Central Florida, N.A., dated April 30, 1996, original
principal $300,000 due on demand, plus interest at the rate of 9.250%.
4. Xxxxxxx Bank, N.A. - original principal $34,120.05, dated November 8,
1996 for Chevy Suburban owned by Wholesale Acquisitions, Inc.
5. Manheim Automotive Financial Services, Inc. - Note $2,000,000, dated
July 30, 1996, Wholesale Acquisitions, Inc., Maker, Liberty Finance Company
and X.X. Xxxx, Xx., Guarantors.
