Exhibit 10.5
INDEMNITY AGREEMENT
AGREEMENT, effective as of the ______ day of July, 2004, by and between
Warrantech Corporation (hereinafter "Warrantech or the Indemnitor") and ▇▇▇▇▇▇
Financial Solutions LLC, (hereinafter "▇▇▇▇▇▇"), Reliance Warranty Company
(hereinafter "RWC"), SPG Financial Corp. (hereinafter "SPG"), the current
members and officers of ▇▇▇▇▇▇, RWC and SPG, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇, (collectively and individually, the "Indemnitee(s) ").
Now, therefore, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties agree as follows:
1. Except if any Indemnitee's own negligence or wrongdoing is a
contributing cause of any material amount of damage incurred by the
Indemnitee(s), and only if the Indemnitee(s) fully comply with Section 2 below,
Warrantech, the Indemnitor, hereby agrees to indemnify, in full, the
Indemnitee(s) against any and all costs or damages they incur individually,
collectively or corporately in the defense, or settlement of any litigation,
including as a result of any adverse judgment resulting from any lawsuit that
arises from or relates in any way to, American Auto Guardian Inc., its
affiliates and subsidiaries and/or American Auto Guardian Inc.'s contract
holders (collectively, "Auto Guardian"). The indemnity provided under this
Agreement extends to any litigation, claims or damages that result from, or are
caused by, Warrantech's wrongful use of monies in the Accounts (as hereinafter
defined) and arising out of a claim by Auto Guardian against such Indemnitees in
connection with the service contracts and warranties issued by RWC to Auto
Guardian (all of the foregoing indemnification obligations, the "Indemnified
Obligations"). "Accounts" shall mean Reliance Warranty Company concentration
account No. 649434123, Reliance Warranty Company automotive claims account No.
649434149 and Reliance Warranty Company CPS claims account No. 649434131.
2. As a condition of any Indemnitee receiving an indemnification
under Section 1, the Indemnitees agree that (a) Warrantech shall have exclusive
control in the defense of any claims or litigation with counsel selected by
Warrantech and with Warrantech paying all defense fees and costs directly to the
counsel retained for the Indemnitee, (b) the Indemnitee(s) shall fully cooperate
fully with Warrantech in developing and presenting defenses to any such claims,
including by providing truthful and accurate information that is within the
Indemnitee's knowledge, (c) any Indemnitee seeking Indemnification from
Warrantech who receives a claim notice or complaint or any written
correspondence and materials relating to a claim or possible claim from or
relating to Auto Guardian shall notify Warrantech within ten (10) days of
receiving same, (d) the Indemnitee(s) shall furnish Warrantech with a copy of
each such claim, notice, written correspondence relating to the claims within
ten (10) days of receiving same, and (e) the Indemnitee(s) shall not settle or
compromise any such claim without Warrantech's previous written consent.
3. Notwithstanding anything set forth in this Agreement,
Warrantech's liability under this Agreement shall not apply to the extent
Reliance Insurance Company (In Liquidation) breaches its representation and
warranty in Section 2.7 of the Stock Purchase Agreement dated November 24, 2003
between ▇▇▇▇▇▇ Financial Solutions, LLC and Reliance Insurance Company (In
Liquidation).
4. Except as otherwise specified in this Agreement, all notices,
requests or other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered or within two business days of
dispatch if sent by reputable overnight courier and telecopier addressed as
follows:
If to Warrantech: Warrantech Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.: ▇▇▇▇ San ▇▇▇▇▇▇▇,
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇;
If to ▇▇▇▇▇▇, RWC, SPG, ▇▇▇▇▇ ▇▇▇▇▇ personally and/or ▇▇▇▇▇
▇▇▇▇▇▇ personally: ▇▇▇▇▇▇ Financial Solutions, LLC, ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn.: ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇, Telecopier (561-988-0016)
If to ▇▇▇▇▇▇ ▇▇▇▇▇▇: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇;
Or to such other address as may have been furnished in writing
to the party giving the notice by the party to whom notice is to
be given.
5. EACH OF THE INDEMNITEES AND WARRANTECH HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS AGREEMENT, IT BEING AGREED THAT ALL SUCH TRIALS
SHALL BE CONDUCTED SOLELY BY A JUDGE. EACH OF HM AND WC CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF HM OR WC HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE OTHER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS. EACH OF THE INDEMNITEES AND WARRANTECH AGREES AND
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED BY INDEPENDENT COUNSEL IN CONNECTION
WITH THIS AGREEMENT OR BEEN ADVISED THAT IT SHOULD BE REPRESENTED BY INDEPENDENT
COUNSEL IN CONNECTION WITH THIS AGREEMENT. IF HM OR WC HAS DECIDED NOT TO BE
REPRESENTED BY INDEPENDENT COUNSEL IN CONNECTION WITH THIS AGREEMENT, IT
IRREVOCABLY AND FOREVER WAIVES ANY AND ALL DEFENSES OR RIGHTS ARISING OUT OF OR
RELATED TO SAID DECISION. NOTWITHSTANDING THE FOREGOING, IF ANY CLAIM IS
COMMENCED BY AUTO GUARDIAN AND ANY OR ALL OF THE INDEMNITEES AND WARRANTECH ARE
BOTH INVOLVED IN SUCH CLAIM, AND SUCH CLAIM IS NOT A JURY TRIAL, THE ABOVE
WAIVER OF JURY TRIAL SHALL NOT PRECLUDE THEM FROM PARTICIPATING IN SUCH JURY
TRIAL.
6. None of the terms or provisions of this Agreement may be
amended, supplemented or otherwise modified except by a written instrument
executed by each of the Indemnitees and Warrantech.
7. This Agreement shall be construed without regard to the
principal that a contract should be construed against the draftsperson, and the
parties to this Agreement shall be deemed equal draftspersons of this Agreement.
8. This Agreement may be signed in any number of counterparts, each
of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. Facsimile signatures on the signature
pages of this Agreement shall be effective and bind the parties as if such
signatures were original signatures.
9. The Indemnitees may not directly assign or transfer in any
manner any of their respective rights under this Agreement and are the only
persons and entities entitled to any rights or benefits under or in connection
with this Agreement.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of this ___ day of ____________ 2004.
Warrantech Corporation
By:
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Name:
Title:
▇▇▇▇▇▇ Financial Solutions LLC
By:
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Reliance Warranty Company
By:
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
SPG Financial Corp.
By:
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: President
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