INDEMNITY AGREEMENT
October 1, 2000
Reference is made to the Master Agreement dated October 1, 2000 by and
between Pacific Financial Group, Inc. ("PFG"); and AutoCorp Equities, Inc., ACE
Motor Co., Inc. and AutoCorp Financial Services, Inc. (collectively "ACE") (the
"Master Agreement"). Capitalized terms used but not defined herein shall have
the meanings assigned to them in the Master Agreement.
Pursuant to paragraphs 11 and 12 of the Supplemental Agreement and for
valuable consideration, the parties agree as follows:
1. PFG hereby indemnifies and agrees to hold ACE and its affiliates,
officers, directors, shareholders, agents, representatives, employees,
professionals and successors harmless from any and all obligations,
claims, liabilities and costs or expenses (i) which may directly or
indirectly arise from or be related to (a) any sales tax claims which
may now or hereafter be asserted against ACE by any taxing authority or
(b) the servicing or collection practices of PFG or AP, in each case
with respect to any retail installment contract acquired from ACE at
any time prior to on or after October 1, 2000, and (ii) which may be
based upon or be claimed to be due as a result of (x) any sale,
transfer or other disposition of any motor vehicle or any retail
installment contract by any of PFG, AP or ACE at any time prior to, on
or after October 1, 2000, or (y) the transactions contemplated by the
Master Agreement.
2. ACE hereby indemnifies and agrees to hold each of PFG and AP and their
respective affiliates, officers, directors, shareholders, agents,
representatives, employees, professionals and successors harmless from
and against any and all obligations, claims, liabilities and costs or
expenses which may be based upon, or be claimed to be due as a result
of (i) any sale, transfer or other disposition of any motor vehicle or
any retail installment contract by ACE on or after October 1, 2000,
(ii) the servicing or collection practices of ACE with respect to any
retail installment contract transferred to ACE by PFG or AP at any time
prior to, on or after October 1, 2000, (iii) the assumption by ACE of
the lease payments due to equipment lessors in transactions in which
PFG or AP are lessees, from and after October 1, 2000 for the computer
equipment described on Exhibit G attached to the Master Agreement, (iv)
any dealings between ACE and PFG or AP prior to October 1, 2000, and
(v) the transactions contemplated by the Master Agreement.
3. If any proceeding (including any governmental investigation) shall be
instituted directly or indirectly involving a party entitled to
indemnification hereunder (the "Indemnitee"), then Indemnitee shall
promptly notify the indemnifying party (the "Indemnitor"), in writing,
and Indemnitor, upon receipt of written request from Indemnitee shall
retain counsel reasonably satisfactory to Indemnitee to represent
Indemnitee and any others that Indemnitee may designate in such
proceeding and thereupon Indemnitor shall promptly pay the fees and
expenses of such counsel. However, the omission to so notify Indemnitor
will not relieve it from any liability which it may have to Indemnitee
and will not relieve it from any liability to the extent it is not
materially prejudiced as a proximate result of such failure. If any
such action is brought against Indemnitee, Indemnitor will be entitled
to participate therein, and to the extent that it may wish to assume
the defense thereof, and after notice from Indemnitor to Indemnitee of
Indemnitor election to so assume the defense thereof, Indemnitor will
be not liable to Indemnitee for any legal or other expenses
subsequently incurred by Indemnitee in connection with the defense
thereof other than reasonable costs of investigation unless Indemnitor
does not so assume the defense thereof if given the opportunity to do
so. In any such proceeding, Indemnitee shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at
the expense of Indemnitee unless Indemnitor and Indemnitee shall have
mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties)
include both Indemnitor and Indemnitee and representation of such
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is further understood
that, in any case, Indemnitor shall, in addition to the separate firm
described above, be responsible for any fees and expenses of local
counsel necessary in connection with any such proceedings and shall pay
all legal fees and expenses promptly as they are incurred. Indemnitor
shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, Indemnitor agrees to
indemnity Indemnitee from and against any loss or liability by reason
of such settlement or judgment. Indemnitor shall not, without the prior
written consent of Indemnitee, effect any settlement of any pending or
threatened proceeding in respect of which Indemnitee is or could have
been a party and indemnity could have been sought hereunder by
Indemnitee unless such settlement includes an unconditional release of
Indemnitee from all liability arising out of such proceeding.
4. This agreement shall be construed in accordance with the substantive
laws of the State of Texas (without regard to conflicts of laws
principles).
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
PACIFIC FINANCIAL GROUP, INC.
By:_____________________________
Xxxx X. Xxxxxxx, President
AUTOCORP EQUITIES, INC.
By:_____________________________
Xxxxxxx Xxxxxx, President
ACE MOTOR CO., INC.
By:_____________________________
Xxxxxxx Xxxxxx, President