Exhibit 10.2
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Execution Copy
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AMBAC ASSURANCE CORPORATION,
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and
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XXXXXX BROTHERS INC.,
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CHASE SECURITIES INC.,
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DEUTSCHE BANC ALEX. XXXXX
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AND
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PNC CAPITAL MARKETS, INC.
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INDEMNIFICATION AGREEMENT
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$699,595,000 in aggregate principal amount of
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IKON RECEIVABLES, LLC LEASE-BACKED NOTES
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Dated as of October 7, 1999
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TABLE OF CONTENTS
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(This Table of Contents is for convenience of reference only and shall
not be deemed to be part of this Agreement. All capitalized terms used in this
Agreement and not otherwise defined shall have the meanings set forth in Article
I of this 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.... 1
Section 4. Representations and Warranties of the Insurer......... 2
Section 5. Indemnification....................................... 3
Section 6. Amendments, Etc....................................... 4
Section 7. Notices............................................... 4
Section 8. Severability.......................................... 5
Section 9. Governing Law......................................... 5
Section 10. Counterparts.......................................... 5
Section 11. Headings.............................................. 5
INDEMNIFICATION AGREEMENT, dated as of October 7, 1999, by and among Ambac
Assurance Corporation, as Insurer, and Xxxxxx Brothers Inc., Chase Securities
Inc., Deutsche Banc Alex. Xxxxx and PNC Capital Markets, Inc., as 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 Insurance and Indemnity Agreement, the
Certificate Guaranty Insurance Policy No. AB0306BE issued by the Insurer in
favor of the Trustee (the "Note Policy") or the Financial Guaranty Insurance
Policy No. SF0276BE issued by the Issuer in favor of Xxxxxx Brothers Financial
Products Inc. (the "Swap Policy" and together with the Note Policy, the
"Policies"). For purposes of this Indemnification Agreement, the following
terms shall have the following meanings:
"Indenture" means the Indenture dated as of October 1, 1999 among the
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Issuer, the Indenture Trustee and the Servicer.
"Insurance and Indemnity Agreement" means the Insurance and Indemnity
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Agreement (as may be amended, modified or supplemented from time to time), dated
as of October 7, 1999, by and among the Insurer, the Seller, the Issuer, IOS
Capital, and the Indenture Trustee.
"Insurer" means Ambac Assurance Corporation, a Wisconsin domiciled stock
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insurance company, or any successor thereto, as issuer of the Policy.
"Insurer Information" has the meaning given such term in Section 4.
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"Notes" means any notes authorized by, and authenticated and delivered
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under the Indenture.
"Underwriter Information" has the meaning given such term in Section 3.
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"Underwriters" means Xxxxxx Brothers Inc., Chase Securities Inc., Deutsche
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Banc Alex. Xxxxx and PNC Capital Markets, Inc.
Section 2. Other Definitional Provisions. The words "hereof," "herein"
and "hereunder" and words of similar import when used in this Indemnification
Agreement shall refer to this Indemnification Agreement as a whole and not to
any particular provision of this Indemnification Agreement, and Section,
subsection, Schedule and Exhibit references are to this Indemnification
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 of
the Underwriters, severally and not jointly, represents and warrants as of the
Closing Date as follows:
(a) 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 Notes unless such Offering Document includes such
information relating to the Insurer as has been furnished by the Insurer
for inclusion therein and has been approved by the Insurer.
(b) Underwriter Information. As to each Underwriter, all material
provided in writing to the Company for inclusion in the Offering Document
(as revised from time to time, and as included in such Offering Document or
any other Offering Document), such information being the second, third,
fifth and sixth paragraphs of the section headed "Underwriting" in the
Prospectus Supplement dated September 30, 1999 with respect to the Notes
(the "Underwriter Information"), insofar as such information relates to
such Underwriter, shall be true and correct in all material respects.
(c) Compliance with Laws. Each Underwriter will comply in all material
respects with all legal requirements in connection with its offers and
sales of the Securities and will make such offers and sales in the manner
provided in the Offering Document.
Section 4. Representations and Warranties of the Insurer. The Insurer
represents and warrants to the Underwriters as follows:
(a) Organization and Licensing. The Insurer is a duly organized and
validly existing Wisconsin stock insurance corporation.
(b) Corporate Power. The Insurer has the corporate power and authority
to issue the Policies and execute and deliver this Indemnification
Agreement and the Insurance Agreement and to perform all of its obligations
hereunder and thereunder.
(c) Authorization; Approvals. Proceedings legally required for the
issuance of the Policies and the execution, delivery and performance of
this Indemnification Agreement and the Insurance and Indemnity Agreement
have been taken and licenses, orders, consents or other authorizations or
approvals of any governmental boards or bodies legally required for the
enforceability of the Policies have been obtained or are not material to
the enforceability of the Policies.
(d) Enforceability. The Policies, when issued, and this Indemnification
Agreement and the Insurance and Indemnity Agreement will each constitute a
legal, valid and binding obligation of the Insurer, enforceable in
accordance with its terms, subject to bankruptcy, 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 balance sheet of the Insurer as of
December 31, 1998 and the related statements of income, stockholder's
equity and cash flows for the three fiscal years ended December 31, 1998,
and the accompanying footnotes, and the unaudited balance sheet of the
Insurer as of June 30, 1999, and the unaudited related statements of
income, stockholder's equity and cash flows for the six month period ending
June 30, 1999, fairly present in all material respects the financial
condition of the Insurer as of such dates and for the periods covered by
such statements in accordance with generally accepted accounting principles
consistently applied. Any future financial statements of the Insurer
incorporated by reference into the Offering Document relating to the Notes
will fairly present in all material respects the financial condition of the
Insurer as of their dated dates in accordance with generally accepted
accounting principles consistently applied. Since June 30, 1999, there has
been no change in such financial condition of the Insurer that would
materially and adversely affect its ability to perform its obligations
under the Policies.
(f) Insurer Information. The information relating to the Insurer
in the Prospectus Supplement dated September 30, 1999 as of the date hereof
under the caption "The Insurer and the Policy" and the financial statements
of the Insurer incorporated by reference into the Offering Document
(together the "Insurer Information") are true and correct in all material
respects and do not contain any untrue statement of a material fact.
Section 5. Indemnification.
(a) Each of the Underwriters agrees, severally and not jointly, to
pay, and to protect, indemnify and save harmless, the Insurer and its
officers, directors, shareholders, employees, agents and each Person, if
any, who controls the 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 contained in the
Underwriter Information with respect to such Underwriter or a breach of any
of the representations and warranties of such Underwriter contained in
Section 3.
(b) The Insurer agrees to pay, and to protect, indemnify and save
harmless, each of the Underwriters and its officers, directors,
shareholders, employees, agents and each Person, if any, who controls the
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 contained in the Insurer Information or a
breach of any of the representations and warranties of the 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 the Underwriters, on the one hand, or the
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 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 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. 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 Section (11)(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. No Underwriter shall be responsible
for any amount in excess of an amount equal to the excess of the sales
price to the public of the Notes purchased by such Underwriter over the
price paid therefor by such Underwriter.
Section 6. Amendments, Etc. This Indemnification 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 Insurer:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Department
Facsimile: (000) 000-0000
(b) To the Underwriters:
c/x Xxxxxx Brothers Inc.
3 World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
Facsimile: 000-000-0000
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
Indemnification 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 Indemnification Agreement shall be governed
by and construed in accordance with the laws of the State of New York (without
giving effect to the conflict of laws provisions thereof).
Section 10. Counterparts. This Indemnification 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 Indemnification Agreement are provided for convenience only.
They form no part of this Indemnification Agreement and shall not affect its
construction or interpretation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, all as of
the day and year first above mentioned.
Ambac Assurance Corporation,
as Insurer
By: /s/ Xxxxx X. Xxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
Xxxxxx Brothers Inc.
as an Underwriter
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Managing Director
Chase Securities Inc.,
as an Underwriter
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: Vice President
Deutsche Banc Alex. Xxxxx,
as an Underwriter
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Director
PNC Capital Markets, Inc.,
as an Underwriter
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Managing Director
