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Exhibit 10.1
AMBAC ASSURANCE CORPORATION,
BEAR, XXXXXXX & CO. INC.
and
XX XXXXX SECURITIES CORPORATION
INDEMNIFICATION AGREEMENT
ADVANTA MORTGAGE LOAN TRUST 1999-4
Dated as of November 5, 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 Indemnification Agreement. All capitalized
terms used in this Indemnification Agreement and not otherwise defined shall
have the meanings set forth in Article I of this Indemnification Agreement.)
Page
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Section 1. Defined Terms 1
Section 2. Other Definitional Provisions 1
Section 3. Representations, Warranties and Covenants of the Underwriters. 2
Section 4. Representations and Warranties of the Note 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 November 5, 1999 (the
"Indemnification Agreement"), by and among AMBAC ASSURANCE CORPORATION, as Note
Insurer, and BEAR, XXXXXXX & CO. INC. and XX XXXXX SECURITIES CORPORATION (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 Annex A to the Sale and Servicing
Agreement, the Insurance Agreement or the Policy. For purposes of this
Indemnification Agreement, the following terms shall have the following
meanings:
"Indenture" means the Indenture (as may be amended or supplemented from
time to time) dated as of November 1, 1999, by and among Advanta Mortgage Loan
Trust 1999-4, as Trust and Bankers Trust Company of California, N.A., as
Indenture Trustee.
"Insurance Agreement" means the Insurance and Indemnity Agreement (as
may be amended, modified or supplemented from time to time) dated as of November
17, 1999 by and among the Note Insurer, Advanta Conduit Receivables, Inc., as
Sponsor, Advanta Mortgage Corp. USA, as Master Servicer, Advanta Holding Trust
1999-4, the Trust, as Issuer and Bankers Trust Company of California, N.A., as
Trustee.
"Note Insurer" means Ambac Assurance Corporation, or any successor
thereto, as issuer of the Policy.
"Note Insurer Information" has the meaning given such term in Section
4.
"Notes" means any of the Notes substantially in the form set forth in
Exhibit A to the Indenture.
"Offering Document" means the Prospectus Supplement, dated November 5,
1999, in respect of the Notes, and any amendment or supplement thereto, and any
other offering document in respect of the Notes that makes reference to the
Policy.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of November 1, 1999, by and among the Trust, Advanta Holding Trust
1999-4, the Sponsor, the Master Servicer and the Indenture 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.
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"Underwriters" means Bear, Xxxxxxx & Co. Inc. and XX Xxxxx Securities
Corporation, severally.
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"Underwriters' Information" has the meaning given such term in Section
3.
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, Warranties and Covenants of the
Underwriters. Each Underwriter severally represents, warrants and covenants as
of the Closing Date as follows:
() Compliance With Laws. Such Underwriter will comply in all
material respects with all legal requirements in connection with offers
and sales of the Notes 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 Notes unless such Offering
Document includes such information relating to the Note Insurer as has
been furnished by the Note Insurer for inclusion therein and has been
approved by the Note 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 Note Insurer. The Note
Insurer represents and warrants to each Underwriter as follows:
() Organization and Licensing. The Note 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.
() Corporate Power. The Note Insurer has the corporate power
and authority to issue the Policy and execute this Indemnification
Agreement and to perform all of its obligations hereunder and
thereunder.
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() Authorization; Approvals. Proceedings legally required for
the issuance of the Policy and the execution, delivery and performance
of this Indemnification 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.
() Enforceability. The Policy, when issued, and this
Indemnification Agreement will each constitute a legal, valid and
binding obligation of the Note 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.
() Financial Information. The consolidated financial
statements of the Note 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 Note 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 Note 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 Note Insurer that would materially and
adversely affect its ability to perform its obligations under the
Policy.
() Note Insurer Information. The information in the Offering
Document as of the date hereof under the captions "The Note Insurer"
and "The Policy" (together, the "Note Insurer Information") is true and
correct in all material respects and does not contain any untrue
statement of a material fact.
() Rating. The Note 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 Note Insurer
by either of such Rating Agencies.
() No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Note 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.
() 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 Note Insurer and its
officers, directors, shareholders, employees, agents and each Person,
if any, who controls the Note 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, warranties and
covenants of the Underwriters contained in Section 3.
(b) The Note Insurer agrees to pay, and to protect, indemnify
and save harmless, each Underwriter and their respective officers,
directors, shareholders, employees, agents and each Person, if any, who
controls either of such Underwriter 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 Note Insurer
Information or a breach of any of the representations and warranties of
the Note 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 indemnification provided
in this Section 5(a) or (b) may be sought from either of the
Underwriters, on the one hand, or the Note 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;
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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
neither of the Underwriters shall be liable for any amount in excess of
(i) the excess of the sales prices of the Notes 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, warranties or covenants set
forth herein was 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.
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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 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 Note 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
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.
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Section 10. Counterparts. The 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
Indemnification Agreement, all as of the day and year first above mentioned.
AMBAC ASSURANCE CORPORATION,
as Note Insurer
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: First Vice President
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BEAR, XXXXXXX & CO. INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Managing Director
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XX XXXXX SECURITIES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Director
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