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Exhibit 10.1
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Exhibit 10.1
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AMBAC ASSURANCE CORPORATION,
BEAR, XXXXXXX & CO. INC.
XXXXXXX XXXXX BARNEY INC.
and
PRUDENTIAL SECURITIES INCORPORATED
INDEMNIFICATION AGREEMENT
ADVANTA MORTGAGE LOAN TRUST 1999-3
Dated as of August 17, 1999
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TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and shall not
be deemed to be part of this Indemnity Agreement. All capitalized terms used in
this Indemnity Agreement and not otherwise defined shall have the meanings set
forth in Article I of this Indemnity Agreement.)
Page
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Section 1. Defines Terms. 1
Section 2. Other Definitional Provisions. 1
Section 3. Representations and Warranties of the Underwriters. 2
Section 4. Representations and Warranties of the Certificate Insurer. 2
Section 5. Indemnification. 3
Section 6. Amendments, Etc. 5
Section 7. Notices. 5
Section 8. Severability. 6
Section 9. Governing Law. 6
Section 10. Counterparts. 6
Section 11. Headings. 6
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INDEMNIFICATION AGREEMENT dated as of August 17, 1999 (the "Indemnity
Agreement"), by and among AMBAC ASSURANCE CORPORATION, as Certificate Insurer,
and BEAR, XXXXXXX & CO. INC., XXXXXXX XXXXX BARNEY INC. and PRUDENTIAL
SECURITIES INCORPORATED (the "Underwriters").
Section 1. Defined Terms. Unless the context clearly requires otherwise,
all capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement, the Insurance
Agreement or the Policy. For purposes of this Indemnity Agreement, the following
terms shall have the following meanings:
"Certificate Insurer" means Ambac Assurance Corporation, or any successor
thereto, as issuer of the Policy.
"Certificate Insurer Information" has the meaning given such term
in Section 4.
"Insurance Agreement" means the Insurance and Indemnity Agreement (as may
be amended, modified or supplemented from time to time) dated as of August 24,
1999 by and among the Certificate Insurer, Advanta Conduit Receivables, Inc., as
Sponsor, Advanta Mortgage Corp. USA, as Master Servicer, and Bankers Trust
Company of California, N.A., as Trustee.
"Offering Document" means, together, the Preliminary Prospectus
Supplement, dated August 13, 1999, and the Prospectus Supplement, dated August
17, 1999, in respect of the Certificates, and any amendment or supplement
thereto, and any other offering document in respect of the Certificates that
makes reference to the Policy.
"Pooling and Servicing Agreement" means the Pooling and Servicing
Agreement, dated as of August 1, 1999, relating to the Advanta Mortgage Loan
Trust 1999-3, Mortgage Loan Asset-Backed Certificates, Series 1999-3, by and
among the Sponsor, the Master Servicer and the Trustee (as may be amended,
modified or supplemented from time to time as set forth therein).
"Securities Act" means the Securities Act of 1933, including, unless the
context otherwise requires, the rules and regulations thereunder, as amended
from time to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Underwriters" means Bear, Xxxxxxx & Co. Inc., Xxxxxxx Xxxxx Barney Inc.
and Prudential Securities Incorporated, severally.
"Underwriters' Information" has the meaning given such term in Section 3.
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Section 2. Other Definitional Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Indemnity Agreement
shall refer to this Indemnity Agreement as a whole and not to any particular
provision of this Indemnity Agreement, and Section, subsection, Schedule and
Exhibit references are to this Indemnity Agreement unless otherwise specified.
The meanings given to terms defined herein shall be equally applicable to both
the singular and plural forms of such terms. The words "include" and "including"
shall be deemed to be followed by the phrase "without limitation."
Section 3. Representations and Warranties of the Underwriters. Each
Underwriter severally represent and warrant as of the Closing Date as follows:
(a) Compliance With Laws. Such Underwriter will comply in all
material respects with all legal requirements in connection with offers
and sales of the Certificates and will make such offers and sales in the
manner to be provided in the Offering Document.
(b) Offering Document. Such Underwriter will not use, or distribute
to other broker-dealers for use, any Offering Document in connection with
the offer and sale of the Certificates unless such Offering Document
includes such information relating to the Certificate Insurer as has been
furnished by the Certificate Insurer for inclusion therein and has been
approved by the Certificate Insurer.
(c) Underwriters' Information. All material provided by the
Underwriters for inclusion in the Offering Document (as revised from time
to time), shall be true and correct in all material respects, it being
understood and agreed that the only such information furnished by the
Underwriters consists of the following information (collectively, the
"Underwriters' Information"): the information regarding the Underwriters
contained under the heading "Underwriting" in the Offering Document.
Section 4. Representations and Warranties of the Certificate Insurer. The
Certificate Insurer represents and warrants to each Underwriter as follows:
(a) Organization and Licensing. The Certificate Insurer is a duly
organized and licensed and validly existing Wisconsin stock insurance
company duly qualified to conduct an insurance business in the State of
New York.
(b) Corporate Power. The Certificate Insurer has the corporate power
and authority to issue the Policy and execute this Indemnity Agreement and
to perform all of its obligations hereunder and thereunder.
(c) Authorization; Approvals. Proceedings legally required for the
issuance of the Policy and the execution, delivery and performance of this
Indemnity Agreement
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have been taken and all material licenses, orders, consents or other
authorizations or approvals of any governmental boards or bodies legally
required for the enforceability of the Policy have been obtained; any
proceedings not taken and any licenses, authorizations or approvals not
obtained are not material to the enforceability of the Policy.
(d) Enforceability. The Policy, when issued, and this Indemnity
Agreement will each constitute a legal, valid and binding obligation of
the Certificate Insurer, enforceable in accordance with its terms, subject
to insolvency, reorganization, moratorium, receivership and other similar
laws affecting creditors' rights generally and by general principles of
equity and subject to principles of public policy limiting the right to
enforce the indemnification provisions contained therein and herein,
insofar as such provisions relate to indemnification for liabilities
arising under federal securities laws.
(e) Financial Information. The consolidated financial statements of
the Certificate Insurer and subsidiaries as of December 31, 1998 and
December 31, 1997, and for each of the years in the three-year period
ended December 31, 1998, prepared in accordance with generally accepted
accounting principles, included in the Annual Report on Form 10-K of Ambac
Financial Group, Inc. (which was filed with the Commission on March 30,
1999; Commission File Number 1-10777) and the unaudited consolidated
financial statements of the Certificate Insurer and subsidiaries as of
June 30, 1999 and for the periods ending June 30, 1999 and June 30, 1998
included in the Quarterly Report on Form 10-Q of Ambac Financial Group,
Inc. for the period ended June 30, 1999 (which was filed with the
Commission on August 13, 1999), which are incorporated by reference in the
Offering Document, fairly present in all material respects the financial
condition of the Certificate Insurer as of such dates and for the periods
covered by such statements in accordance with generally accepted
accounting principles consistently applied. Since June 30, 1999, there has
been no material change in such financial condition of the Certificate
Insurer that would materially and adversely affect its ability to perform
its obligations under the Policy.
(f) Certificate Insurer Information. The information in the Offering
Document as of the date hereof under the captions "The Certificate
Insurer" and "The Certificate Insurance Policy" (together, the
"Certificate Insurer Information") is true and correct in all material
respects and does not contain any untrue statement of a material fact.
(g) Rating. The Certificate Insurer is not aware of any facts that
if disclosed to Xxxxx'x or S&P would be reasonably expected to result in a
downgrade of the rating of the financial strength of the Certificate
Insurer by either of such Rating Agencies.
(h) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Certificate Insurer's
knowledge, threatened against it at law or in equity or before or by any
court, governmental agency, board or commission or any
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arbitrator which, if decided adversely, would result in a Material Adverse
Change or would materially and adversely affect its ability to perform its
obligations under the Policy or this Indemnification Agreement.
(i) 1933 Act Registration. The Policy is exempt from registration
under the Securities Act.
Section 5. Indemnification.
(a) The Underwriters hereby severally agree to pay, and to protect,
indemnify and save harmless, the Certificate Insurer and its officers,
directors, shareholders, employees, agents and each Person, if any, who
controls the Certificate Insurer within the meaning of either Section 15
of the Securities Act or Section 20 of the Securities Exchange Act from
and against, any and all claims, losses, liabilities (including
penalties), actions, suits, judgments, demands, damages, costs or expenses
(including reasonable fees and expenses of attorneys, consultants and
auditors and reasonable costs of investigations) of any nature arising out
of or by reason of any untrue statement of a material fact or an omission
to state a material fact necessary in order to make the statements therein
in light of the circumstances in which they were made not misleading,
contained in the Underwriters' Information or a breach of any of the
representations and warranties of the Underwriters contained in Section 3.
(b) The Certificate Insurer agrees to pay, and to protect, indemnify
and save harmless, each Underwriters and their respective officers,
directors, shareholders, employees, agents and each Person, if any, who
controls such Underwriters within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act from and
against, any and all claims, losses, liabilities (including penalties),
actions, suits, judgments, demands, damages, costs or expenses (including
reasonable fees and expenses of attorneys, consultants and auditors and
reasonable costs of investigations) of any nature arising out of or by
reason of any untrue statement of a material fact or an omission to state
a material fact necessary in order to make the statements therein in light
of the circumstances in which they were made not misleading, contained in
the Certificate Insurer Information or a breach of any of the
representations and warranties of the Certificate Insurer contained in
Section 4.
(c) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person
(individually, an "Indemnified Party" and, collectively, the "Indemnified
Parties") in respect of which the indemnity provided in this Section 5(a)
or (b) may be sought from any of the Underwriters, on the one hand, or the
Certificate Insurer, on the other (each, an "Indemnifying Party")
hereunder, each such Indemnified Party shall promptly notify the
Indemnifying Party in writing, and the Indemnifying Party shall assume the
defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all expenses. The
Indemnified Party shall have the right to employ separate counsel in any
such action
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and to participate in the defense thereof at the expense of the
Indemnified Party; provided, however, that the fees and expenses of such
separate counsel shall be at the expense of the Indemnifying Party if (i)
the Indemnifying Party has agreed to pay such fees and expenses, (ii) the
Indemnifying Party shall have failed to assume the defense of such action
or proceeding and employ counsel reasonably satisfactory to the
Indemnified Party in any such action or proceeding or (iii) the named
parties to any such action or proceeding (including any impleaded parties)
include both the Indemnified Party and the Indemnifying Party, and the
Indemnified Party shall have been advised by counsel that there may be one
or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party (in which case, if
the Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall not have the right to assume the
defense of such action or proceeding on behalf of such Indemnified Party,
it being understood, however, that the Indemnifying Party shall not, in
connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate
firm of attorneys at any time for the Indemnified Parties, which firm
shall be designated in writing by the Indemnified Party). The Indemnifying
Party shall not be liable for any settlement of any such action or
proceeding effected without its written consent to the extent that any
such settlement shall be prejudicial to the Indemnifying Party, but, if
settled with its written consent, or if there is a final judgment for the
plaintiff in any such action or proceeding with respect to which the
Indemnifying Party shall have received notice in accordance with this
subsection (c), the Indemnifying Party agrees to indemnify and hold the
Indemnified Parties harmless from and against any loss or liability by
reason of such settlement or judgment.
(d) To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party (other
than due to application of this Section), each Indemnifying Party shall
contribute to the losses incurred by the Indemnified Party on the basis of
the relative fault of the Indemnifying Party, on the one hand, and the
Indemnified Party, on the other hand provided, that no Underwriter shall
be liable for any amount in excess of (i) the excess of the sales prices
of the Certificates to the public over the prices paid therefor by the
Underwriters over (ii) the aggregate amount of any damages which the
Underwriters have otherwise been required to pay in respect of the same or
any substantially similar claim.
The relative fault of each Indemnifying Party, on the one
hand, and each Indemnified Party, on the other, shall be determined by
reference to, among other things, whether the breach of, or alleged breach
of, any of its representations and warranties set forth within the control
of, the Indemnifying Party or the Indemnified Party, and the parties
relative intent, knowledge, access to information and opportunity to
correct or
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prevent such breach.
No person guilty of fraudulent misrepresentation (within the
meaning of Section (11)(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 6. Amendments, Etc. This Indemnity Agreement may be amended,
modified, supplemented or terminated only by written instrument or written
instruments signed by the parties hereto.
Section 7. Notices. All demands, notices and other communications to be
given hereunder shall be in writing (except as otherwise specifically provided
herein) and shall be mailed by registered mail or personally delivered and
telecopied to the recipient as follows:
(a) To the Certificate Insurer:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Department - MBS
Telecopy No.: 000-000-0000
Confirmation: 212-668-0340
(b) To the Representative of the Underwriters:
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Securities Group
Telecopy No.: 000-000-0000
Confirmation: 212-272-2000
A party may specify an additional or different address or addresses by
writing mailed or delivered to the other parties as aforesaid. All such notices
and other communications shall be effective upon receipt.
Section 8. Severability. In the event that any provision of this Indemnity
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, the parties hereto agree that such holding shall not invalidate or
render unenforceable any other provision hereof. The parties hereto further
agree that the holding by any court of competent jurisdiction that any remedy
pursued by any party hereto is unavailable or unenforceable shall not affect in
any way
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the ability of such party to pursue any other remedy available to it.
Section 9. Governing Law. This Indemnity Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
Section 10. Counterparts. The Indemnity Agreement may be executed in
counterparts by the parties hereto, and all such counterparts shall constitute
one and the same instrument.
Section 11. Headings. The headings of Sections and the Table of Contents
contained in this Indemnity Agreement are provided for convenience only. They
form no part of this Indemnity Agreement and shall not affect its construction
or interpretation.
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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification
Agreement, all as of the day and year first above mentioned.
AMBAC ASSURANCE CORPORATION,
as Certificate Insurer
By:
Name:
Title:
BEAR, XXXXXXX & CO. INC.
By:
Name:
Title:
XXXXXXX XXXXX BARNEY INC.
By:
Name:
Title:
PRUDENTIAL SECURITIES INCORPORATED
By:
Name:
Title:
