Exhibit 10.1
EXECUTION COPY
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MBIA INSURANCE CORPORATION,
as Insurer
T.A.R. PREFERRED MORTGAGE CORPORATION,
as the Company
and
CS FIRST BOSTON CORPORATION ,
as Underwriter
INDEMNIFICATION AGREEMENT
$280,000,000
PREFERRED MORTGAGE ASSET BACKED CERTIFICATES,
SERIES 1996-2, CLASS X-0, X-0, X-0, X-0, X-0, and A-6 CERTIFICATES
Dated as of December 9, 1996
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TABLE OF CONTENTS
Page
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Section 1. Definitions........................................................1
Section 2. Representations and Warranties of the Insurer......................2
Section 3. Agreements, Representations and Warranties of the Underwriter......3
Section 4. Agreements, Representations and Warranties of the Company..........4
Section 5. Indemnification....................................................5
Section 6. Insurer Undertaking................................................5
Section 7. Notice To Be Given Insurer.........................................5
Section 8. Notice To Be Given to the Underwriter..............................7
Section 9. Notice To Be Given the Company.....................................8
Section 10. Contribution.......................................................9
Section 11. Notices...........................................................10
Section 12. Governing Law, Etc................................................10
Section 13. Insurance Agreement; Underwriting Agreement; Pooling and
Servicing Agreement...............................................10
Section 14. Limitations.......................................................11
Section 15. Counterparts......................................................11
TESTIMONIUM.......................................................SIGNATURE PAGE
SIGNATURES AND SEALS..............................................SIGNATURE PAGE
INDEMNIFICATION AGREEMENT
This Agreement, dated as of December 9, 1996, is by and among MBIA
Insurance Corporation (the "Insurer"), as the Insurer under the Certificate
Guaranty Insurance Policy (the "Policy") issued in connection with the Offered
Certificates described below, T.A.R. Preferred Mortgage Corporation (the
"Company") and CS First Boston Corporation (the "Underwriter").
Section 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings stated herein, unless the context clearly
requires otherwise, in both singular and plural form, as appropriate.
Capitalized terms used in this Agreement but not otherwise defined herein will
have the meanings ascribed to such terms in the Pooling and Servicing Agreement
(as described below).
"Act" means the Securities Act of 1933, as amended, together with all
related rules and regulations.
"Agreement" means this Indemnification Agreement by and among the Insurer,
the , the Company and the Underwriter.
"Company Party" means the Company, each of its parents, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or any
"controlling person" (as such term is used in the Act) of any of the foregoing.
"Indemnified Party" means any party entitled to any indemnification
pursuant to Section 5 below, as the context requires.
"Indemnifying Party" means any party required to provide indemnification
pursuant to Section 5 below, as the context requires.
"Insurance Agreement" means the Insurance Agreement, dated as of December
1, 1996, by and among the Insurer, the Servicer, the Company, the Depositor and
the Trustee.
"Insurer Party" means the Insurer and its respective parents, subsidiaries
and affiliates and any shareholder, director, officer, employee, agent or any
"controlling person" (as such term is used in the Act) of any of the foregoing.
"Losses" means (i) any actual out-of-pocket loss paid by the party entitled
to indemnification or contribution hereunder and (ii) any actual out-of-pocket
costs and expenses paid by such party, including reasonable fees and expenses of
its counsel, to the extent not paid, satisfied or reimbursed from funds provided
by any other Person (provided that the foregoing shall not create or imply any
obligation to pursue recourse against any such other Person).
"Offered Certificates" means the Preferred Mortgage Asset-Backed
Certificates, Series 1996-2, Class A-1, Class X-0, Xxxxx X-0, Class A-4, Class
A-5, and Class A-6 Certificates, issued pursuant to the Pooling and Servicing
Agreement.
"Person" means any individual, partnership, joint venture, corporation,
trust or unincorporated organization or any government or agency or political
subdivision thereof.
"Pooling and Servicing Agreement" means the Pooling and Servicing Agreement
dated as of December 1, 1996 by and among the Company, the Depositor, the
Servicer and the Trustee.
"Prospectus" means the form of final Prospectus included in the
Registration Statement on each date that the Registration Statement and any post
effective amendment or amendments thereto became effective.
"Prospectus Supplement" means the form of final Prospectus Supplement dated
December 9, 1996, and filed with the Securities and Exchange Commission on
December 17, 1996.
"Registration Statement" means the registration statement on Form S-3
relating to the Offered Certificates.
"Servicer" means Advanta Mortgage Corp. USA, as Servicer.
"Underwriter Party" means the Underwriter and its parent, subsidiaries and
affiliates and any shareholder, director, officer, employee, agent or
"controlling person" (as such term is used in the Act) of any of the foregoing.
"Underwriting Agreement" means the Underwriting Agreement by and between
the Company and the Underwriter, dated December 9, 1996.
Section 2. REPRESENTATIONS AND WARRANTIES OF THE INSURER. The Insurer
represents and warrants to the Underwriter and the Company as follows:
(a) Organization and Licensing. The Insurer is a duly incorporated
and existing New York stock insurance company licensed to do business in
the State of New York and is in good standing under the laws of such state.
(b) Corporate Power. The Insurer has the corporate power and
authority to issue the Policy and execute and deliver this Agreement and
the Insurance Agreement and to perform all of its obligations hereunder and
thereunder.
(c) Authorization; Approvals. The issuance of the Policy and the
execution, delivery and performance of this Agreement and the Insurance
Agreement have been duly authorized by all necessary corporate proceedings.
No further approvals or filings of any kind, including, without limitation,
any further approvals of or further filings with any governmental agency or
other governmental authority, or any approval of the Insurer's board of
directors or
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stockholders, are necessary for the Policy, this Agreement and the
Insurance Agreement to constitute the legal, valid and binding obligations
of the Insurer.
(d) Enforceability. The Policy, when issued, and this Agreement and
the Insurance Agreement will each constitute a legal, valid and binding
obligation of the Insurer, enforceable in accordance with its terms,
subject to applicable laws affecting the enforceability of creditors'
rights generally.
(e) Financial Information. The consolidated financial statements of
the Insurer as of December 31, 1995 and December 31, 1994 and for the three
years ended December 31, 1995 incorporated by reference in the Prospectus
Supplement (the "Insurer Audited Financial Statements"), fairly present in
all material respects the financial condition of the Insurer as of such
date and for the period covered by such statements in accordance with
generally accepted accounting principles consistently applied. The
consolidated financial statements of the Insurer and its subsidiaries for
the nine months ended September 30, 1996 incorporated by reference in the
Prospectus Supplement (the "Insurer Unaudited Financial Statements")
present fairly in all material respects the financial condition of the
Insurer as of such date and for the period covered by such statements in
accordance with generally accepted accounting principles applied in a
manner consistent with the accounting principles used in preparing the
Insurer Audited Financial Statements, and, since September 30, 1996 there
has been no material change in such financial condition of the Insurer
which would materially and adversely affect its ability to perform its
obligations under the Policy.
(f) Insurer Information. The information in the Prospectus Supplement
as of the date hereof under the caption "The Certificate Insurance Policy
and the Certificate Insurer" (the "Insurer Information") is limited and
does not purport to provide the scope of disclosure required to be included
in a prospectus for a registrant under the Securities Act of 1933, in
connection with the public offer and sale of securities of such registrant.
Within such limited scope of disclosure, the Insurer Information does not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(g) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Insurer's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if
decided adversely, would materially and adversely affect its condition
(financial or otherwise) or operations of it or would materially and
adversely affect its ability to perform its obligations under this
Agreement, the Policy or the Insurance Agreement.
Section 3. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITER.
The Underwriter represents and warrants to and agrees with the Company and the
Insurer that the statements in the Prospectus Supplement made in reliance upon
and in conformity with written information relating to the Underwriter furnished
to the Company specifically for use in the preparation
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of the Prospectus Supplement, and acknowledged in writing (referred to herein as
the "Underwriter Information"), are true and correct in all material respects.
Section 4. AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants to and agrees with the Insurer and the
Underwriter as follows:
(a) Registration Statement. The information in the Registration
Statement, the Prospectus and the Prospectus Supplement, other than the
Insurer Information and the Underwriter Information, is true and correct in
all material respects and does not contain any untrue statement of a fact
that is material or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(b) Organization. The Company is duly incorporated and existing under
the laws of the State of California and is in good standing as a foreign
corporation in each jurisdiction in which the nature of its business, or
the properties owned or leased by it, makes such qualification necessary.
(c) Corporate Power. The Company has the corporate power and
authority to execute and deliver this Agreement, the Underwriting
Agreement, the Pooling and Servicing Agreement and the Insurance Agreement
and to perform all of its obligations hereunder and thereunder in all
material respects.
(d) Authorization; Approvals. The execution, delivery and performance
of this Agreement, the Underwriting Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement, the Custodial Agreement and the
Assignment Agreement by the Company have been duly authorized by all
necessary corporate proceedings. No further approvals or filings of any
kind, including, without limitation, any further approvals of or further
filing with any governmental agency or other governmental authority, or any
approval of the Company's board of directors or stockholders, are necessary
for this Agreement, the Underwriting Agreement, the Pooling and Servicing
Agreement and the Insurance Agreement to constitute the legal, valid and
binding obligations of the Company.
(e) Enforceability. This Agreement, the Underwriting Agreement, the
Pooling and Servicing Agreement and the Insurance Agreement will each
constitute a legal, valid and binding obligation of the Company, each
enforceable in accordance with its terms, subject, as to the enforcement of
remedies, to bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforceability of creditors' rights generally
applicable in the event of the bankruptcy, insolvency or reorganization of
the Company and to general principles of equity.
(f) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Company's knowledge,
threatened against it at law or in equity or before any court, governmental
agency, board or commission or any arbitrator which, if decided adversely,
would materially and adversely affect its condition (financial or
otherwise)
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or its operations or would materially and adversely affect its ability to
perform its obligations under this Agreement, the Underwriting Agreement,
the Pooling and Servicing Agreement or the Insurance Agreement.
Section 5. INDEMNIFICATION. (a) The Insurer hereby agrees, upon the terms
and subject to the conditions of this Agreement, to indemnify, defend and hold
harmless each Company Party and each Underwriter Party against any and all
Losses incurred by them with respect to the offer and sale of any of the Offered
Certificates and resulting from the Insurer's breach of any of its
representations and warranties set forth in Section 2 of this Agreement.
(b) The Underwriter hereby agrees, upon the terms and subject to the
conditions of this Agreement, to indemnify, defend and hold harmless each
Insurer Party against any and all Losses incurred by it with respect to the
offer and sale of any of the Offered Certificates and resulting from the
Underwriter's breach of any of its representations and warranties set forth in
Section 3 of this Agreement.
(c) The Company hereby agrees, upon the terms and subject to the conditions
of this Agreement, to indemnify, defend and hold harmless each Insurer Party
against any and all Losses incurred by it with respect to the offer and sale of
any of the Offered Certificates and resulting from the Company's breach of any
of its representations and warranties set forth in Section 4 of this Agreement.
(d) Upon the incurrence of any Losses entitled to indemnification
hereunder, the Indemnifying Party shall reimburse the Indemnified Party promptly
upon establishment by the Indemnified Party to the Indemnifying Party of the
Losses incurred.
Section 6. INSURER UNDERTAKING. The Insurer hereby agrees that, for so
long as the Underwriter is required under the Act to deliver a Prospectus
Supplement in connection with the sale of any of the Offered Certificates, the
Insurer will furnish to either the Underwriter or the Company, or both, upon
written request of such party or parties and at the expense of the Underwriter
or the Company, as the case may be, copies of the Insurer's most recent
financial statements (annual or interim, as the case may be) prepared in
accordance with generally accepted accounting principles (subject, as to interim
statements, to normal year-end adjustments) within a reasonable time after they
are available.
Section 7. NOTICE TO BE GIVEN INSURER. Except as provided in Section 10
below with respect to contribution, the indemnification provided herein by the
Insurer shall be the exclusive remedy of each Underwriter Party or Company Party
for the Losses resulting from the Insurer's breach of a representation, warranty
or agreement hereunder; provided, however, that each Underwriter Party or
Company Party shall be entitled to pursue any other remedy at law or in equity
for any such breach so long as the damages sought to be recovered shall not
exceed the Losses incurred thereby resulting from such breach. In the event
that any action or regulatory proceeding shall be commenced or claim asserted
which may entitle each Underwriter Party or Company Party to be indemnified
under this Agreement, such party shall give the Insurer written or telegraphic
notice of such action or claim reasonably promptly after receipt of written
notice thereof and the Insurer, upon request of the
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Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the Insurer
may designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. The Insurer may, at its option, at any
time upon written notice to the Indemnified Party, assume the defense of any
proceeding and may designate counsel reasonably satisfactory to the Indemnified
Party in connection therewith provided that the counsel so designated would have
no actual or potential conflict of interest in connection with such
representation. Unless it shall assume the defense of any proceeding the Insurer
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, the Insurer agrees to indemnify the Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment. The Insurer shall be entitled to participate in the defense of any
such action or claim in reasonable cooperation with, and with the reasonable
cooperation of, each Company Party or each Underwriter Party, as the case may
be. The Indemnified Party will have the right to employ its own counsel in any
such action, but the fees and expenses of such counsel will be at the expense of
such Indemnified Party unless (1) the employment of counsel by the Indemnified
Party at the Insurer's expense has been authorized in writing by the Insurer,
(2) the Insurer has not in fact employed counsel to assume the defense of such
action within a reasonable time after receiving notice of the commencement of
the action or (3) the named parties to any such action include the Insurer on
the one hand and, on the other hand, the Indemnified Party, and representation
of both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them (in which case, if such Indemnified
Party notifies the Insurer in writing that it elects to employ separate counsel
at the expense of the Insurer, the Insurer shall not have the right to assume
the defense of such action or proceeding on such Indemnified Party's behalf), in
each of which cases the reasonable fees and expenses of counsel (including local
counsel) will be at the expense of the Insurer, and all such fees and expenses
will be reimbursed promptly as they are incurred. In the event that any expenses
so paid by the Insurer are subsequently determined to not be required to be
borne by the Insurer hereunder, the party which received such payment shall
promptly refund the amount so paid to the party which made such payment.
Notwithstanding the foregoing, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, the Insurer shall not be liable
for the fees and expenses of more than one counsel for all Company Parties and
more than one counsel for all Underwriter Parties. The Underwriter Parties and
Company Parties shall cooperate with the Insurer Parties in resolving any event
which would give rise to an indemnity obligation pursuant to Section 5(a) hereof
in the most efficient manner. No settlement of any such claim or action shall be
entered into without the consent of each Company Party or each Underwriter
Party, as the case may be, who is subject to such claim or action, on the one
hand, and each Insurer Party who is subject to such claim or action, on the
other hand; provided, however, that the consent of such Company Party or such
Underwriter Party, as applicable, shall not be required if such settlement fully
discharges, with prejudice against the plaintiff, the claim or action against
such Company Party or Underwriter Party. Any failure by a Company Party or
Underwriter Party, as the case may be, to comply with the provisions of this
Section shall relieve the Insurer of liability only if such failure is
materially prejudicial to any legal pleadings, grounds, defenses or remedies in
respect thereof or the Insurer's financial liability hereunder, and then only to
the extent of such prejudice.
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Section 8. NOTICE TO BE GIVEN TO THE UNDERWRITER. Except as provided
below in Section 10 with respect to contribution, the indemnification provided
herein by the Underwriter shall be the exclusive remedy of any Insurer Party for
the Losses resulting from the Underwriter's breach of a representation, warranty
or agreement hereunder; provided, however, that each Insurer Party shall be
entitled to pursue any other remedy at law or in equity for any such breach so
long as the damages sought to be recovered shall not exceed the Losses incurred
thereby resulting from such breach. In the event that any action or regulatory
proceeding shall be commenced or claim asserted which may entitle each Insurer
Party to be indemnified under this Agreement, such party shall give the
Underwriter written or telegraphic notice of such action or claim reasonably
promptly after receipt of written notice thereof and the Underwriter, upon
request of the Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the
Underwriter may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. The Underwriter may,
at its option, at any time upon written notice to the Indemnified Party, assume
the defense of any proceeding and may designate counsel reasonably satisfactory
to the Indemnified Party in connection therewith provided that the counsel so
designated would have no actual or potential conflict of interest in connection
with such representation. Unless it shall assume the defense of any proceeding
the Underwriter 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, the Underwriter agrees to indemnify
the Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. The Underwriter shall be entitled to participate in the
defense of any such action or claim in reasonable cooperation with, and with the
reasonable cooperation of, the Insurer Party. The Indemnified Party will have
the right to employ its own counsel in any such action, but the fees and
expenses of such counsel will be at the expense of such Indemnified Party unless
(1) the employment of counsel by the Indemnified Party at its expense has been
authorized in writing by the Underwriter, (2) the Underwriter has not in fact
employed counsel to assume the defense of such action within a reasonable time
after receiving notice of the commencement of the action or (3) the named
parties to any such action include the Underwriter on the one hand and, on the
other hand, the Indemnified Party, and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them (in which case, if such Indemnified Party notifies the
Underwriter in writing that it elects to employ separate counsel at the expense
of the Underwriter, the Underwriter shall not have the right to assume the
defense of such action or proceeding on such Indemnified Party's behalf), in
each of which cases the reasonable fees and expenses of counsel (including local
counsel) will be at the expense of the Underwriter, and all such fees and
expenses will be reimbursed promptly as they are incurred. In the event that
any expenses so paid by the Underwriter are subsequently determined to not be
required to be borne by the Underwriter hereunder, the party which received such
payment shall promptly refund the amount so paid to the party which made such
payment. Notwithstanding the foregoing, in connection with any one action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, the Underwriter
shall not be liable for the fees and expenses of more than one counsel for all
Insurer Parties. The Insurer Party shall cooperate with each Underwriter Party
and the Company Party in resolving any event which would give rise to an
indemnification obligation pursuant to Section 5(b) hereof in the most efficient
manner. No settlement of any such claim or action shall be entered into without
the consent of the Insurer Party
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who is subject to such claim or action, on the one hand, and each Underwriter
Party who is subject to such claim or action, on the other hand; provided,
however, that the consent of such Insurer Party shall not be required if such
settlement fully discharges, with prejudice against the plaintiff, the claim or
action against such Insurer Party. Any failure by an Insurer Party to comply
with the provisions of this Section shall relieve the Underwriter of liability
only if such failure is materially prejudicial to any legal pleadings, grounds,
defenses or remedies in respect thereof or the Underwriter's financial liability
hereunder, and then only to the extent of such prejudice.
Section 9. NOTICE TO BE GIVEN THE COMPANY. Except as provided below in
Section 10 with respect to contribution, the indemnification provided herein by
the Company shall be the exclusive remedy of any Insurer Party for the Losses
resulting from the Company's breach of a representation, warranty or agreement
hereunder; provided, however, that the Insurer Party shall be entitled to pursue
any other remedy at law or in equity for any such breach so long as the damages
sought to be recovered shall not exceed the Losses incurred thereby resulting
from such breach. In the event that any action or regulatory proceeding shall
be commenced or claim asserted which may entitle an Insurer Party to be
indemnified under this Agreement, such party shall give the Company written or
telegraphic notice of such action or claim reasonably promptly after receipt of
written notice thereof and the Company, upon request of the Indemnified Party,
shall retain counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party and any others the Company may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. The Company may, at its option, at any time upon written
notice to the Indemnified Party, assume the defense of any proceeding and may
designate counsel reasonably satisfactory to the Indemnified Party in connection
therewith provided that the counsel so designated would have no actual or
potential conflict of interest in connection with such representation. Unless
it shall assume the defense of any proceeding the Company 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,
the Company agrees to indemnify the Indemnified Party from and against any loss
or liability by reason of such settlement or judgment. The Company shall be
entitled to participate in the defense of any such action or claim in reasonable
cooperation with, and with the reasonable cooperation of, the Insurer. The
Indemnified Party will have the right to employ its own counsel in any such
action, but the fees and expenses of such counsel will be at the expense of such
Indemnified Party unless (1) the employment of counsel by the Indemnified Party
at its expense has been authorized in writing by the Company, (2) the Company
has not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action or (3)
the named parties to any such action include the Company, on the one hand, and,
on the other hand, the Indemnified Party, and representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them (in which case, if such Indemnified Party notifies the
Company in writing that it elects to employ separate counsel at the expense of
the Company, the Company shall not have the right to assume the defense of such
action or proceeding on such Indemnified Party's behalf), in each of which cases
the reasonable fees and expenses of counsel (including local counsel) will be at
the expense of the Company, and all such fees and expenses will be reimbursed
promptly as they are incurred. In the event that any expenses so paid by the
Company are subsequently determined to not be required to be borne by the
Company hereunder, the party which received such payment shall promptly refund
the amount so paid to the party which made such payment. Notwithstanding the
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foregoing, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, the Company shall not be liable for the
fees and expenses of more than one counsel for all Insurer Parties. Each
Insurer Party shall cooperate with each Company Party and each Underwriter Party
in resolving any event which would give rise to an indemnification obligation
pursuant to Section 5(c) hereof in the most efficient manner. No settlement of
any such claim or action shall be entered into without the consent of each
Insurer Party who is subject to such claim or action, on the one hand, and the
Company Party, on the other hand; provided, however, that the consent of such
Insurer Party shall not be required if such settlement fully discharges, with
prejudice against the plaintiff, the claim or action against such Insurer Party.
Any failure by an Insurer Party to comply with the provisions of this Section
shall relieve the Company of liability only if such failure is materially
prejudicial to any legal pleadings, grounds, defenses or remedies in respect
thereof or the Company's financial liability hereunder, and then only to the
extent of such prejudice.
Section 10. CONTRIBUTION. (a) To provide for just and equitable
contribution if the indemnification provided by the Insurer is determined to be
unavailable for any Underwriter Party (other than pursuant to Section 5 or 7 of
this Agreement), or if the indemnification provided by the Underwriter is
determined to be unavailable for any Insurer Party (other than pursuant to
Section 5 or 8 of this Agreement), the Insurer and the Underwriter shall
contribute to the aggregate costs of liabilities arising from any breach of
their respective representations and warranties set forth in this Agreement on
the basis of the relative fault of all Insurer Parties and all Underwriter
Parties.
(b) To provide for just and equitable contribution if the indemnification
provided by the Insurer is determined to be unavailable for any Company Party
(other than pursuant to Section 5 or 7 of this Agreement), or if the
indemnification provided by the Company is determined to be unavailable for any
Insurer Party (other than pursuant to Section 5 or 9 of this Agreement), the
Insurer and the Company shall contribute to the aggregate cost of liabilities
arising from any breach of their respective representations and warranties set
forth in this Agreement on the basis of the relative fault of all Insurer
Parties and all Company Parties.
(c) Reserved.
(d) The relative fault of each Indemnifying Party, on the one hand, and of
each Indemnified Party, on the other hand, 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 in Section 2, 3 or 4 of this Agreement
relates to information supplied by, or action 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 prevent such
breach.
(e) The Parties agree that the Insurer shall be solely responsible for the
Insurer information and for the Insurer Financial Statements, that the
Underwriter shall be solely responsible for the Underwriter information provided
by the Underwriter in writing for use in the Prospectus Supplement and that the
Company shall be responsible for all other information in the Registration
Statement and in the Prospectus Supplement.
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(f) No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(g) The indemnity and contribution agreements contained in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter Party, any Company Party
or any Insurer Party, (ii) the issuance of any Offered Certificates or the
Policy or (iii) any termination of this Agreement.
(h) Upon the incurrence of any Losses entitled to contribution hereunder,
the contributor shall reimburse the party entitled to contribution promptly upon
establishment by the party entitled to contribution to the contributor of the
Losses incurred.
Section 11. NOTICES. All notices and other communications provided for
under this Agreement shall be addressed to the address set forth below as to
each party or at such other address as shall be designated by a party in a
written notice to the other party.
If to the Insurer: MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Insured Portfolio Management-
Structured Finance (IPM-SF)
If to the Company: T.A.R. Preferred Mortgage Corporation
00000 XxxXxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: President
If to the Underwriter: CS First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Asset Finance Group
Section 12. GOVERNING LAW, ETC. This Agreement shall be deemed to be a
contract under the laws of the State of New York and shall be governed by and
construed in accordance with the laws of the State of New York without regard to
its conflicts of laws provisions. This Agreement may not be assigned by any
party without the express written consent of each other party. Amendments of
this Agreement shall be in writing signed by each party. This Agreement shall
not be effective until executed by each of the Insurer, the Company and the
Underwriter.
Section 13. INSURANCE AGREEMENT; UNDERWRITING AGREEMENT; POOLING AND
SERVICING AGREEMENT. This Agreement in no way limits or otherwise affects the
indemnification obligations of the Company under (a) the Insurance Agreement,
(b) the Underwriting Agreement or (c) the Pooling and Servicing Agreement. To
the extent that this Agreement conflicts with or does not address the
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relative rights of the Underwriter and Company as between themselves as set
forth in the Underwriting Agreement, the Underwriting Agreement shall govern.
Section 14. LIMITATIONS. Nothing in this Agreement shall be construed as
a representation or undertaking by the Insurer concerning maintenance of the
rating currently assigned to its claims-paying ability by Xxxxx'x Investors
Service, Inc. ("Moody's") and/or Standard & Poor's Ratings Group, a division of
XxXxxx-Xxxx, Inc. ("S&P") or any other rating agency (collectively, the "Rating
Agencies").
Section 15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, all as of the date first above written.
MBIA INSURANCE CORPORATION
By /s/ Xxxx X.
-------------------------------
Title
----------------------------
T.A.R. PREFERRED MORTGAGE
CORPORATION
By /s/ Xxxx X. Xxxxxxxxx
-------------------------------
Title Chief Executive Officer
----------------------------
CS FIRST BOSTON CORPORATION
By /s/ Xxxxxxx X'Xxxxxxxx
-------------------------------
Title Vice President
----------------------------
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