Exhibit 1.3
INDEMNITY AGREEMENT
Reference is made to the Prospectus Supplement dated March 5, 1998 (the
"Prospectus Supplement") relating to the Asset Backed Notes, Series 1998-1 (the
"Notes"), which Notes will be issued by Mortgage Lenders Network Home Equity
Loan Trust, Series 1998-1. Capitalized terms used but not defined herein shall
have the meanings assigned to them in the Prospectus Supplement.
First Union Capital Markets, a division of Wheat First Securities Corp. a
Virginia corporation ("First Union"), hereby represents and warrants to
Prudential Securities Secured Financing Corporation ("PSSFC") and Prudential
Securities Incorporated (the "Underwriter") that (a) it provided to PSSFC the
information relating to First Union set forth in the Prospectus Supplement in
the fifth paragraph under "Underwriting" (the "First Union Information"), and
(b) such First Union Information does not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. First Union
acknowledges and understands that PSSFC is relying on the aforesaid
representation and warranty and is causing the issuance of the Notes in partial
reliance thereon and First Union agrees, in consideration for PSSFC facilitating
the financing of the Mortgage Loans and in consideration of the Underwriter's
purchase of the Notes, to indemnify and hold harmless PSSFC, each of PSSFC's
directors, each of PSSFC's officers who signed the Registration Statement and
each person if any who controls PSSFC within the meaning of the Securities Act
of 1933, as amended, and the Underwriter and each person who controls the
Underwriter within the meaning of the Securities Act of 1933, as amended, for
any losses, claims, damages or liabilities joint or several it incurs as a
result of a breach of such representation and warranty and will reimburse any
legal or other expenses incurred by PSSFC or any such director, officer or
controlling person and the Underwriter or any such controlling person in
connection with investigating any such loss, claim, damage, liability or action.
Each obligation of First Union to indemnify PSSFC and the Underwriter
(each, an "Indemnified Party") is conditioned upon the following: the related
Indemnified Party shall promptly notify First Union in writing of the existence
of any fact or circumstance known to such Indemnified Party giving rise to First
Union's obligation of indemnity and in the case of any claim or litigation which
may give rise to such an obligation, the Indemnified Party shall promptly notify
First Union in writing of the making of such claim or the commencement of such
litigation when the same become known to such Indemnified Party. First Union
shall have the option of defending the Indemnified Party in connection with any
such claim or litigation using First Union's own counsel, which counsel shall be
reasonably satisfactory to the Indemnified Party: if First Union exercises such
option, First Union shall not be responsible for the Indemnified Party's
attorneys' fees incurred after the Indemnified Party receives notification of
First Union's exercise of such option and the Indemnified Party has acknowledged
its approval
of the selected counsel. First Union shall have the right to settle any such
claim or litigation with the approval the Indemnified Party, which approval
shall not be unreasonably withheld. If the Indemnified Party recovers from any
third party any amount paid by First Union to the Indemnified Party in
satisfaction of First Union's obligations to indemnify the Indemnified Party,
the Indemnified Party shall promptly pay to First Union the full amount so
recovered. First Union shall have no obligation to indemnify each Indemnified
Party for any claims, liabilities, losses, costs, damages, attorneys' fees, or
other expenses which would have been avoided had the Indemnified Party taken
reasonable action to mitigate such claims, liabilities, losses, costs, damages,
attorneys' fees, or other expenses. First Union shall have no obligation to
indemnify each Indemnified Party from any claim, liability, loss, cost, damage,
attorneys' fees or other expenses arising from the negligence or willful
misconduct of such Indemnified Party or its officers, employees, or agents.
The obligations of First Union hereunder shall be in addition to any
liability which First Union may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of the related Indemnified
Party and to each person, if any, who controls such Indemnified Party within the
meaning of the Securities Act of 1933, as amended.
The agreement shall be construed in accordance with the substantive laws
of the State of New York (without regard to conflicts of laws principles).
2
IN WITNESS WHEREOF, First Union has executed this Indemnity Agreement as
of March 5, 1998.
FIRST UNION CAPITAL MARKETS, a division
of Wheat First Securities Corp.
BY: /s/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
