INDEMNITY AGREEMENT

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 Butler

Financial Solutions LLC, (hereinafter "Butler"), Reliance Warranty Company

(hereinafter "RWC"), SPG Financial Corp. (hereinafter "SPG"), the current

members and officers of Butler, RWC and SPG, Harris Miller, Karen Parker and

Paula Graff, (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 t