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Exhibit 10.1
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AMBAC ASSURANCE CORPORATION,
and
BEAR, XXXXXXX & CO. INC.
as Representative of the Underwriters
INDEMNIFICATION AGREEMENT
ADVANTA MORTGAGE LOAN TRUST 2000-2
Dated as of August 16, 2000
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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. Defined 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. 6
Section 8. Severability. 6
Section 9. Governing Law. 6
Section 10. Counterparts. 6
Section 11. Headings. 7
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INDEMNIFICATION AGREEMENT dated as of August 16, 2000 (the "Indemnity
Agreement"), by and among AMBAC ASSURANCE CORPORATION, as Certificate Insurer,
and BEAR, XXXXXXX & CO, INC, as Representative of 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
22, 2000 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 the Prospectus Supplement, dated August 16,
2000, 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, 2000, relating to the Advanta Mortgage Loan
Trust 2000-2, Mortgage Loan Asset-Backed Certificates, Series 2000-2, 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).
"Representative" means Bear, Xxxxxxx & Co. Inc., as representative of
the Underwriters.
"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., Xxxxxx, Xxxxxxx & Co.
Incorporated and Prudential Securities Incorporated.
"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,
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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. The
Representative represents and warrants as of the Closing Date as follows:
(a) Compliance With Laws. The Underwriters 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. The Underwriters 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 third, sixth and seventh
paragraphs under the heading "Underwriting" in the Offering Document.
Section 4. Representations and Warranties of the Certificate Insurer.
The Certificate Insurer represents and warrants to the Underwriters 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 States of New York and California.
(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 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.
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(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, 1999 and December 31, 1998, and for each of the years in the
three-year period ended December 31, 1999, 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 31, 2000; Commission File Number 1-10777) and the
unaudited consolidated financial statements of the Certificate Insurer
and subsidiaries as of June 30, 2000 and for the periods ending June
30, 2000 and June 30, 1999 included in the Quarterly Report on Form
10-Q of Ambac Financial Group, Inc. for the period ended June 30, 2000
(which was filed with the Commission on August 11, 2000), 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, 2000, 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 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) Securities Act Registration. The Policy is exempt from
registration under the Securities Act.
Section 5. Indemnification.
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(a) The Underwriters hereby 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 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
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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 purchased by such
Underwriter to the public over the prices paid therefor by such
Underwriter over (ii) the aggregate amount of any damages which the
related Underwriter has 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 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.
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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: Risk Management,
Consumer Asset-Backed Securities
Telecopy No.: 000-000-0000
Confirmation: 212-668-0340
(b) To the Representative:
Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Asset-Backed Securities
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 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.
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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: /S/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: First Vice President
BEAR, XXXXXXX & CO. INC.
as Representative of the Underwriters
By: /S/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
